Category Archives: Economy

Hold on … Here Come Important Valuation and Corporate Earnings Charts –

As promised, it’s always good to step back occasionally and make darn sure we are not all being Lemurs (most known for following each other without thought) and gathering together, just before we go over the cliff….

Ok, so you are about to receive a blast of charts… we will code this post Forecast so we can go back and look at the “Forecasts” later….

Is the Market (S&P 500) Expensive?

This is the trailing PE (Price Earnings Ratio) the most macro valuation measure used from our Friends at Factset !

Green dotted line represents, 5 year average, and the dark dotted line represents the 10 year average….

Answer – Not cheap, but MAYBE not as frothy as it may feel at times (present party included) – certainly have been MUCH more expensive in the past…

Remember, tariff progress may release some pent up/held on the sidelines demand!

11-9-19 Trailing 5 and 10 year Avg PE Versus Current PE

What Areas are PROJECTED to Grow in 2020

This is what analysts are PROJECTING/Forecasting (hence our coding for future review) for the year 2020!

Recent Losers are expected to be next years winners- i.e. Energy and Materials….

What happens if Tariff Agreements are not reached? Not being negative here but we must consider this could be better or worse!

11-9-19 Earnings Growth for 2020 by Sector - Forecast

Earnings Versus Market Price Movement

You hear us say all the time, Earnings are the ultimate driver of prices… and they are….

No one says this is easy…. Earnings have been flat, but markets up….

Theoretically this should not happen … UNLESS market participants expect future earnings growth as markets are forward looking.

Q 4 2019 EPS Growth Change Versus market Growth

How about the Consumer?

Recall the consumer drives over two thirds of the economy through spending in our consumer consumption economy….

A Happy Consumer = Spending Consumer

One of the many Consumer Sentiment Indicators… University of Michigan…

Steady as she goes!

9-2019 U of Michigan Sentiment 10 years

Ok … you get the point, not too bad!

We could find something really hot and really cold, but these are the biggies from a high level!

Of course we did not forget the inverted yield curve and it’s recession predictiveness … we spoke about it here, here, here and here…. more to come…

Have a Great “Lemur Checkup” 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

Good News From Interest Rates – Friday

While the FOMC (Federal Open Market Committee) led by Jerome Powell have been lowering short term rates, see notes by us here, here and here….

Until just recently, longer term rates were following short term rates down…

Good News From Interest Rates

While the FOMC does control short term rates, they have much less control of longer term rates and actually by lowering short term rates they were hoping for this….

Higher long term rates are our friend … Possible reasons:

  • Market participants way of being more positive
  • Tariff talks proceeding
  • Less fear
  • Expectation of future growth
11-7-19 Ten Year Treasury Update

10 Year Treasury Rate

If we showed a longer term chart you would see it still has a ways to go as we are only nearing 2% – half full guys… have to start somewhere…  For now, good news!

Newsletter Under WayQ 4 2019 Newsletter Banner small

We have some really neat items under way for the Q 1 2020 (yikes- did we just say that) Newsletter… we have found some great Government Public sources of information that we think you will really like – now on to pulling it all together for brevity and clarity — never thought those research paper skills would be so used – Sorry to all the English teachers that did not get full effort..yes you told me so! haha

Today is a chilly Friday and Thanksgiving is just around the corner…

Have a Great Friday and 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

 

 

October 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our October 2019 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!

BREAK IN

D Magazines Best Wealth Managers

2019 Final Approved Dmagazine Best Wealth Manager

D Magazine Best Financial Planner – 13th Consecutive – Wow

Best_Financial_Planner 2019

Sirius Satellite Radio Co-Host

JK Sirius

 

Newbies –

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

October – 2019 Video

Financial Planning Tip (s) –

Why we want ANY seeming Important Document

In this post, due to recent fantastic $$ savings just by having access to very old documents… some almost two decades, we were reminded of how important it is for us to safely keep ANY seeming important document…. forever

Only thing is, if we do not have a soft copy… we cannot save it!

Capital Market Comments –

FED Lowers Once Again, another .25% – Likely Pause Expected

Jerome Powell Chief of the FOMC (Federal Open Market Committee) lowered rates by .25% to the 1.50% to 1.75% range, which will directly effect our overnight money, such as checking accounts and money markets… We think in part, to answer expectations… the good news is they have set future pause expectations… which we like!

Longer term rates have followed a bit, for now.

11-2-19 Fed Funds Rates

 

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

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

Three Views of the Consumer – Balance Sheet, Net Worth, Debt Service … Looking Good!

Over the weekend… doing what Financial Nerds do, after actually looking for an earnings update from Factset, but only being about 40% through the earnings season and after reviewing an almost 100 page slide deck from JPMorgan, the following consumer related charts jumped out, so we decided to share

Three Views of the Consumer

Recall that the consumer makes up over two thirds of the US GPD/Economy/Economic Growth via his/her spending… one can infer a happy consumer is a spending consumer…

These are averages across the country, so there are certainly different individual cases, but this is definitely worth a look…

Here is the Consumer latest Balance Sheet

Liabilities are most interesting to us, especially the non-mortgage liabilities…

10-25-19 Consumer Balance sheet

Consumer Debt Service is at a very low and serviceable level

The Great Recession of 07-09 has had at least the one good long term effect of keeping the consumer debt service low… not sure if fear or regulation, but still low compared to this multi-decade Chart…

Worth noting this chart variance in NOT very large… very interesting ..

