Category Archives: Economy

May 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our May 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

May – 2020 Video (YouTube)

 

Financial Planning Tip  –

Mortgage Rates

Looking at the chart of the 10 year treasury, we can see rates have finally settled and we are hearing the volume of lenders overflow has calmed as well. While the 10 year is not an exact predictor of Mortgage Rates it is loosely correlated.

Now may be a good time to check your Mortgage Rate and consider refinancing!

Here is one of our favorite and most popular posts on the items to remember when you are getting a mortgage and especially when you refinance.

5-29-20 10 year us treasury

The Virtual Pivot

In true making Lemonade from Lemons fashion, not only have we been able to access the John Mauldin event, with over forty hours of speakers, but a National CFA(Chartered Financial Analyst) event and several others were completed virtually.

We have so much awesome information to share in the coming weeks…. oddly, that we would have not had access to if they had been held live!

Looking forward to sharing…. tons if info!!

Capital Market Comments – They Came Out!

The Look Through Continues

With current earnings being less than stellar, you may ask why the markets are clawing their way back?

It does appear investors are looking through the valley and attempting to price in what a recovery may look like.

The Tuesday after Memorial Day offered multiple openings across the country…. Wall Street wiped its brow as people came out!

Expect bumps, and headline shocks, both positive and negative … but that’s why we are happily conservative investors at heart!

5-29-20 YTD SP 500 Small Cap International

Have a Great Day – Talk to you at the end of June!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Making Lemonade from Lemons … Virtual Conference Notes …. A Conference Passed on for Over a Decade … Meet Ian Bremmer AGAIN

Choosing not to attend a conference held by John Mauldin for over a decade, due to travel constraints, cost, and bad timing of the conference, this year his big conference of the year went virtual and the price dropped by a two thirds.

Not only because the above, but with a total of 42 speakers and counting, slides and transcripts along with a downloadable MP3 of each speakers talk, Lemonade from lemons occurred, and we signed up.

With over 40 hours of information, we plan on dedicating much if not all of our coming Newsletter to reviews of the speakers … the goal of the conference is to look into the future for “Economic Risks, Challenges and Opportunities in a Post Covid 19 World

Meet Ian Bremmer AGAINIan_Bremmer_headshot

Back in 2016 at a national conference (live, in person) we first crossed paths with Bremmer  (a stand out thinker and Political Scientist)  and wrote about his comments on the then coming election here.

Fast forward to today, and here are a few bullets from his virtual talk we found interesting.

  • Taking 10% out of the Economy now may not feel as bad as times before since we are wealthier now.
  • Maybe this is the crisis needed to really make some big items change.
  • Unilateralism, not isolation. I.e. Canada, US, Mexico will become more connected unilaterally.
  • Will we have a new global order? Nah, just an acceleration of what was happening anyway.
  • Could this be Goldilocks Economy – Yes because this Crisis could bring GEO Political institution updates –
  • GEO Politics are cyclical, just like Economies.

Look for more details, as mentioned above in the coming Newsletter…. but you get the gist… some good stuff!

Have a Great “Bremmer Future Forecast” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Phase 1 Update … A Picture One Week Later in the Same Place … Friday

Two weeks ago today, locally we went to a semi-open Phase 1 opening

Office Buildings are open, but tenants, present party included, are strongly encouraged to visit as infrequent as possible and encourage minimal outside visitors.

We are certainly doing as suggested!

As another example, most private local Clubs (Golf, Tennis etc) in our area are not allowing guests … only members of the clubs and minimal, distanced, visiting activities.

Opening Weekend In Case You Missed It

Here is a picture I took early to mid-day on the weekend of Phase 1 opening, two weeks ago… in case you missed it…

img_6553

Last Saturday afternoon … you can tell from the shadow, on a bike ride, I took this picture, attempting to get in the exact same spot for reference. For the record I was almost run over three times trying to take the picture…

img_6573

Again, this is just seven days later of Phase 1, no other changes in Phase levels, or openings by our local or state authorities….

People are beginning to come out, but still minding all the rules.

Today is the Three Week anniversary of Phase 1 release…and a Friday…

Be safe, Be well … and Have a Good Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

 

 

Updated Capital Market Thoughts, Earnings, Fear Gauge, Interest Rates

We have been very careful in communicating thoughts on the Capital Markets as there are so many unknowns, it’s impossible being extremely accurate.

At the end of the prior quarter when the markets were more like a Bucking Bronco than future economic estimators, we put out our initial thoughts as follows… which so far have been pretty spot on…

Capital Market Participants will anticipate this and begin pricing in the not only conclusion of this economic slow down but the positive affects of the very large stimulus package that has been put into place.

The above being said, we think it appropriate to update you on our thoughts on where we are, and where we may be going …

So here we go …

Earnings

In normal times earnings determine the movement of the markets. Being in slightly different times, earnings are, and will be bad for the current and likely next quarter. The good news, this is not surprising to anyone.

Market participants are more interested on what it will look like on the other side, as things begin to get closer to a more normal environment.

There will be bumps, there always are, but being forward looking, participants will most likely look even farther ahead than normal and ignore the immediate results.

