Market Analysis

Marin Group
Market Update

July 2019

We are at the midpoint of 2019 and the major averages are in a new high territory, in line with our forecast. The trading over the past month has shown enough strength to suggest the rally could go another 5%-10%. But nothing has surfaced to change our belief that it is the last rally in this bull market and a considerable decline should begin in the traditional September-October timeframe. Meanwhile, we are happy that we are participating in this run and may make a short-term trade, if the opportunity presents itself.

From a macroeconomic standpoint, we are in an unusual environment. Some of the key things we look at from this perspective are the 10-year yield on U. S. Treasury Bond, the price of gold and the long-term charts for the Dow Jones Industrials, Transportation Index and the S&P 500 Index. The Dollar index is also of interest, but currencies have so many factors influencing their price that it is very difficult to predict their future movement with any degree of certainty. We have mentioned interest rates in past commentaries and talked about the 10-year treasury breaking its 30-year downtrend in terms of yield. Since that break, the yield has since declined back below the line which is consistent with the process of changing direction for such a long trend. What makes this particularly interesting, is while this has happened, the price of gold has spiked up, usually indicating a fear of inflation. So, while the bond market is saying there could be more of a deflationary risk, the gold market is acting like inflation is a risk. It’s not possible, at this point, to predict what the outcome of this condition will be, but we believe it is a warning sign of the beginning of instability in the system which may be the cause of the decline we think is coming later in the year.

We are proud to be an independent provider of financial services and a fiduciary to you. This means we must always act in your best interest along with staying apprised of the changing regulatory environment governing our industry. Some of you have been with Marin since the beginning (1997) along with our ever-growing client base. Because the regulatory environment has changed in the last couple of years, our legal counsel suggests we update some of our forms. Please keep an eye out for correspondence from us as we may be sending you forms to comply with these new regulations. As always, we appreciate your trust in us and value the relationship we have developed in the time we have worked together.

Gary and Dianne

 

This report is provided as a general market overview and should not be considered investment or tax advice or predictive of any future market performance.

Any security mentioned in this report may not be suitable for all investors. No investment mentioned in this newsletter constitutes a recommendation to buy, sell or hold a particular investment. Such recommendations can only be made on an individual basis after an assessment of an individual investor’s risk tolerance and personal circumstances. Past performance of any investment mentioned is not a guarantee of future performance. Statements regarding the investment concerns and merits of any company and fair market value computations are strictly the opinion of Marin Group. Employees of Marin Group and Marin Group clients may have positions and effect transactions in the securities of the issuers mentioned herein.