Category Archives: Political

Fire Hydrant Volume of Company and CEO Meetings – Southwest Ideas Conference – 70 Publicly Traded Companies

Once a year, luckily we are invited to a local event that includes over 70 – yes it has grown to 70 publicly traded company visits and presentations…

Annual Southwest Ideas Conference

Through two close friends, one who organizes the event and the other who owns the company that organizes the event, we are invited, luckily, once again to the Southwest Ideas Conference here in Dallas –Southwest Ideas Investor Conference

This year’s event includes over 70 publicly traded companies of various size, location and industry –

We love this event as it gives us a chance to not only meet C – level executives of these companies up close and personal, but to also hear their outlooks, economic forecasts, insights, and general feelings of what is going on in their various industries….

We look forward to the rapid fire, multi-meeting all day event and look forward to bringing you any interesting updates that we may stumble upon…

Have a Great “Fire Hydrant C Level Visits” 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

Great Economic News – Why Some are Frowning?

On Friday, the Bureau Of Labor Statistics (BLS) released their regularly monthly employment report – this is the first report in some time where ….

“Good News is Bad News?” 

Here is why some believe this!

Good Economic News  = Bad News?

Last Friday, November 2, 2018 the BLS released their regular monthly employment report that showed terrific economic numbers.

A fantastic, total 3.7% unemployment rate.

11-2-18 BLS Emp Report

In addition to the above Unemployment level, average hourly earnings were also released and they were up 3.1% year over year — breathing a much needed pay increase to many ….

The bad news for many is that they believe these good numbers will give the Federal Open Market Committee (FOMC) ammunition for continued rate increases.

Currently FOMC members are on record saying they will raise rates in December and three more times next year (2019).

The worry is an eventual inverted yield curve – which we have mentioned many times is a very good precursor to a recession!

11-2-18 90 daty v 10 year fredgraph

By looking at this chart, we are far from an inverted yield curve at this time- leading us to believe this “Good News = Bad News” may be very unwarranted…

Now you know the rest of the story !

Have a Great “Good News is GOOD 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.
jkfinancialinc
street-cents

Tariff Update – AKA Trade Wars in the Old Days – Sure Enough we have been here before?

Over the past 30 years, much of what we learned are what opinions to trust, which views to listen to, and more importantly, who to tune out.

Scott Grannis, former chief economist for a large financial company and currently retired with no intention of returning to work (NO BIASES!) is one of our favorite reads. Here is a very small portion, but a favorite on the Tariff wars from Scott and his Blog “Calafia Beach Pundit” – he lives in CA currently.

“In the past 12 months, the US has imported about $525 billion of Chinese goods, while at the same time exporting to China only $135 billion. China is selling almost four times more “stuff” to us than we are selling to them. So, the thinking goes, if both countries jack up tariff rates to prohibitive levels, the Chinese have much more to lose than we do, particularly since our economy is still half again as big as China’s. At some point the Chinese will wave the white flag, we’ll all agree to reduce or eliminate tariffs and intellectual property right theft, and sweetness and light will return to international trade relations.

We can’t rule out a successful end to today’s tariff wars, but neither can we be confident that they will inexorably lead to a repeat of the Smoot-Hawley tariff wars which in turn led to the Great Recession. I continue to believe that tariffs are so universally understood to be bad and even stupid that eventually our leaders will do the right thing and make trade freer and fairer. Why bet against what would be a win-win for all parties? (Zero tariffs are an economist’s dream, since by facilitating free trade they would be a boon to all countries.)”

Trade Wars History – This is not our First Time

Follow his comments up with an excellent updated chart on the subject matter from our friends at Visual Capitalist, and we will let you formulate your own opinion – an opinion that is likely more updated than before reading this post!

Have a “Tariff Trade War Update” 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

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