10-25-19 Household Debt Service

Consumer Net Worth

Appreciation of most financial assets post Great Recession 07-09 has cleared new higher ground for the consumer, adding to confidence, happiness and freedom of spending…

Ignore the value the numbers are too big to comprehend, just take note of the higher high in the far right…

10-25-19 Household Net Worth_Page_01

These numbers being so interesting, likely have spawned a deeper dive in our next Newsletter with additional facts and national averages that may make for a great New Years Resolution Article…

Have a Great “Updated Consumer” 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

Q 3 Quarterly Review Cover Letter

A True Yogi Berra saying may be fitting now – It’s like déjà vu all over again!”

Tariffs and Trade War Talks Continue

While the tariff banter seems relentless and every day changing, leading to Capital Market bipolar movements, one day irrational exuberance, and the next day irrationally depressed, as mentioned in our Q4 Newsletter, tariff talk has been going on for decades. With today’s constant bombardment of immediate news stories and short clips it seems, present party included, to be constant and all encompassing. The reality is this likely will work itself out, just as seen in the graph in the newsletter. Our bet is once the tariff talk turns into tariff agreements, we will see market relief and higher overall interest rates. For now, there’s no doubt that the tariff talk is slowing the global economy and there is no envy for public company managers trying to navigate the possible changes that occur on a day by day basis, making it very tough to stock inventory and make purchases.

Treasury Rates- Interest rate cycle

Given the afore mentioned Tariff Talk, FOMC (Federal Open Market Committee) led by chief Jerome Powell and a company have embarked on a lowering of rates, twice to be exact, but only two .25 basis points each, in an attempt to help ease interest rate burdens and spur the economy. While not huge fans of the lowering of rates at this time due to gun powder needs at a future, when the inevitable recession occurs, at this time it appears we are on an interest rate decrease path, a complete 180° turn from just one year ago, when reserve officials were raising. If there is an agreement in Tariff talk, lowering of rates would likely stop, and we might even hear talks of raising, making for an interesting rate cycle. Time will tell.

Taxes or the savings of taxes paid

As we head into the final quarter of the year it’s time to make sure we’ve done all we can do for this years’ , especially items that have no look back features. As also mentioned in our Q4 newsletter, be sure to max those 401(k)s, contribute or distribute from 529‘s, complete Required Minimum Distributions (RMD’s) and make sure those charitable giving are complete this year, as all of these items have a hard stop year-end deadline.

Have a great day and start to fall!

Sincerely,

John A. Kvale CFA, CFP

Enclosure 2019 Report

September 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our September 2019 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 format as well as Video!

BREAK IN :

November 14th from 6:30 to 9 PM – Perot Museum – For the Evening

Newbies –

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

September – 2019 Video

Financial Planning Tip (s) –

RMD Season is here – Is your DOB between 7-1-48 to 6-30-49 ?

In this post, we reminded all of those with the unique option of deferring that first RMD an extra year on the perils of the double income from that deferral decision…..

Defer at your own risk and make sure you will not jump a tax bracket by doing so!

Mortgage Rate Update – Time to Refinance?

Mortgage rates (the drop there of – in rates) caught our attention and in this post, we reminded of eleven (just counted them – was surprised so many) items to think of when/if you should refinance – its a big decision and there are many variables,  if you didn’t catch the post and have been in your loan for a few years, be sure to take a look … another reminder will also make its way to you in the Q 4 2019 Newsletter –

30 Year US Avg Mortgage Rate

 

Capital Market Comments –

Inverted Yield Curve Update

In this post, early in the month we reviewed the definitely inverted yield curve…. and spoke to this being one of the slowest recoveries on record…. just after our post, the yield curve did normalize on positive trade talks…. Look for more details in the coming Q 4 2019 Newsletter-

9-3-19 three month less 10 year fred graph

FED Lowers Again, but only by .25%

Jerome Powell Chief of the FOMC (Federal Open Market Committee) lowered rates by .25% to the 1.75 to 2.00% range, which will directly effect our overnight money, such as checking accounts and money markets…

Their fear is the prior mentioned Tariff saber rattling causing an extended slowdown….

We prefer they save that gunpowder for a real fire, but just pouring a small bit of gasoline on the coals is ok for now!

FOMC Rate now

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

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

August 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale (With Blooper at end of Video)

Hello and Welcome to our August 2019 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 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!

August – 2019 Video

Financial Planning Tip (s) –

Three Most Important Social Security Posts SO FAR

As of this review we have one more unique age related Social Security Post to come, but the three most important posts so far are as follows:

Living Spousal Benefits

Deceased Spousal Benefits

Divorced Spousal Benefits 

Click each link for the actual post…. each post has a couple of minute discussion from Social Security Expert Tom Clark — THESE ARE IMPORTANT AND COMPLICATED-  so take your time!

Call Spam Protection Update

In this second follow up post due to demand, comments and questions we further discuss options for additional protection, depending on the major service provider….

Capital Market Comments –

Tariff Talk Jitters

Depending on the day and the headline, Capital Market Participants in true bipolar fashion seem to either cheer with reckless abandonment and buy buy buy or head for the exits and sell sell sell….

Just by chance it was nice to run across a wonderful historical chart, here in this post, showing this Tariff talk is far from the first time…. maybe for some of us, but in reality we have been dealing with this for decades….(Century)

us-trade-wars-history Cropped

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

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