Joanne Kurtz, Executive Administrative Assistant Years at VNFA: 14 years (in March 2020) “I enjoy
working with my colleagues because they make me feel supported, and they
continuously motivate me to do my best.”
About Joanne: I am married to my
wonderful husband and have two adult children. We like to take the time to
enjoy the outdoors by visiting the Poconos and the beach. We also have an 11-year-old
yellow Labrador retriever, and she is a joy to our whole family. I enjoy
reading, exercising, cooking and eating healthy.
What I
enjoy most about my job is helping clients and helping our team. There are a
variety of tasks that are involved which makes each day unique and enjoyable. Our
team benefits from making sure procedures are carried through for great
organization and communication which helps our clients meet their financial
goals.
We are pleased to announce the promotion of Jessica
Goedtel, CFP® to the position of Assistant Vice President /
Financial Advisor.
Jessica has been
part of our team since 2016 helping clients with comprehensive financial
planning, including tax, insurance and corporate benefits. She joined VNFA with
several years of experience in the financial services industry and has continued
developed her skills through our firm’s Entry Level Professional (ELP) program.
The ELP program is specifically designed to prepare the next generation of financial
advisors at VNFA with key skills and knowledge.
“Jessica
received her Certified Financial PlannerTM Professional designation
in 2018 and has completed all levels of our firm’s ELP development standards,”
says CEO Matthew Petrozelli. “She has been and will continue to be a valuable
part of our professional advisory team in this new capacity as a full-time
financial advisor.”
by Connor Darrell CFA, Assistant Vice President – Head of Investments Most of last week’s action took place on Friday, when the first signs of meaningful progress toward an eventual trade resolution between the U.S. and China broke into the news cycle. Markets rallied in reaction to the announcement from President Trump that he and Chinese officials arrived at an agreement for China to resume purchases of U.S. agricultural products and to begin addressing issues related to intellectual capital. Ultimately however, many were quick to point out that while the progress is a sign that the two sides are willing to work with one another, this first phase of an agreement is far from a finished product and does not address the most pressing issues that face negotiators; many of which are related to technology, cybersecurity, and intellectual property theft.
The positive sentiment from the trade front pushed a sense of optimism through financial markets and helped to steepen the yield curve, which led to negative returns in the bond market. With the economic calendar dormant this coming week, most of the market’s focus will remain on geopolitical concerns like trade and Brexit negotiations, as well as the beginning of Q3 corporate earnings season, which could provide investors with a better glimpse into how the recent slowdown in manufacturing has impacted corporate profits.
We provide our perspective on many of the above issues in our most recent quarterly commentary, which is available on our website – valleynationalgroup.com/Q32019
THE NUMBERS Sources: Index Returns: 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. Interest Rates: Federal Reserve, Freddie Mac
U.S. ECONOMIC HEAT MAP
The health of the U.S. economy is a key driver of long-term returns in the stock market. Below, we grade 5 key economic conditions that we believe are of particular importance to investors.
CONSUMER SPENDING
A
Our consumer spending grade remains an A. Surveys of US consumers continue to indicate that the consumer is in a strong position, and recent GDP data provided further evidence of healthy consumer spending.
FED POLICIES
A-
Our Fed Policies grade has been increased to A- after the Federal Reserve cut its interest rate target by 25 bps following its most recent meeting. This marks the second time the Fed has cut interest rates in the past few months, but Chairman Jerome Powell hinted that he does not expect “a more extensive series of rate cuts” moving forward.
BUSINESS PROFITABILITY
B-
Q3 corporate earnings season begins soon, with many experts predicting negative growth for the quarter as a result of more sluggish global economic growth. The strength of corporate profits in Q3 will provide investors with a glimpse into how the recent slowdown in manufacturing may have impacted US companies.
EMPLOYMENT
A
The US economy added 136,000 new jobs in September, below the consensus expectations of analysts. However, despite the lower than expected job creation, there was evidence of an acceleration of wage growth. The labor market continues to look quite healthy.
INFLATION
A
Inflation is often a sign of “tightening” in the economy, and can be a signal that growth is peaking. Recent inflationary data has increased slightly, but inflation remains benign at this time, which bodes well for the extension of the economic cycle.
OTHER CONCERNS
INTERNATIONAL RISKS
7
Following a re-escalation of the US/China trade dispute, we have raised our “international risks” metric back to a 7. Other key areas of focus for markets include the ongoing Brexit negotiations, rising economic nationalism around the globe, and escalating tensions in the Middle East.
The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.
Our team, led by
our CEO as Honorary Chair, is pleased to sponsor the 17th Annual Spirit
of Volunteerism Awards.
Join us to celebrate our community with the Volunteer Center of the Lehigh Valley on Tuesday, October 29 at DeSales University for cocktails, dinner, and a celebration of local volunteerism.
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 is WDIY’s annual Fall Membership Drive, which includes a partnership with
Valley National Financial Advisors. For every $100 raised during the Membership
Drive, VNFA will provide Second Harvest Food Bank of the Lehigh Valley with the
funds to deliver 21 meals to families and individuals in need in the Lehigh
Valley.
Laurie will be on the air between
breaks to address your general financial questions at 610-758-8810 or
in advance via yourfinancialchoices.com/contactlaurie.
IN CASE YOU MISSED IT! Listen to Laurie’s discussion last week with Dan Banks addressing Your Medicare Questions.
Message from the CEO Charles Schwab and Co. made history this week announcing that on October 7th, 2019 they will begin charging ZERO commissions on equity, ETF, and options trades. This means all our Schwab custodied investment clients’ cost of ownership for stock and ETFs portfolios will be lowered significantly. We expect all major custodians to follow suit in the weeks to come. At VNFA, we are constantly searching for ways to improve the client experience. We are proud that our business partners led the way and we look forward to many new innovations that we can pass on to you, our trusted clients.
Equities: It was a bit of a seesaw quarter for equity investors, as the deepening trade conflict with China, concerns over global economic growth, and heightened geopolitical uncertainty all combined to stoke volatility in markets. And as if these issues weren’t enough for investors to grapple with, it was announced in late September that Democrats in the House of Representatives will move forward with impeachment proceedings against President Donald Trump. Yet despite all of the negative headlines, equities still managed to push modestly higher during the quarter, with the YTD return on the S&P 500 rising above 20%. International markets were unable to match the returns in U.S. equities however, with most foreign stock markets sliding lower during the quarter.
Bonds: Bond markets continued to rally as interest rates moved lower throughout the third quarter. Longer-term interest rates tend to be closely aligned to investors’ collective expectations of future growth and inflation, and both have failed to materialize to the extent needed to sustain higher interest rates. From a growth perspective, the collective global economy has continued to show signs of weakening, and it is possible that some countries in Europe (such as Germany and Italy) may soon find themselves in recession. Inflationary pressures have ticked up recently as a result of the tight U.S. labor market and U.S. tariffs but could also be tamed if the U.S. and China are able to arrive at some kind of trade resolution, which remains our base-case scenario.
Furthermore, trillions of dollars’ worth of foreign bonds now trade with negative yields, a concept that is difficult for even many financial experts to truly come to terms with. Regardless of the reasons behind this phenomenon or even its long-term impacts on borrowers and lenders, it has undoubtedly created a powerful surge in demand for U.S. bonds, which remain one of the best options for yield-starved global investors. With few other places for bond investors to go, the prices on U.S. bonds have continued to be bid upward, pushing yields even lower.
Amazingly, it wasn’t very long ago that some bond market experts were questioning whether the Fed’s balance sheet runoff would lead to a surge in supply that might cause yields to spike meaningfully higher! In our view, the rapid transition from investors fearing rates might surge too quickly to those same investors struggling to find healthy yields at all is a testament to the unpredictability of markets and an argument for maintaining a balanced approach to portfolio management.
Outlook: The third quarter was filled with uncertainty, much of which will not be resolved for some time. But one thing that was made abundantly clear as the quarter progressed was that in the eyes of the Federal Reserve, sustaining the expansion remains of high importance. In his September press conference, Jerome Powell stopped short of stating that the two recent rate cuts were part of a broader easing cycle, but it is becoming increasingly obvious that the market expects the Fed to keep its foot on the gas with respect to monetary easing. We believe however, that investors should pay more attention to economic fundamentals than to the Federal Reserve, as eventually, the Fed’s influence will wane and all that will be left to drive markets will be traditional factors such as economic growth and earnings. The evidence is mounting that the fundamentals are starting to flash warning signs for investors, but as has been the case throughout much of the past two years, the wild card remains trade. If the U.S. and China can reach a trade agreement, there could be room for measurements like manufacturing activity to rebound and for the expansion to be sustained even longer. In any case, with the strong returns achieved by both stocks and bonds throughout the first three quarters of the year, it is likely an excellent time for investors to rebalance their portfolios back towards long-term targets.
VIDEO: Q3 2019 Market Commentary Connor Darrell CFA, Head of Investments, shares Valley National Financial Advisors’ summary of the third quarter and its impact on investors and portfolio recommendations. WATCH NOW
