Published Friday, December 13, 2019 at: 7:00 AM EST
A strong November retail sales report, soaring business-owner confidence, and good news on the trade war with China this past week propelled the Standard & Poor's 500 to a record-breaking closing high.
The U.S. trade war with China, at worst, threatens to shave two-tenths of 1% of U.S. gross domestic product, according to research by J.P. Morgan. The damage caused by the trade war is not as costly to the economy as you would be led to believe from the headlines it has generated for months. However, the prospect of the world's two largest economic powers slugging it out for years is a gut punch to investor sentiment. That was just one piece of the good news this past week.
Small business owner optimism posted the largest month-over-month gain since May 2018, rising 2.3 points to 104.7 in November. Owners saying it is a good time to expand increased by 6 points, and those expecting better business conditions increased by 3 points, according to the National Federation of Independent Businesses. The NFIB's Uncertainty Index fell 6 points in November, its lowest reading since May 2018.
Small business accounts for half the economy and about 70% of new jobs created, making the NFIB index an influential indicator. If small business owners are optimistic, they're hiring and that drives personal income higher, which drives consumer spending, which accounts for 70% of economic growth. That's good news.
That makes this spike occurring in real retail sales encouraging. In the 12 months through the end of October, retail sales — after adjusting for inflation — were up 2.6%. Relative to the last expansion, real retail sales have been setting records since 2014 and the growth rate in the past six months has accelerated. That's good news.
With this past week's good news, the Standard & Poor's 500 index closed at a record-breaking 3,168.80 on Friday.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.
The articles written in this newsletter were written by a journalist hired by Advisor Products, Inc. and provided to you by The Clark Group Asset Management. Their accuracy and completeness are not guaranteed. The Clark Group Asset Management is not a legal or tax advisor.
GET IN TOUCH
24941 Dana Point Harbor Drive
Dana Point, CA 92629
© 2023 The Clark Group Asset Management.
Why The New Bull Market Theory Was In The News This Past Week
With the Standard & Poor’s 500 stock index more than 20% higher than its bear market low on October 12, 2022, The Wall Street Journal, The New York Times, Reuters
The Clark Group’s mission is to build long-lasting relationships with our clients and help them organize, grow and protect their hard-earned assets through life’s transitions. Along the way, our goal is to provide peace of mind for our clients through trust, thoroughness and transparency. Our experience has taught us that our value comes from helping clients make sound financial decisions while minimizing the emotion that often comes with investing. We are here to guide you through both good and bad economic times.
As a fiduciary financial advisor, we have a legal obligation to always act in your best interest and disclose any conflicts that could prevent us from servicing you. Furthermore, our compensation is fee-based which allows us to be completely objective and aligns our incentives with our client’s best interests. We provide clients in the Los Angeles, Orange County, and Southern California area with investment management, retirement planning, portfolio risk assessment, and charitable giving strategies.