Economic expansion and bull market longevity outlook with Don Rissmiller and Nick Bohnsack, members of Strategas’ top-rated research team.
WEALTHTRACK Episode #1534; Originally Broadcast on Feburary 08, 2019
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- Co-Founder, Partner, Chief Economist,
- Strategas Research Partners
- Co-Founder, Partner, Strategist,
- Strategas Research Partners
2019 could be a year for the record books. The economic expansion turns ten this summer, which would make it the longest recovery ever. The bull market reached that milestone in August of 2018 and despite serious fits and starts has continued its run. The S&P clocked in its best January performance since 1987 with an 8% gain.
If the Federal Reserve has its way both the economy and market will continue to advance. In its January policy-setting meeting the Fed announced it was putting its interest rate increases on hold for now. The policy setting Federal Open Market Committee or FOMC announced that in seeking its dual mandate of maximum employment and price stability it would “… maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent.”
According to the Wall Street Journal this is the first time that, “The Fed dropped explicit references to future interest-rate increases that have been in its monetary policy statements since 2015.”
Is the Fed’s pause a cause for alarm? A closer look at the Fed’s dual objectives is reassuring. The civilian unemployment rate remains near historic lows, around 4% with the percentage of the working age population participating in the job market above 60%. That’s considered full employment. Meanwhile prices remain stable. The Fed’s preferred inflation measure, the Core PCE, that’s the Personal Consumption Expenditures Index minus volatile food and energy prices remains well within its 2% target.
Why then is the Federal Reserve on hold? Is there justification for the pickup in anxiety about a possible recession and bear market among business leaders and professional investors?
Joining us for the first time on WEALTHTRACK are two key members of Strategas Research Partners, a top-rated macro research firm by Institutional Investor. Don Rissmiller is a Co-Founder and Partner of Strategas, where he is the Chief Economist, Director of the firm’s Macroeconomic Research efforts and oversees its thematic research as well as high-frequency econometric forecasting.
Nicholas Bohnsack is also a Co-Founder and Partner, Head of Quantitative Research who directs the firm’s equity sector strategy and global asset allocation efforts. Bohnsack is also President and CEO of Strategas Asset Management, the firm’s registered investment advisor. Bohnsack is portfolio manager on four thematic portfolios launched in recent years: Dividend Growth, Earnings Momentum and New Sovereigns Portfolios and the Policy Opportunity Strategy.
We’ll find out how concerned they are about the possibility of recession and bear markets.
As always, if you miss the show on Public Television, you can watch it on our website. You’ll also find an exclusive EXTRA interview with Bohnsack and Rissmiller about two books exploring game-changing developments affecting technology and the economy.
Thank you for watching. Have a lovely weekend and make the week ahead a profitable and a productive one.
NO MATTER HOW TEMPTING, AVOID MARKET TIMING
- If out of U.S. stock market for 25 best days between 1970 and 2015 returns reduced from +1,910% to +371%
- If out of UK stock market for just 2 quarters since 1900 cumulative real returns reduced by + 50%
- If out of U.S. market for just 2 quarters since 1900 returns reduced by + 66%
RISSMILLER: CONTRARIAN MIX
- Buy stocks that act like bonds such as dividend-paying stocks
- Buy bonds that act like stocks such as high yield bonds
- Opportunities that move against algorithmic trading and automatic asset allocation programs
BOHNSACK: DIVERSIFIED FUND
Own a global multi-asset allocation fund
Morningstar Medalists include First Eagle Global, FPA Crescent and Loomis Sayles Global Allocation .
No stock mentions in this episode.
This is the first appearance of these guests.
Two key members of Strategas Research Partners’ top-rated macro-research team recommend two books exploring game-changing developments affecting technology and the economy.