Vorisek Financial | Weekly Market Update: January 23, 2019

Good morning!

If the widely expected 2019 global slowdown is impeding the US stock market, that message has yet to reach Wall Street.  The S&P 500, representing 81% of the US stock market, has climbed +6.6% YTD (total return).  Market enthusiasts will point to the index’s +13.6% climb since its Christmas Eve meltdown, while market pessimists recognize the S&P 500 is down 8.9% from its all-time closing high (2931 on 9/20/18).  Investors this week will be weighing the impact of China’s announcement on Monday (1/21/19) of +6.4% growth of its economy in the 4th quarter (its worst result since early 2009), news that could rattle the nerves of stock investors (source: BTN Research).        

China’s “below expectation” report of its 4th quarter growth rate may ripple across to the energy industry.  The trifecta of sluggish global demand for crude oil, rising US oil production in the Permian Basin and increasing inventories of gasoline would suggest falling oil and gas prices is inevitable in 2019.  Oil experts however expected rising oil prices in 2018 due to OPEC production cuts, but instead the price of crude oil fell by 24% last year (source: BTN Research).  

On Saturday (1/19/19) President Trump offered Democrats a compromise to end the country’s government shutdown – protection from deportation for children brought to the USA illegally in exchange for the funding of a border security wall.  The Senate takes up Trump’s idea with new legislation today (Tuesday 1/22/19) to end the 32-day shutdown, the longest in US history (source: White House).           

Notable Numbers for the Week:

  1. NOT EVEN FIVE PERCENT - The US population was 328 million as of 1/15/19, 4.4% of the world’s population (7.55 billion) as of that date, i.e., only 1 out of every 23 humans is an American (source: Census Bureau). 

  2. SOME MAKE A LOT - 5% of the 150.3 million tax returns filed for tax year 2016 reported adjusted gross income (AGI) of at least $200,000, received 35% of all AGI and paid 58% of all federal income tax (source: IRS).      

  3. YOU ARE ON YOUR OWN - 58% of 1,504 small businesses surveyed in August and September 2018 (defined as American companies with 2-99 employees) do not offer any retirement benefits, e.g., defined benefit pension plan, profit-sharing plan or a 401(k) defined contribution plan (source: LIMRA).  

  4. WHY DON’T THEY? - 137 million Americans voted in the November 2016 presidential election when Donald Trump became president.  Another 113 million “voting-age” Americans could have voted but did not (source: United States Elections Project). 

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Joshua Dandurand