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Happy New Year!

January 06, 2020
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The new year is rolling in with a lot of changes both in the economic/pollical world and with us as commentators on it!

First and foremost, we at SES Services just moved offices – although within the same building. We moved from Suite G-175 to Suite F-127 right down the hall. There is not a lot of drama associated with the move, we simply needed more room and our lease was up, so time to move! The biggest reason we need more space is because Colin Purcell has joined our team and will have an extra office himself.

On the economic front the more things change the more they stay the same. The American stock indexes continue to new all-time highs and we really had a Santa Claus rally in sharp contrast to last year’s aggressive selloff.  International markets, particularly European have now begun to follow. As the prices change, what has stayed the same is the less-than-robust economic statistics being published. A good example of this is auto sales figures:

Fiat Chrysler sales for Q4 fell 2% despite “robust” demand for the company’s Ram pickup trucks. GM deliveries fell 6% in the quarter and Toyota saw sales fall 6.1% in December, handily missing estimates for a 0.8% gain.

Or how about this:

According to Challenger, Gray & Christmas, Inc – Job losses tied to bankruptcies soared to levels not seen since 2005 as a slowing economy contributed to a downturn in employment.   

…so the dichotomy of a robust stock market and lackluster economics continues. What will bring either the economy up or the stock prices down to more of an equilibrium? Who knows, but it might be recent military conflict with Iran!

As of the writing of this weekly, the situation between the U.S. and Iran appears to have worsened since the drone strike on Gen. Qassem Soleimani last week. Supposedly the Iraqis have just decided to expel all foreign soldiers including the Americans. Iran is now declaring that there will be no limit to their enrichment of uranium in pursuit of nuclear weapons. President Trump has said that any retaliation on Americans by the Iranians for this drone strike will possibly be met with disproportionate response.

What does any of this mean? Not sure yet, but this could possibly escalate into a catalyst to turn the stock indexes south. In the meantime, the trade deal with China is supposed to have the first phase signed off on which we are confident the stock market would appreciate.

The risk meter is going higher, but we still don’t feel like it is time yet to batten down the hatches. Stay tuned and don’t sell your gold!

Regards and good investing!

Greyson Geiler