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Red Sea Guardian Market Monitor

Client Account Management Service

Text Box: The following is an excerpt from the General Economy & Market Outlook section of the December, 2019 issue of the Red Sea Guardian Market Monitor: General Economy & Market Outlook “Over next 2 or 3 quarters: Earnings for Corporate America has been surging. For the S&P 500, yearly earnings growth is +6% for FY2016, +17% for FY2017, and +22% for FY2018 … but is +4.0% for 1H’19 … U.S. business investment spending has now flattened into the red, after going +4.7% for FY2017, +7.0% for FY2018, +4.4% for 1Q’19 but -1.0% for 2Q’19 and -2.7% for 3Q’19. U.S. GDP growth continues to be positive, modestly at +2.1% in 3Q’19, +2.0% in 2Q’19, +3.1% in 1Q’19, +2.2% in 4Q’18, +3.5% in 3Q’18, +4.2% in 2Q’18, and +2.0% in 1Q’18. Inflation appears to be on its way back. Crude oil prices are now slightly above the $55/bbl level and gold is slightly below the $1,500/ounce level. U.S. Treasury yield curve is flattening with prices declining for T-Bills & T-Notes but not so much for T-Bond. Prices for Western European sovereign debts, however, appear to continue with their rise. What rewards are commensurate at each level of risks? U.S. employment market has reached full employment below 4% unemployment rate at 3.7%. U.S. economy appears to be continuing in its current steady state expansion phase. May be time to look overseas? The US$ may face renewed long term pressures with structural deficits in foreign trade, increasing foreign competition, and looming national debt. The U.S. Fed Funds Rate Target is now at 1.50%, from 0.25% since 2016, 0% since 2009. With Fed Funds Rate at 1.50%, from 0% between 2009 thru 2015, inflation reportedly has remained under control. Prudence is strongly recommended, with U.S. Fed Funds Rate low … and the U.S. bull market not ending … while ECB continues its QE (euro version). Perhaps an opportunity to re-adjust portfolio holdings by eliminating the losers and replacing them with winners. Interest rates in the U.S. are apparently on the rise under new U.S. Federal Reserve Chairman Jerome Powell—gradually? Valuation level has become attractive—for liquidation—on a risk-adjusted basis for many issues.”

% change of stock indexes in North America at year-end 2019		Since Dec., 2018	Since Dec., 2017	Since Dec., 2015	Since Dec., 2012	Since Dec., 2007	Since Dec., 1997

DJ US Total Stock Market		28.42%	19.38%	56.56%	120.81%	122.92%
Dow Jones Industrial Avg.		22.34%	15.45%	63.78%	117.78%	115.14%	260.87%
Nasdaq Composite		35.23%	29.97%	79.19%	197.15%	238.30%	471.38%
S&P 500		28.88%	20.84%	58.07%	126.53%	120.03%	232.92%
S&P 400		24.05%	8.55%	47.51%	102.17%	140.39%	518.84%
S&P 600		20.86%	9.07%	52.02%	114.28%	158.43%	463.69%
NYSE Amex Composite		11.36%	-4.09%	18.77%	8.36%	5.93%	272.85%
Russell 2000		23.72%	8.66%	46.89%	96.44%	117.81%	281.78%

Canada S&P TSX Composite		19.13%	5.27%	31.16%	37.24%	23.35%	154.70%
Mexico IPC		4.56%	-11.78%	1.31%	-0.38%	47.41%	732.62%

% change of stock indexes in Europe at year-end 2019		Since Dec., 2018	Since Dec., 2017	Since Dec., 2015	Since Dec., 2012	Since Dec., 2007	Since Dec., 1997

U. K. FTSE 100		12.10%	-1.89%	20.83%	27.88%	16.81%	46.87%
Netherlands AEX General		23.92%	11.02%	36.84%	76.41%	17.22%	45.82%
Russia RTS		45.28%	34.17%	104.60%	1.44%	-32.38%	290.29%
Germany DAX		25.48%	2.57%	23.33%	74.05%	64.23%	213.64%
France CAC 40		26.37%	12.53%	28.92%	64.18%	6.48%	99.34%

% change of stock indexes in Asia at year-end 2019		Since Dec., 2018	Since Dec., 2017	Since Dec., 2015	Since Dec., 2012	Since Dec., 2007	Since Dec., 1997

Japan Nikkei 225		18.20%	3.92%	24.29%	127.57%	54.54%	55.03%
Hong Kong Hang Seng		9.07%	-5.78%	28.64%	24.42%	1.36%	162.90%
India BSE Sensex		14.38%	21.13%	57.95%	112.36%	103.35%	1,027.47%
Singapore Straits Times		5.02%	-5.29%	11.80%	1.76%	-7.45%	110.67%
South Korea KOSPI Composite		7.67%	-10.93%	12.05%	10.05%	15.84%	485.81%
Australia All Ordinaries		19.14%	10.30%	27.28%	45.83%	5.94%	159.98%
Taiwan TSEC Weighted		23.33%	12.72%	43.88%	55.82%	41.04%	46.53%