January 1, 2020
It seems that the urgent and historic impeachment process of President Donald Trump has taken a pause and has not troubled the stock market one bit. In fact, the S&P 500 has risen almost 7% since September when formal impeachment inquiry was announced, and the NASDAQ hit 9,000 for the first time ever on December 26th.
To the contrary, the impeachment process seems to have motivated politicians from both parties with trade deals and budget approvals getting passed. When the urgency kicks back in, we will most likely have the same president since Republicans control the Senate. As far as markets are concerned, the steps to impeachment are having little effect.
With regulations reduced, the Federal Reserve taking a neutral stance on rates, unemployment rates are at a historic low and the US consumer spending at a strong and sustainable pace, 2020 may show new highs in the stock market indices. Another factor is that under the new Secure Act those individuals turning 70 ½ in 2020 will not be forced to take a taxable distribution from their IRAs, delaying that event until they turn 72.
The one caveat is that rebalancing portfolios in a new tax year may lead to some volatile days as people sell and take gains from a banner 2019 investment year. With that in mind, we encourage everyone to assess their cash needs for the next 6 to 12 months. As always, we prefer to raise cash in an up market rather than be forced to sell at a time when the market consolidates gains or experiences a correction.
The Dow, S&P 500 and the NASDAQ are positive year to date at 22.34, 28.88 and 35.23 percent, respectively, with the 10-year Treasury yielding 1.90 percent.
Happy New Year everyone!
*Disclaimer: This report is a publication of Marchand Faries Financial Management, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgement of the author as of the date of publication and are subject to change.