Quote of the Week
“Anyone who is a student of economic and market cycles knows when The Cycle Starts to slow, the most LEVERED and PRO-CYCLICAL ‘investments’ get hit hardest first. Then the rest follows…and the Old Wall Street starts begging the Fed for a bailout.” – Robert Coram (on John Boyd)
Stocks declined for the third straight week while bonds rose which is exactly what we want based on how the portfolios are positioned. Cyclical sectors led the way down as a string of disappointing U.S. economic data fueled worries that a slowdown in manufacturing will spread to other parts of the U.S. economy.
The Purchasing Managers’ Index showed that manufacturing activity contracted in September for the second month in a row. The services index also declined but remained just barely in expansion mode. The jobs report on Friday came in at 130,000 new jobs which is a major drop since the same month of a year ago.
Where does all this take us going forward? Unfortunately, third quarter data is just now starting to trickle in. Wall Street expects Q3 earning to be down 1.7%. Wall Street almost always gives a more rosy projection than what is realized. I am pretty sure they do that so investors think it is “all clear” to buy stocks. From what I read from trusted sources earnings could come in at negative 5% to 8% with a broadening of sectors including Energy, Materials, Consumer Staples, and Tech.
History repeatedly suggests that when stocks are going up on bad news, you’ve got to sell into it. The stock market is up only 1% since the end of April. We currently do not own any “stock market” investments at this time. We are maintaining our exposure to U.S. Treasuries, quality bonds, Utilities, and gold.
This may be the third or fourth time our office has shared this topic. However, since the requirements go into effect in less than a year, we cannot stress too much how waiting is not a good idea! If you travel, please don’t put this off.
ADOT News: Don’t Get Grounded: AOT & ADOT MVD urge Arizonans to get AZ Travel ID
New federal regulations to require updated identification for U.S. travel starting Oct. 1, 2020
Will your license fly? Don’t get grounded!
Governor Doug Ducey’s Office, the Arizona Department of Transportation – Motor Vehicle Division and the Arizona Office of Tourism are reminding Arizonans of the one-year countdown to new federal identification regulations that will impact whether Arizonans are allowed to board commercial airplanes. The offices are encouraging Arizonans to get their AZ Travel IDs, which are the state driver licenses and ID cards that will be accepted at airport security after October 1, 2020.
“October 2020 is closer than it may seem,” said MVD Director Eric Jorgensen. “Even though the calendar says there are 365 days until the new federal rules go into force, there are really only about 250 business days left before the deadline.” Starting October 1, 2020, new federal identification regulations take effect at all TSA airport checkpoints nationwide requiring all air passengers 18 and older to provide a federally-compliant ID to TSA personnel prior to boarding a flight.
He added, “We want people to experience the best possible service at MVD, and now is the best time to avoid any possible last-minute rush and get the Travel ID right away.”
The AZ Travel ID replaces the current driver’s license or ID and is distinguished by a gold star in the upper right corner.
“Whether you fly once a year or once a week, getting the new AZ Travel ID is the easiest way to keep visiting the greatest destinations in Arizona and across our country,” said Arizona Office of Tourism Director Debbie Johnson. “It only took me 20 minutes to get mine, the MVD really has this process streamlined.”
To get the AZ Travel ID, customers should initiate the process at www.aztravelid.com and then make an appointment at any MVD location through www.servicearizona.com. Appointments are preferred, but not required. Select third party MVD offices are also offering Travel ID service.
Follow the 1+1+2 rule to be sure you have the correct documents:
- Proof of identity: Valid U.S. Passport or birth certificate; AND
- Social Security number; AND
- Two documents proving Arizona residency: a utility bill, rental statement, etc,
The new federal regulations start Oct. 1, 2020, so all Arizonans are highly encouraged to gather the required documents and make their appointments as soon as possible.
ADOT News. “Don’t Get Grounded: AOT & ADOT MVD urge Arizonans to get AZ Travel ID” https://content.govdelivery.com/accounts/AZDOT/bulletins/263442d accessed 10-20-2019
By the Numbers
OVER PROMISED, UNDERFUNDED – The pension plans for state and local government employees nationwide are just 52% funded, i.e., the current fair market value of the assets backing public sector pension plans are equal to 52% of the present value of future liabilities as promised by the pension plans (source: Federal Reserve). Michael A. Higley, BTN 10-07-2019
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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.
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