Category Archives: Political

Your Guide to how much Tariff talk should Matter – World Exports in One Chart

Thanks to our friends at howmuch.net, an absolute timely chart on the total goods and services moving around the world.

We find this interesting given the rhetoric being bantered around in the headlines and giving capital markets an excuse to frown!

Take a moment to see rhetoric versus total exports/trade-

top-exporters-countries-2017-d071

Have a Great “Total Value Export Informed” 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

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….

 

6-3-18 Unemployment Rate Fred

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 …

6-3-18 CPI St Louis Fred

The CPI looks fine and has not moved up too much.  Here is a possible reason why…

Jolts – Job Opening and Labor Turnover Survey

5-8-18 JOLTS Fred

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

First Quarter 2018 Cover Letter Review

In true Groundhog like fashion, Capital Markets, after getting way ahead of themselves early in the quarter, saw their shadow only to turn, run and hide.

Included in the newsletter, which we sent early to give everyone a chance to view and remind of the tax strategies, is an article about the VIX and its reverse brother the XIV. These funny products along with the more recently noted tariff talk has been the recent excuse for capital markets to act like a bashful Groundhog.

The reality is capital markets got way ahead of themselves and needed time to rest. From our perch we would much rather them rest go sideways or even down a little bit, rather than getting WAY ahead of themselves like they did early in the quarter, only to quickly revert and likely overshoot to the downside.

Interest Rate Increase

In this most recent quarter we did just digest another small interest rate increase. Our new Federal Reserve Chairman Powell, looks to continue the gradual increase rates, slowly normalizing short term interest rates, and continuing on the path left by his predecessor Janet Yellen.

Capital Markets have a very unique way of signaling Interest rates have been raised too far called an inverted yield curve. Look for rhetoric about an inverted yield curve soon, as the historic importance and accuracy of this effect are in our crosshairs at this time.

Consumer and Earnings

With an economy that is two thirds driven by the consumer, a happy and spending consumer along with company earnings, which are beginning to digest the new tax reform, lead to a good backdrop.

As we mentioned in our Newsletters and repeatedly at street-cents, this is likely a year we will need patience, we see no change in that view at this time.

Have a great spring, talk to you in the summer!

Sincerely,

John A. Kvale CFA, CFP

Presidents Day Reminder … Olympics .. Sentimental Friday …

In honor of President’s day, next Monday the 19th is a government, Capital Market, bank and Post office Holiday … Our office will be closed as well…presidents-day-3079810__340

After a huge Mid-Week Capital Market Post, we are going to keep this one short and sweet.

Olympics

Hopefully you have been watching the Winter Olympics as much as we have. Congrats to all the men and women who have worked so hard to put themselves in such an honorable position.

Only a sporting event could unite two countries that have been at odds for so long.

Here is to wishing they remain friend for all of our well being after the event.

Sentimental Friday

Maybe it was the Valentines Day with the kids and seeing just how fast they grow. Maybe it is the winding down of Cathy as our office manager after 10 years. (She is retiring shortly.) Maybe it is the long weekend without tennis and good family time. Maybe it is the shadow of anther spring about to bloom.

No matter what, maybe its a good time to take a moment to give thanks for all the great things we have and get to experience.

Have a Great Weekend … Back to business next week!

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

 

Interesting comments from CEO of Mortgage Real Estate Investment Trust

Each year we are kindly invited to a terrific event of publicly traded companies by our friends at Three Part Advisors.

This year the event featured over 70 companies, mostly of smaller capitalization. We enjoy going to this event as a terrific way to really get into the weeds on what is going on in the Economy as well as learn more about the companies themselves.

Chance meeting and lunch Dynex CEO

One of the favorite sessions featured the CEO and Chairman Byron Boston. Luckily, after his discussion, we sat together at the same table for lunch … extending thoughts and comments from his public discussion.person-boston

As chairman of a publicly traded Mortgage REIT (Real Estate Investment Trust) Mr. Boston had/has (rates greatly affect his company) very strong opinions on rates among other things.   Of course our ears perked up when Mr. Boston gave his views and even some forecasts …

  • Rates will be lower longer this cycle
  • Highest rates of his lifetime (Wow- big statement) are in last 15 years
  • Global growth is coming, but more fragile than many think
  • Inflation will not get above 2%
  • Globalization has created an irreversible connectedness between our economy and the rest of the world (We could not agree more!)
  • If inflation goes over 2%, rates will go higher as well- I asked the question, but he did not think inflation would get over 2%

At lunch we had more candid hot topic conversations beyond my comfort zone of our blog.

We were VERY impressed with Mr. Boston. He gave his distinct thoughts with triggers for being wrong and right for that matter …. what is not to like!

We will code this forecast and check back again later to see how well Mr. Boston did !

Have a Great “More Rate Clarity” 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

Most and Least Trusted Media Sources

We did not make this, so please do not yell at us if you disagree…haha

We do find this very interesting.

This chart was part of a report from our friends at Visual Capitalist, who were actually reviewing a study completed by the Donald W Reynolds Journalism Institute at the University of Missouri.

According to 8,728 people in 28 different areas… Here are the results !

Media - trust-news

Have a Great “Trusting News” 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

No Increase YET, Shrinking Balance Sheet ? Huh …. Friday still from afar…

On their regularly scheduled meeting Wednesday (7-26-17), Janet Yellen chief of Federal Open Market Committee (FOMC) and committee announced unsurprisingly, no rate increase. The committee also announced they would be shrinking the balance sheet soon.

Shrinking the balance sheet? huh…

Alan Greenspan (Former, former FOMC chair Yellen-Ben Bernanke- Alan Greenspan) made it clear if you understood what he said, he did not do his job … that language continues today!

Here is a preview graph of the FOMC “Balance Sheet”…

Next week we will explain what shrinking the balance sheet means… in English..hah

Ahhh…but that is next week … today is a Friday and we are still working remotely from afar … (Technology is treating us well!)

Enjoy your Friday and your weekend!

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