Major Equity Indexes Worldwide

World Equity Markets… after dropping (most likely overshooting to the downside) rather quickly, moved back up as anticipation of future growth began being priced in …

5-11-20 YTD SP R2k EFA

VIX – Volatility Index – aka Fear Gauge

A few years ago, on December 20, 2017, we commented on the record breaking lows the VIX had made …

Over the last 26 years the VIX has registered a end of the day reading of 10 or less 9 times.

At the close of market just a few days ago, as you can see, 9.42.

Care to guess how many days and counting the VIX closed below 10 in 2017 SO FAR?

49 … FORTY NINE … and counting!

Fast forward to today….  in the high 20’s and low 30’s as of late… down from above 80, which was record breaking in it’s own right….

A Continued lower VIX should be good for Capital Markets.

5-11-20 VIX

Interest Rates

The FOMC, Federal Reserve Open Market Committee, correctly dropped rates to zero as extra stimulus for the situation. Eventually rates got to a lower boundary, see chart below, take notice of the increase in rates before finally settling at a lower range. This represents a dash for cash when original fears commenced. We would be surprised to see rates stay here for a decade, as they were after the great recession of 07-09.

5-12-20 Treasury 10 Year Yield

So where are we going?

Last week we mentioned here in our Edison post, we think a cure will eventually be found, and we still do.

The day those four words are hopefully spoken …

We Found a Cure!

Our lives will change back to more normal, economic growth will pick up and a giant sigh of relief will come across all of our brows as well as a cheerful day/week in capital markets and many otherwise distressed assets.

If a relapse or fear of one occurs, there will be heightened volatility and slower Economic recovery ….

Our bet is on the former rather then the latter, but as mentioned at the beginning, no one really knows.

What Do We Do?

Stick to our allocations, trust the system, and have patience.

Will there be times and items we do not like? Sure, there always are, but we will get through them together!

Oh… and remember, Stay Informed not Consumed! (Over Drama catches the most eyes!)

Have a Great “Updated Market” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

 

 

Neat Animated Chart of Immigration, Which Will Eventually Resume

With much talk of immigration to and from different countries, this chart seemed very interesting.

Of course, this will only continue after travel opens once again, but still interesting from our perch!

USA seems to lead as desired destination, with Russia a very strong second until just recently!

From our Friends at Animated Stats

Have a Great “Visualized Immigration History” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

 

Positive Friday … Want to be an Edison? Wave Request

With the worlds biggest and brightest minds working countless hours toward a cure for the Corona …. it may be bad to bet against a cure!

Individuals, Joint Company efforts of their top brass working in teams, and top power house individual companies are working hard….

Want to Be An Edison440px-Thomas_Edison2

Thomas Edison was the most far reaching, well known, and well respected person we could think of, but of course, you can insert someone or company of your own liking.

The Company, Group, or Individual that discovers the cure is likely to become a household name….i.e. Edison

The key person is likely not doing it for the money …(His or her company make like the money!)

He/she is likely not doing it for the fame either …

Most we run into in this type of field are there because their calling is to help as many people as possible …

Can you imagine the sense of urgency someone like this has … to be able to announce the next four words …

We Found a Cure!

More next week on what may happen when those are transmitted across our cell screens….

To think we aren’t getting closer daily, would be to bet against some pretty sharp minds and technology…

Not saying it’s tomorrow… just saying it’s likely out there somewhere!

Now that’s a POSITIVE FRIDAY heading into your weekend!

Oh… do us all a favor  … kindly wave at every stranger you see, it will make you feel better and the stranger too …. Take note of how EVERYONE will kindly waive back with a bit of happiness … What we have noticed!

Have a Great “Want to be an Edison” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

From the Road … FOMC Takes Action Last Night in Response to Shutdowns and Economic Slowdowns

Not wanting to bring a knife to a possible gun fight, the FOMC (Federal Open Market Committee) led by Jerome Powell announced multiple actions in response to Corona and the related shutdowns last night.

FOMC Lowers Rates, Lowers Bank Reserves and Adds Money

On Friday a coalition of private and public groups agreed to begin more testing for the Corona Virus… not surprisingly if you are able to test more, there have been more findings.

Last night the FOMC led by Jerome Powell announced multiple measures to help economic activity:

  • Lowering of Short Term Rates
  • Lowering of Bank Requirements AND encouraging Banks to lend to businesses, especially small businesses with the extra freed up reserves
  • Purchasing of Treasury and Mortgage Securities for Liquidity and lowering of rates

Friday, I mentioned multiple ways to think of the current events… given the above events, here is another example…

  1. The FOMC did all of this, it must really be bad…
  2. Not wanting to get behind, the FOMC is taking advanced actions to help stay in front of disruption and possible slowness…

Choice one is easy and likely will show up somewhere in your sights, if it has not already …. again, choice two is the positive, high road choice, and will only likely be seen here today!

Yes, events are making the Spring Break Trip hard to focus on family and friends, but in a strange way, maybe it is good to be out of the office!

Careful what you intake… drama rises to the top!

Rest assured, as you can tell, we have complete remote access…and again, we are a conservative firm by nature!

Have a Great “FOMC No Knife to Gunfight” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents