Our team wishes everyone in our VNFA family and Lehigh Valley community a very happy holiday week and prosperous New Year!
We had the pleasure of celebrating Christmas with the after-school homework club at Northeast Community Center last week, and we look forward to doing more in 2020 for these great kids in the Pembroke-Marvine community as part of our Volunteer Challenge project.
Visit our Facebook page for more photos, and stay tuned…
Message from the CEO
A year-end greeting from Matt Petrozelli and a message about Valley National Financial Advisors’ 35th anniversary in 2020.
WATCH NOW
by Connor Darrell
CFA, Assistant Vice President – Head of Investments
Global
equity markets recorded another solid weekly gain as momentum from the
announcement of a “phase one” trade deal between the U.S. and China continued
to bolster investor sentiment. The gains helped push some U.S. indices further
into record territory just in time for the holidays, a stark contrast from the
state of markets during last year’s festive season. Markets also appeared to
react positively to some healthy economic signals, which showed an increase in
personal income and spending, as well as some healthy housing data; all of
which bode well for the U.S. consumer continuing to support the economic
expansion. Bond yields climbed a bit higher in response to the evidence of a
solidifying economic backdrop, which led to small losses for bond investors.
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 despite recent softening in retail sales numbers. US consumer confidence remains high, and we anticipate a strong holiday shopping season. The consumer has been the bedrock of the US economy through much of the current expansion. |
|
FED POLICIES |
B+ |
With the Federal Reserve expected to refrain from any further adjustments to interest rates without a material change in the economic outlook, we have downgraded our Fed Policies grade to a B+. The low level of interest rates remains a positive for markets but sentiment will no longer be aided by anticipated rate cuts. |
|
BUSINESS PROFITABILITY |
B- |
As was largely expected by markets, corporate earnings growth was weak during Q3 as a result of the global slowdown and trade policy uncertainty. However, according to Factset, 75% of S&P 500 companies reported a positive earnings surprise, meaning things were not quite as weak as many had feared. |
|
EMPLOYMENT |
A |
November’s headline jobs growth number of 266,000 smashed consensus estimates and provided further evidence that the US economy remains on solid footing. |
|
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 |
6 |
Following progress made last week on two key geopolitical concerns (Brexit and US/China trade relations), we are reducing our International Risks metric to a 6. Other key areas of focus for markets include the 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.
“Never believe that a few caring people can’t change the world. For, indeed, that’s all who ever have.” – Margaret Mead
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 and next Laurie will not be live on the air, but Your Financial Choices recorded programming will air on Dec. 25 & Jan. 1.
Laurie will respond to questions submitted at yourfinancialchoices.com/contactlaurie during the next live show. Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.