After a long lethargic flat-lined Capital Market of 2017, things have finally changed, and we need to begin to get used to more normal Capital Markets.
What follows are details of what the Capital Markets have done over the last few days (yes only days) … what we should expect moving forward, along with a review of similar historical movement. Given a future that Rhymes with the past, the most important point we want to get across is this —
What we want everyone to understand is it is highly likely we do not just bounce right back and go to highs again quickly, so let’s have patience and set our expectations for an extended Capital Market search for the most appropriate level.
Ok, so you have the most likely scenario, here is why.
Current Capital Market Review
Suddenly the Capital Markets cared about something — and were WAY ahead of themselves, so they began going down!
We thought they might stop at our fancy trend line from our early post on this subject.
Nope …. participants pushed on past the trend line.
Participants decided the 200 Moving Day Average was where they should stop …
So we have a stopping spot, what happens next may be best seen by looking at the past for a possible rhyming future.
2016 Rhyme
The first drop was about 24 trading days followed by another 20-25 day test in a few months.
Start to finish about six months with a move all the way back to even before a second drop.
2012 Rhyme
With two hiccups during this 2012 time frame, again our weekly charts show a 2-4 months of capital market footing discovery ….
Let’s settle in for more normal, but what feels like “Rockier” times, which will likely be with us for a while.
- Economy is Good
- Global recovery is beginning
- Interest Rates are Rising but at a reasonable rate
- Consumers are feeling good
Patience will reward us!
Happy “Patience” Valentine’s day!
John A. Kvale CFA, CFP
Annuities etc. □Investment Accounts □Stock Options/Certificates Liabilities □List of Credit Cards with contact information □ Mortgages □Loans Taxes □Tax Returns □ W-2 Forms Identification □ Birth Certificates □ Drivers Licenses □Passports Family □ Adoption Papers □ Marriage License □Pictures □ Audio Files □ Video Clips Property □Titles to Homes, Autos, Boats, etc. □ Warranties Employment Benefits
Three Economic Charts that should make Us all Feel Good – 3.8% Unemployment Rate
Post great recession, the Unemployment rate went into double digits … +10% …. Many including us thought the new natural level of unemployment may be near 6% – prior to the great recession most believed 4% would be the all time low…
3.8% Unemployment Rate
The regular monthly Employment report from the Bureau of Labor Statistics reported last Friday, June 1 that the Unemployment rate hit 3.8% — Yes 3.8%!
Wow….
Naysayers would say this will put pressure on wages, pushing up the CPI – Consumer Price Index – indirectly forcing the FOMC (Federal Open Market Committee) to raise rates fast — possible inducing an inverted yield curve…. leading to a recession… got that… sorry for the long domino effect– but this is how Wall Street thinks… perception can become reality… Let’s check the CPI …
The CPI looks fine and has not moved up too much. Here is a possible reason why…
Jolts – Job Opening and Labor Turnover Survey
Essentially this is a relatively new statistic that many follow included the FOMC, that shows what the US Economy is producing in the form of jobs…. an increase in this chart means more jobs are available…
More Employment, but more Jobs… No Inflation —
Nice…
Have a Great “Lower Unemployment” Day!
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
www.street-cents.com
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Posted in Economy, Investing/Financial Planning, Market Comments, Political
Tagged Bureau Of Labor Statistics, Job Opening and Labor Turnover, JOLTS, Unemployment, Unemployment Rate, Unemployment Report