Quote of the Week
“Ignorance can be cured, stupidity is hopeless.” – Larry Lof
Stocks declined again last week amid rising trade tensions and geopolitical uncertainty. The White House announced the U.S. would impose tariffs on Mexico due to the border crisis, adding to concerns about the unresolved U.S.-China trade issues and their impact on global growth.
The month of May marked the most sizable stock market pullback this year with the S&P 500 down 6.6% and the Nasdaq down 8.8%. Meanwhile, bonds rallied significantly with all our portfolios taking advantage of the rally in bonds. We are currently positioned in a risk-off mode with very high exposure to the bond market. Remember when interest rates fall, bond prices go up.
No one is sure whether higher tariffs on China and Mexico are short-term tactics designed to achieve specific actions or long-term strategies that could remain in place. Both possibilities have occurred. The initial tariffs on steel and aluminum lasted longer than expected and were removed just two weeks ago, but proposed tariffs on Chinese imports were delayed in the past and kept as threats.
Higher tariffs on U.S. imports generally lead to higher prices here and slower economic growth for the countries involved. There is no getting around the fact that tariffs are a tax increase on the American consumer. Economic growth in the U.S. is slowing faster than the headlines are stating.
Investors who focused on this month’s stock market pull-back may have missed the unexpected drop in the 10-year Treasury yield to 2.14% as of this day (Tuesday). That’s the lowest rate in almost two years, and once again below the 2.29% rate on the 3-month Treasury bills which is causing an inverted yield curve. The inverted yield curve has been a reliable recession signal predicting nine out of the last nine recessions. It doesn’t give us the time frame until the recession starts but with the tariff issue front and center causing an economic slowdown, we may be seeing a recession sooner rather than later.
|Name||Wkly %Chg||YTD %Chg|
|Dow Jones Industrials||-3.01||+6.68|
|S&P 500||– 2.62||+09.78|
|10-yr Treasury Yield||-0.18||-0.55|
|*5-day performance ending Friday|
A funny thing happened when we recently stopped for gas in Las Vegas. I headed into the convenience store while my hubby attempted to gas up our car. My phone beeped with an alert warning me of possible credit card fraud. I realized that it concerned the gas pump, so I followed the prompts stating it was okay. No sooner had I finished when another alert sounded on my phone.
Apparently, hubby wasn’t patient enough and tried another credit card triggering a similar event. I stood and answered the questions on my phone’s credit card app. Imagine my surprise when I finished, looked up, and saw hubby paying CASH for gas! NO! I like to collect the credit card points and conserve our cash when traveling. But I digress.
When we three realized what was happening, I told the clerk that I had set travel alerts on the two credit cards, so this shouldn’t have happened. The clerk responded usually the transactions would have gone through, but not in Vegas, baby. Too many fraudsters try to get away with free gas in Las Vegas, so your credit card should alert you despite any travel notifications you have created. That’s my tidbit for the day.
Since it is the summer travel season now, below is an article that helps you navigate your credit card web site in search of creating a notification. Bon voyage!
How to create a credit card travel notification Written by Ben Luthi
If you’re planning an upcoming trip, your to-do list is probably already a mile long. But before you leave, it may be in your best interest to keep your credit card issuer in the know with a travel notice.
“If you’re using your credit card in a new location, especially a foreign country, that’s a huge red flag for potential fraud,” says Lee Huffman, a travel expert at BaldThoughts.com.
To protect itself and you, your issuer may end up declining the charge.
If this happens, you’ll typically have to call the issuer to prove you attempted to make the purchase and get the go-ahead to try again. But it can still be an embarrassing experience.
“My wife and I were visiting friends in Dallas a few years back and were buying some groceries,” Huffman says. “When it came time to pay, my card was declined as a potentially fraudulent transaction. I was beyond embarrassed to have this happen in front of my wife and friends.”
If you’re overseas or visiting an area with bad cell service, it could get even worse. If you can’t get ahold of your bank and don’t have a backup payment method, you may end up stranded.
To help avoid this potential hassle or an embarrassing situation, contact your bank to let it know your travel plans. It’s also a good idea to make sure your contact info with the issuer is up-to-date. That way, it can easily contact you if it spots an issue while you’re away.
