2019 MARKET COMMENTARY
The opinions, views, and beliefs expressed within all Market Commentary are those of the authors and do not necessarily reflect or represent any official policy or position of any company, partners, or clients to which the authors are associated. This Market Commentary has been prepared and published onto this Private Research Database for informational purposes only. Any opinions, recommendations, and assumptions included are based upon current market conditions, reflect the authors’ judgment as of the date of this publication, and are subject to change.
All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed and the author makes no representation as to its accuracy or completeness. Securities highlighted or discussed in this Market Commentary are mentioned for illustrative purposes only and are not a recommendation for these securities.
Holiday Shopping Season Recap: Overall holiday shopping reports appear to be very strong. According to a report by Mastercard, total sales for the period November 1st to December 24th grew by 3.4% from the same period in 2018. Online sales jumped 18.8% over the same comparison period. All of the major categories (apparel, jewelry, electronics/appliances, and home furniture/furnishings) saw increases over sales from last year…
The Hong Kong Bill and What It Means for the Sino-American Trade War: Just before the Thanksgiving holiday, the president signed the Hong Kong Human Rights and Democracy Act into law. This bill passed with relative ease and support in both chambers of Congress, but there has been much speculation over whether or not it would be signed into law given the controversial nature of the bill and the persistent trade war with China…
A Look at the Fed’s October Decision, 3rd Quarter GDP Data, and What’s Next: October 30th was a busy day for markets. It started off with the Commerce Department announcing 3rd Quarter GDP data and rounded out with a post meeting press conference with Fed Chair Jerome Powell. GDP data came out 30 basis points higher than was expected going into the report at 1.9% annualized growth in the 3rd quarter compared to an expectation of only 1.6%…
The Gloom and Doom News That You’ve All Been Waiting For: The headline to this section is very similar to many headlines that have been coming out over the last few weeks. According to data compiled by the Wall Street Journal, news outlets all over the world are producing economic/business news pieces with a tone so negative it is generally reserved for recessions…
Consumer Spending Diverges between High, Middle, & Low-Income Consumers: With how much ink issues surrounding policy proposals, trade disputes, and the President’s tweets receive, it may come as a surprise to some that the longest expansion on record has been driven largely by the U.S. consumer. In fact, consumer spending makes up roughly 70% of GDP growth which is massive compared to other components such as trade which makes up only 3-4%...
What the Venture Capital Market is Telling Us: In early July, Crunchbase, a business information platform, released their quarterly report on global venture capital. The highlights showed a mixed state of affairs for venture capital broadly. While the number of deals has remained stable, the dollar volume of deals has dropped significantly since the fourth quarter of 2018…
Weird Weather - Part I: Unusually high levels of rainfall and colder than normal temperatures have not allowed Midwest farmers to plant crops such as corn and soybeans. As of the third week in May, 49% of corn acreage had been planted compared to a 5-year average of 80% for this time of the year. Low grain prices from tariffs on farm goods and the further threat of a prolonged trade war with China have also disincentivized farmers from planting…
U.S. Auto Sales Breakdown in First Quarter: Several major automakers reported declines in 1st quarter U.S. sales in early April. Industry analysts followed these reports with expectations that the industry as a whole would see declines of 3% to 4% for the 1st quarter year-over-year, and as much as 5% year-over-year for the month of March, which is typically a strong month for the industry…
Q4 Brought a Substantial Drop in Household Net Worth, Is Spending Next: With the huge stock market sell of that occurred in the fourth quarter of 2018 (and mostly in December), recent readings of household net worth in the United States have come back significantly lower from the previous year. This is not in the least surprising, and neither would a subsequent drop in consumer spending for the first or even second quarter of 2019 since it is commonly held that there is some connection between net worth and propensity for consumption (i.e. the more rich I feel, the more likely I am to buy something)…
December 2018 Retail Sales - Big Miss or Fake News: Delayed due to a lapse in federal funding from December 22nd, 2018 to January 25th, 2019, December 2018’s retail sales report was released by the U.S. Census Bureau on February 14th and was met with a mix of negative and confused reactions. The report for December 2018 pegged consumer spending as having fallen 1.2% from the previous month (November 2018)…
January Economic Data: Data from the beginning of January shows a noticeable slowdown in the manufacturing data reported from several Fed regions. New orders, order backlogs, and capacity utilization all showed major pullbacks. This is coming on the back of robust activity for most of 2018 where fears of increased tariffs on Chinese goods prompted many businesses to bring production forward and hold more inventory…
December Fed Meeting: In the final meeting of 2018, the U.S. Federal Reserve elected to raise its target range for the federal funds rate another 0.25% to between 2.25% and 2.50%. This caps off a year which saw 3 such quarter point increases. After the steep stock market declines in October and November, many market participants began to speculate that the Fed would hold off on a final increase for the year. The White House (mostly the President via Twitter) expressed high levels of disapproval over this and potential further rate increases by the Fed…
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