Behind the Numbers With Brad McMillan, Chief Investment Officer, Commonwealth Financial Network
First, let’s be clear that significant risks remain. We have a potentially bigger government showdown on the
horizon over the debt ceiling, we do not have a trade deal yet, and growth is still slowing both here and in
China. We are not out of the woods, and markets could easily take fright again.
From an economic standpoint, things are certainly not quite as strong as they were last year at this time.
But they are significantly better than what investors were thinking last month.
You can see that improvement in the markets as well. With the significant gains in January, most stock
markets have moved back above significant trend line support and are closing in on bull market levels.
Although they are not quite back in rally mode, they seem to be getting there.
Chances are that this trend will continue. It is even possible the gains could extend through the rest of the year. A traditional stock
market maxim is that "as goes January, so goes the rest of the year."
— Brad McMillan "A Look Back at the Markets in January and Ahead to February 2019"
ECONOMIC AND FINANCIAL MARKET FORECAST
Below is a comparison of current economic and financial data with the panel’s
composite forecast for the next six months. (Through September 2019)
Current Level1 Strategists’ Predictions
STOCK MARKET 25,239 25,469
(Dow Jones Industrials)
BOND MARKET 2.7% 2.9%
(10-Year Treasury Note)
ECONOMIC GROWTH 3.4% 2.7%
(Annual Growth of Real GDP)
INFLATION 1.9% 2.0%
(Annual Increase in CPI)
SHORT-TERM RATES 2.4% 2.5%
(Three-Month Treasury Bills)
( 1) As of 2/4/19
FOR A BALANCED PORTFOLIO
The statistics below are a composite of results from our monthly poll of leading
portfolio strategists and are designed for a balanced growth investor.
STOCKS BONDS CASH
50.8% 35.4% 13.8%
12-MONTH TRENDS IN
LOW HIGH CURRENT
STOCKS 50.8% 59.0% 50.8%
BONDS 26.8% 35.4% 35.4%
CASH 12.5% 18.3% 13.8%
RANGE OF CURRENT
STOCKS 10% 70%
BONDS 20% 50%
CASH 1% 40%
CHANGE FROM PRIOR
STOCKS BONDS CASH
- 1.4% + 1.4% 0%
Portfolio strategists polled 2/5/19 - 2/8/19
A. Gary Shilling & Co.
S TOCKS 55% down 5%
BONDS 30% up 5%
Dudack Research Group
CASH HOLDINGS BELOW PANEL AVERAGE
Commonwealth Financial Network