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Perspectives

Moving forward on trade

by Fortem Financial September 4, 2018

NAFTA negotiators remain upbeat about the prospects of a deal. This will be an "agreement in principle" rather than a full deal which means that while it won't be signed, it can still trigger the formal Congressional review so that Mexico's current President is able to sign it before his term ends and he leaves office. However, on Friday, negotiations between the U.S. and Canada appear stalled in meeting the White House’s imposed deadline. Even so, President Trump plans to notify Congress of the US/Mexico deal which he hopes will replace NAFTA. Canada’s heavy reliance on NAFTA export trade will pressure the country as negotiations continue into next week. Also, President Trump appears ready to implement the previously discussed $200 billion in tariffs on Chinese imports next week. Elsewhere, the European Union and the U.S. have not reached an agreement.

We continue to caution investors NOT extrapolate NAFTA progress with a deal with China. China negotiations are a different animal and we wouldn't anticipate much happening here until after the midterm elections.

Stocks continued to move higher last week in the run-up to Labor Day weekend.  The Nasdaq (+2.06%) led, followed by the S&P 500® Index (0.93%), the Russell 2000® Index (0.87%), and Dow Jones Industrial Average (0.68%).  Also, with comparatively low trading volumes, all of the major indices moved higher in August: the Russell 2000® and Nasdaq led with gains of 4.03% and 3.81%, respectively. Major factors included solid earnings, economic reports, and commentary by Federal Reserve Chairman Powell which reinforced the expectation of gradual interest rate increases.

Corporate news was fairly light although DSW, Inc., Lululemon and American Outdoor Brands rose in response to strong earnings; other retailers, including Box, American Eagle Outfitters and Movado disappointed. Oil prices rebounded as Chinese refineries resumed oil purchases; also, trade data suggest that the November trade embargo on Iran is already significantly impacting the country’s oil exports.

Looking ahead, investor attention will turn to third quarter earnings reports and corporate outlooks for 2019.  Trade issues, including NAFTA negotiations, and discussions with both Europe and China, will continue to influence market volatility.  Also, investors will closely monitor the upcoming mid-term elections, and the potential shift in party control of Congress. These events have the potential to create market volatility; but worldwide economic growth remains the primary driver. Valuations continue to rise, but not excessively so; overall, the positive bias heading into the Fall reflects the combined influences of moderate inflation, interest rates and market sentiment.

Source: Pacific Global Management Company

Chart reflects price changes, not total return.  Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

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Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017, 2018 Five Star Wealth Managers!

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Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client’s experience or of the Firm’s future performance. Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Five Star Professional Disclosure:
The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided. Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf
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Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness.

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Forward looking statements are based on current expectations and assumptions, the economy, and future conditions. As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict. Actual results may differ materially from the anticipated outcomes. Carefully consider investment objectives, risk factors and charges and expenses before investing. Fortem Financial is a registered investment adviser with the SEC. Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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