American Airlines is the largest airline in the world, serving nearly 200 million passengers a year. Soon, as those passengers settle into their seats and pick up their in-flight magazines, they’ll be reading all about the Lehigh Valley.
The region will be the subject of a 24-page supplement in next month’s issue of American Way, the most-read in-flight magazine in the world, highlighting the Lehigh Valley for millions of readers on an international platform bestowed on only a select few regions each year.
“The Lehigh Valley is in the midst of an economic renaissance,” said Carsten Morgan, Vice President of Special Projects for the London-based Ink Global, which publishes the magazine.
“The commercial landscape of today’s and tomorrow’s economy is vastly different than the stigmas and misnomers associated with the community,” Morgan said. “This is a story that hasn’t been presented to a global audience on this scale.”
The supplement feature, called Spotlight Lehigh Valley, is an economic development series that takes a detailed look at what makes a certain region a great place to invest, visit, or relocate, with a particular focus on global economic impact, business diversity, and innovation.
The U.S. stock market has jumped since the November 8th election. We identified 4 initiatives on which the U.S. stock market is speculating to be successfully accomplished early in the Trump administration. What will happen next? It’s still to be determined!
The 4 initiatives will have a tremendous influence on the “Heat Map” which forms the basis of our forward looking view of the U.S. economy. I consider the success or failure of the 4 initiatives to be “leading” indicators for the Heat Map.
Below are the 4 Trump administration initiatives upon which the stock market is speculating and what progress, if any, has been made:
Tax cuts and tax reforms benefiting most individuals and businesses. NO PROGRESS RECENTLY. CUMULATIVE PROGRESS TOWARD GOAL: 0%
Infrastructure spending of up to $1 Trillion over the upcoming 7 to 10 years. NO PROGRESS RECENTLY. CUMULATIVE PROGRESS TOWARD GOAL: 0%
Affordable Care Act amendment, reform or reorganization. ON ITS SECOND ATTEMPT,THE HOUSE OF REPRESENTATIVES PASSED LEGISLATION TO REVISE IT. CUMULATIVE PROGRESS TOWARD THIS GOAL IS 20%.
Roll back of government regulations and Executive Orders considered to be difficult for businesses. ROLL BACKS HAVE CONTINUED. CUMULATIVE PROGRESS TOWARD GOAL: 40%
As the action happens in Washington on these 4 initiatives, don’t be surprised if the political “tug and pull” contest results in a wilder than normal stock and bond market.
We will continue to report in future issues on the progress on each initiative.
Most of the time, the U.S. stock market looks to 3 factors (call them the “pillars” which support the stock market) to support its upward trend – let’s grade each of the pillars.
CONSUMER SPENDING: This grade is downgraded to a B+ (favorable).
THE FED AND ITS POLICIES: This factor is rated C- (Below average).
BUSINESS PROFITABILITY:This factor’s grade is upgraded to A- (very favorable). We have just completed one of the best earnings reporting seasons in decades.
OTHER CONCERNS: The “Heat Map” is indicating the U.S. stock market is in OK shape ASSUMING no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 5, an increase from 3 due to North Korea’s missile launch. These risks deserve our ongoing attention.
Last week, U.S. Stocks, Foreign Stocks and Bonds all increased. During the last 12 months, STOCKS outperformed BONDS.
Returns through 6-2-2017
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
.5
2.6
1.7
2.7
2.2
4.5
US Stocks-Standard & Poor’s 500
1.0
9.9
18.3
10.5
16.3
7.0
Foreign Stocks- MS EAFE Developed Countries
1.7
15.6
19.1
2.0
10.9
1.1
Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends.
The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®, AEP®. This week Laurie will discuss: “Affording college-ways to pay.”
Laurie will take your calls on this topic and other inquiries this week. Questions may be submitted early through www.yourfinancialchoices.com by clicking Contact Laurie. This show will be broadcast at the regular time. WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton and Phillipsburg area– or listen to it online from anywhere on the internet. For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com and visit www.wdiy.org.
The bull case for stocks took its biggest hit of the year last week, but nothing seems able to prevent this market from reaching new highs.
The Dow Jones Industrial Average advanced 12.01 points, or 0.6%, to close at 21,206.29, while the Standard & Poor’s 500 rose to 2439.07. The Nasdaq Composite gained 1.5% to 6305.80. All three indexes closed the week at record highs.
This comes despite economic data that cast shade on what has kept many an investor bullish on stocks this year. Despite the death of the so-called Trump trade—the idea that stocks would get a boost from tax cuts, fiscal spending, and deregulation—optimistic investors could always point to a potential pickup in economic growth, even without policy action. Friday’s payrolls report, which showed that a mere 138,000 U.S. jobs had been created in May, wasn’t exactly fatal for that view, but it certainly presents a quandary.
“This is more worrisome than the twist and turns of politics,” says Morgan Stanley Investment Management portfolio manager Andrew Slimmon.
Still, the Federal Reserve Bank of Atlanta’s closely watched GDPNow forecast model is predicting second-quarter economic growth of 3.4%—none too shabby, unless compared to the 4% growth it was predicting the day before the payrolls data were released. Slimmon says he’ll be watching closely to see if that number rises or falls as new data are released in the coming weeks. “We need data that validate 3% GDP growth, or the market will go nowhere,” says Slimmon, who remains optimistic about future gains.
What alternative do investors have? The 10-year Treasury note yields just 2.16%. With payouts that meager, stocks still possess their charms, especially when the U.S. economy continues to grow modestly and the rest of the world looks stronger, says Manning & Napier senior analyst Greg Woodard. “Equities seem to be a reasonable investment,” he says. “The path of least resistance” is for stocks to go higher.
That may be less worrisome than it sounds. Doug Ramsey, chief investment officer at the Leuthold Group, notes that the market’s rally is quite broad, despite concerns that too many of the recent gains have come from giants like Apple (ticker: AAPL) and Amazon.com (AMZN). He notes that it’s not just the Dow industrials, the S&P 500, and the Nasdaq Composite that are hitting new all-time highs, but that the Dow Jones Composite Average and the Dow Jones Utilities Average are as well, while the Dow Jones Transportation Average and the small-company Russell 2000 are within a stone’s throw of theirs.
Even the advance/decline line, a measure of advancing stocks versus declining ones, is sitting at a record high, something that has historically meant that a bull market has at least another three to six months to go. Ramsey says he wouldn’t be surprised if the S&P 500 hit 2,600 before the end of the summer, even if he can’t offer a reason why.
“I tend to like rallies that are somewhat mysterious,” he says. “It means that the market is [anticipating] good news that we’ll read about weeks or months down the road.”
It’s just a question of what that good news will be.
