Weekly Market Commentary November 4, 2019

Fast Facts

Trashcan Treasure- A 13th-century painting that hung unloved for decades in a Frenchwoman’s kitchen was sold at auction last week for $26.8 million—the most ever paid for a medieval painting. The woman, in her 90s, never thought much of the tempera panel, which she’d believed to be a Russian icon. It might have ended up in the trash during a house move this summer, but an auctioneer who had come to value furniture suspected it was a masterwork. Experts later identified it as Christ Mocked by Italian artist Cimabue, a forefather of the Italian Renaissance. “When I held the picture in my hands,” said buyer Fabrizio Moretti, “I almost cried.”

Hero Holding Two Beers– A Nationals fan was hailed as a World Series hero this week after he nabbed a home run ball while holding a beer in each hand. Jeff Adams had just bought two cans from a vendor in the second inning of Game 5 when the Astros’ Yordan Alvarez smashed the ball in his direction. Recalling his Little League days, Adams put his chest out, angled it down, and let the ball roll to the floor—all without spilling a drop of beer. Adams said he wished his old coach could have seen his feat: “This guy taught me how to do that.”

Sensational Stallion- A horse in South Korea has become a YouTube sensation by perfecting the art of playing dead whenever someone approaches to ride him. Jingang—dubbed “the world’s most melodramatic horse”—buckles his legs, theatrically collapses, and closes his eyes at the mere sight of a prospective rider. “That horse is a genius,” said one fan. “Wish I could just do that every time someone I don’t like comes near me.” Watch him in action here: https://www.youtube.com/watch?v=L3dC3Z8pf5U

 

Weekly Focus – Think About It

“Before you become too entranced with gorgeous gadgets and mesmerizing video displays, let me remind you that information is not knowledge, knowledge is not wisdom, and wisdom is not foresight. Each grows out of the other, and we need them all.”
–Arthur C. Clarke, Science fiction writer and futurist

 

The Markets

They did it.

The Federal Reserve lowered interest rates last week, as expected. There were no enthusiastic fans singing the Baby Shark song, but the Federal Open Market Committee’s decision was well received.

Reuters reported, “Gaps between market expectations and the Fed’s own outlook have been wide at times this year, a source of concern for policymakers who don’t want to kowtow to markets, but also don’t want to surprise or disrupt them. But, the two are now roughly in line with the idea that the Fed is on hold and the economy continuing to chug along, a fact highlighted by data showing 128,000 jobs were created in October…”

Last week’s unemployment report was full of good news. It reported job gains and moderate pay increases, according to Barron’s, but there was a counterintuitive twist. The unemployment rate increased even though the economy added new jobs. That was good news, too, because it meant more people are returning to the workforce.

The only bad news was found in manufacturing. The October ISM manufacturing index ticked higher, but remains in contraction territory. CNBC reported, “Manufacturing has been at the heart of the economy’s sluggishness, with a drop in business investment a big reason for the third quarter’s sluggish 1.9 percent [economic] growth pace.”

Barron’s attributed softness in manufacturing to the ongoing U.S.-China trade war.

By the end of the day on Friday, the Standard & Poor’s 500 Index had closed at a record high three times in five days. The Nasdaq Composite also reached a record high.

What will we do with Parking garages? As the popularity of ride-sharing services and personal transportation options (like scooters and bicycles) grows, the need for cars in urban areas may diminish.

The arrival of autonomous vehicles could reduce demand even further.

Pew Research explained, “By 2030, 15 percent of new cars sold will be totally autonomous, according to one estimate. One in 10 will be shared. And, as it becomes easier for people to summon shared or autonomous cars when they need them, fewer people will want to own their own vehicle, meaning fewer cars overall.”

So, what’s going to happen to all of the parking garages?

There are a lot of interesting ideas about how parking garages might be repurposed. Some companies plan to reserve the spaces for autonomous vehicles. Others are remodeling garages to accommodate businesses and services.

For example, one company is buying properties with the intention of turning them into “commercial kitchens for delivery-only restaurants and other consumer services.” Other possibilities include:

  • Recreational areas
  • Gyms
  • Movie theaters
  • E-commerce distribution centers
  • Flood protection areas
  • Urban farms
  • Apartment buildings

The co-CEO of an architecture and design firm told Axios News, “An obvious and functional challenge we face is that these structures were not originally designed for human habitation. These spaces often require us to raise the floor height, level the floors between ramps and incorporate design techniques that bring natural light into the space.”

Redeveloping parking garages may be challenging and costly, but it could create opportunities for investors.

Best regards,

John Klevens, CFP

 

 
This material is intended to provide general financial education and is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties.  Individuals are encouraged to seek advice from their own tax or legal counsel.  Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.  This material is for informational purposes only and is not an offer to sell or a solicitation to buy any securities.
 
Securities and Advisory Services offered by John Klevens through KMS Financial Services, Inc. Member FINRA/SIPC and an SEC Registered Investment Adviser. Klevens Capital Management and KMS are separate and unaffiliated.
 
Portions of this newsletter have been prepared by Peak Advisor
 
* These views are those of Carson Coaching, and not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
 

Sources:
The Week Magazine
https://www.reuters.com/article/us-usa-fed/after-year-long-bumpy-ride-fed-appears-to-make-soft-landing-idUSKBN1XB4DD
https://www.barrons.com/articles/what-the-perfect-jobs-report-means-51572627916 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/11-04-19_Barrons-This_Perfect_Jobs_Report_Looks_Like_a_Game-Changer-Footnote_2.pdf)
https://www.cnbc.com/2019/10/31/jobs-numbers-out-friday-but-another-report-could-be-more-important.html
https://www.reuters.com/article/us-usa-stocks/sp-500-nasdaq-set-records-on-jobs-data-trade-headway-idUSKBN1XB3ZD
https://www.axios.com/the-future-of-parking-near-and-far-2c91eec1-32ef-4347-bd6a-fe1c91aad657.html
https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2017/12/12/why-downtown-parking-garages-may-be-headed-for-extinction
https://www.axios.com/newsletters/axios-cities-3c36bdfc-2b64-4926-85c9-a58a4369058f.html
https://www.goodreads.com/quotes/tag/technology