Good Evening, Well, right now it’s all about China. This past Friday it seemed like we were cruising toward a new trade deal on this coming Friday and a “new trade deal rally” to go along with it. Nothing is ever easy and this is no exception. The market has now sold off for two successive days after President Trump tweeted that he would impose additional tariffs on Chinese goods if no deal is reached by Friday. It seems that China decided to back track on some previously negotiated and agreed upon issues. While we don’t know exactly what they are we know that there will be no deal without them. Many feel that the theft of intellectual property is probably one of them. It’s obvious that President Trump is sending them a message that they need not come this week if they are not serious about an agreement. It is largely felt in the analyst community that the Chinese feel like President Trump has to have an agreement for the upcoming election and that he will let some previously agreed upon concessions slide. I believe the President knows that a bad agreement is worse than no agreement at all. A good agreement is best for the economy which in the long run makes if best for investors! One encouraging piece of news that was released today is that Chinese Vice Premier Liu He will be traveling to the United States for the talks on Thursday and Friday. That is seen as a sign that China is serious about reaching an agreement and averting additional tariffs. Vice Premier Liu was originally supposed to come on Wednesday but nevertheless, the fact that he is still coming at all is a good sign. The tariffs are set to go into effect at midnight on Thursday night so expect the market to be volatile until that time. It will surely rise and fall on every news release and/or rumor. However, we most likely will not see a resolution to this issue until Friday at the earliest if we see one at all. I personally believe we will and that the Chinese are just trying to gain additional concessions from President Trump based on American politics. That said, we all know what a bad deal would ultimately do for the economy and the market. In the end it will boil down to whether the Chinese believe our economy is strong enough to win a protracted trade war. It says here that this is hurting them worse than it is us. I believe and this is just my opinion that in the end they will be the ones who have to make a deal. They simply have the most to lose. So should investors step aside until this is over? I don’t think we should. I’m going to go with the old adage here that says ‘you have to be in it to win it’. One more thing. I don’t have a single chart with a sell signal just yet. So as usual…..we will see……
The days carnage left us with the following results: Our TSP allotment posted a drop of -1.65%. For comparison, the Dow fell -1.79%, the Nasdaq -1.96%, and the S&P 500 -1.65%. It was an ugly day to be sure!
The days action left us with the following signals: C-Neutral, S-Neutral, I-Neutral, F-Buy. We are currently invested at 100/C. Our allocation is now +11.87% not including the days results. Here are the latest posted results:
| 05/06/19 | Prior Prices | ||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 16.1391 | 18.6961 | 42.3297 | 53.2826 | 30.0655 |
| $ Change | 0.0033 | 0.0267 | -0.1867 | -0.0296 | -0.1865 |
| % Change day | +0.02% | +0.14% | -0.44% | -0.06% | -0.62% |
| % Change week | +0.02% | +0.14% | -0.44% | -0.06% | -0.62% |
| % Change month | +0.04% | +0.08% | -0.43% | +0.74% | -0.67% |
| % Change year | +0.92% | +3.05% | +17.74% | +21.16% | +12.55% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 20.4894 | 28.2362 | 32.6463 | 35.6687 | 20.7154 |
| $ Change | -0.0144 | -0.0295 | -0.0825 | -0.1086 | -0.0721 |
| % Change day | -0.07% | -0.10% | -0.25% | -0.30% | -0.35% |
| % Change week | -0.07% | -0.10% | -0.25% | -0.30% | -0.35% |
| % Change month | -0.04% | -0.07% | -0.19% | -0.23% | -0.26% |
| % Change year | +4.06% | +5.38% | +10.15% | +12.02% | +13.64% |