How to set travel notifications with common credit card issuers
“The easiest method of placing a travel alert is to call the number on the back of your credit card,” Huffman says. “You can also send a secure message through the bank’s online portal.”
But if you don’t want to wait on hold for customer service or you’re leaving for your trip in the next few days and can’t wait for a message to be processed, you may have other options. And depending on the issuer, you may not even need to create a notification at all.
American Express – Because of the fraud detection practices the issuer uses, setting an American Express travel notification is unnecessary. In fact, there’s not even an option to create one online.
Bank of America – You can set up a Bank of America travel notice on your mobile app or through your online account.
How to set up a travel notice through your online account:
- Log in and hover over the “Help & Support” menu tab.
- Click on “Set Travel Notice” in the drop-down menu.
- Enter your destination(s), travel dates, contact number and card(s) you’re taking with you. Share any other travel details you think are relevant.
Barclays – You can easily set up a Barclays travel alert through the mobile app or online:
- Log in to your account and go to Tools/My Travel.
- Share where you’re traveling to and the dates you’ll be gone.
Capital One – As with American Express, setting a Capital One travel notice isn’t necessary. While there still seems to be an option through your online account, clicking on it gives you the message, “Travel notifications are no longer needed!”
Chase – To set a Chase travel notification, start by logging into your online account:
- Click on the icon with three horizontal bars at the top left of your screen.
- Click on “Profile & Settings.”
- Scroll down to the bottom under “More Settings” and click on “Travel.”
- Click on “Update” at the far-right side of the credit card section.
- List your departure and return dates and your destination.
Chase travel notices require a bit more legwork to set up than alerts with other banks, but it may still be worth it if you want to avoid the trouble or embarrassment of being unable to use your card while traveling.
Citi – Rather than searching through your online account, Citi allows you to create travel notifications through its dedicated travel notice page.
- Click on “Set Up/Manage.”
- Log in using your user ID and password.
- Select the card you plan to take with you and click on “Add a Travel Notification.”
- Select which user(s) will have the card, your travel dates and destination.
You can also create a travel notification through Citi’s mobile app:
- Click on “Card Management.”
- Click on “Travel Notices.”
- This will take you to Citi’s Travel Notices page. Once there, click on “Add A Trip.”
- Select the card you plan to take with you.
- Enter your trip’s start and end date.
Discover – To set up a travel notification with Discover, start by logging into your account online.
- Select the card you’re planning to take with you.
- Click on the “Manage” menu tab at the top of your screen.
- Click on “Register Travel” under the “Manage Cards” section.
- Enter your destination(s) and trip dates.
U.S. Bank – Unlike most of the other top banks, U.S. Bank doesn’t allow you to create a travel notification through your online account. Instead, it recommends that you contact its customer service team directly.
Wells Fargo – If you want to take your Wells Fargo credit card with you, set up a Wells Fargo travel plans notice. You can do so through the bank’s mobile app or through your online account.
- Start by logging into your account.
- Hover over the “Accounts” drop-down menu at the top of the screen.
- Click on “Manage Travel Plans,” which is under the “Manage Cards” section.
- Enter your travel dates and destination(s).
Setting up credit card travel notices is a good idea if you want to avoid the hassle of contacting your credit card issuer while traveling. And while you’re at it, make sure you have the right card for your trip. For example, some of the best travel credit cards charge no foreign transaction fees, making them a great travel companion for overseas trips.
Some of them also offer special travel protections, such as travel accident insurance or trip cancellation and interruption insurance, which can reimburse you for some costs if your trip is canceled or cut short for a covered reason.
Shop around and compare several cards with your current one to make sure you’re getting as much value as possible.
Luthi, Ben. How to create a credit card travel notifications, Credit Karma, https://www.creditkarma.com/credit-cards/i/how-to-travel-notification/ Accessed June 3, 2019
By the Numbers
THIS IS THE MONTH – The month of June has had the greatest number of existing homes sold during each of the last 5 calendar years (2014-2018). 570,000 existing homes were sold in June 2018, an average of 19,000 a day nationwide (source: National Association of Realtors). Michael A. Higley, BTN 06-03-2019
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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.
The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.
Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.