WEEKLY MARKET COMMENTARY

The Markets

“Fascinatingly counterintuitive…”

That’s how Michael Arone, an investment strategist, described the U.S. market environment to Avi Salzman of Barron’s:

“‘Stocks are rallying, but bond yields are reflecting much lower growth.’ Stocks rose during the quarter because the Fed backed away from raising interest rates, and investors grew more confident that the U.S. and China would sign a trade deal, Arone said. The market was also rebounding from a very rough fourth quarter – ‘conditions at the end of the year were wildly oversold,’ he noted.”

Consumer optimism may have played a role in U.S. stock market gains. The University of Michigan’s Surveys of Consumers Economist Richard Curtin reported:

“…the last time a larger proportion of households reported income gains was in 1966. Rising incomes were accompanied by lower expected year-ahead inflation rates, resulting in more favorable real income expectations…Moreover, all income groups voiced more favorable growth prospects for the overall economy…Overall, the data do not indicate an emerging recession but point toward slightly lower unit sales of vehicles and homes during the year ahead.”

The Bureau of Economic Analysis released its report on economic growth in 2018 last week. Real gross domestic product (GDP), which is a measure of economic growth after inflation, was revised down to 2.2 percent in the fourth quarter of 2018. Growth was up 2.9 percent for the year, though, which was an improvement on 2017’s gain of 2.2 percent.

Slowing economic growth gives weight to bond investors’ expectations, while consumer optimism supports stock investors’ outlook. Divergent market performance and conflicting data make it hard to know what may be ahead. One way to protect capital is to hold a well-diversified portfolio.

HOW MUCH DOES IT COST TO MAKE MONEY?

You may not have given it much thought, but it costs money to make money. In fact, the costs of the metals required to make some U.S. coins is higher than the value of the coins! George Washington and Abraham Lincoln might not approve, if they knew. Take this quiz to see what you know about the cost and value of U.S. coins.

1.     How much did it cost the U.S. Mint to make a U.S. penny in 2018?
a.      0.5 cents
b.     1.25 cents
c.      2.06 cents
d.     3.0 cents

2.     How much did it cost the U.S. Mint to make a U.S. nickel in 2018?
a.      1.25 cents
b.     4.97 cents
c.      6.03 cents
d.     7.53 cents

3.     What makes a coin valuable to a collector?
a.      Metal
b.     Age
c.      Rarity
d.     All of the above

4.     Which of these coins is the most valuable to collectors?
a.      1849 Coronet Head Gold $20 Double Eagle
b.     1913 Liberty Nickel
c.      1943-D Lincoln Wheat Cent Penny
d.     1835 Classic Head Gold $5 Half Eagle

Weekly Focus – Think About It

According to the Federal Reserve, the estimated lifespan of a $10 bill is 4.5 years. The estimated lifespans of a $5 and $1 bill are 5.5 years and 5.8 years, respectively. A $100 bill may last 15.5 years because it circulates less frequently.

Answers:
1.     It cost 2.06 cents to make a one-cent coin that few people use. A group of citizens has been encouraging the government to retire the penny.
2.     It cost 7.53 cents to make a nickel in 2018.
3.     All of the above.
4.     The 1849 Coronet Head Gold $20 Double Eagle is worth more than $16,600,000. It is one of the rarest U.S. coins.

At G&S Capital, we build dynamic portfolios and risk management strategies for each of our clients. Our client projects are led by knowledgeable, dedicated financial planners and supported by the G&S Capital team of specialists to provide personalized portfolios, unparalleled service, and independent advice

Sites & Sources

* These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s
Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named
broker/dealer.
* There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified
portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect
against a loss.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal
and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund
shares is not guaranteed and will fluctuate.* Government bonds and Treasury Bills are guaranteed by the U.S.
government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and
fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject
to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield,
maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the
stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index
performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and
emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S.
Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term
bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set
twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity
futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14,
1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the
Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict
future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted
will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* Consult your financial professional before making any investment decision.

Sources:
https://www.barrons.com/articles/the-s-p-500-is-off-to-its-best-start-since-1998-51553908143?mod=hp_DAY_1 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-01-19_Barrons-The_S_and_P_500_is_Off_to_Its_Best_Start_Since_1998-Footnote_1.pdf)
http://www.sca.isr.umich.edu (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/04-01-19_Surveys_of_Consumers-Final_Results_for_March_2019-Footnote_2.pdf)
https://www.reuters.com/article/us-usa-economy-spending/u-s-consumer-spending-soft-inflation-benign-as-economy-slows-idUSKCN1RA1EK
https://www.bea.gov/news/2019/gross-domestic-product-4th-quarter-and-annual-2018-third-estimate-corporate-profits-4th
https://www.usmint.gov/about/reports (Click on 2018 Annual Report, go to page 10)
https://www.federalreserve.gov/faqs/how-long-is-the-life-span-of-us-paper-money.htm
http://www.retirethepenny.org
https://www.usmint.gov/learn/kids/collectors-club/ten-facts-of-collecting#nine
https://www.usacoinbook.com/encyclopedia/most-valuable-coins/
https://www.usacoinbook.com/coins/4291/gold-20-double-eagle/coronet-head/1849-P/unique-smithsonian-collection/