Cumberland Advisors Week in Review (Jan 14, 2019 - Jan 18, 2019)

The Cumberland Advisors Week in Review is a recap of news, commentary, and opinion from our team. These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.

MATT MCALEER'S WEEKLY RECAP

Interesting week. In our wrap up, Cumberland Advisors' Matt McAleer sees a lot of strength. He offers an update on International including a new position. We like the way emerging markets are acting. We keep an eye on volatility. Matt explains how markets are like snowflakes. Good trading to everybody! WATCH HERE

MARKET COMMENTARY

• Buyer Beware

  Shaun Burgess 01/17/2019

• Marijuana

  David R. Kotok 01/16/2019

• Zero Sum Game?

  David R. Kotok 01/14/2018

• China Slowdown and Financial Markets

  William Witherell, Ph.D. 01/11/2019

• Can the President Fire the Chairman of the Federal Reserve?

  Robert Eisenbeis, Ph.D. 01/10/2019

• Zika, Climate Change & January 25

  David R. Kotok 01/09/2019

• Q4 2018 Credit Commentary and a Look Ahead to 2019

  Patricia Healy, CFA 01/08/2019dw

• 4Q18 Review: Tactical Trend

  Matthew McAleer 01/04/2019

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UPCOMING EVENTS

• • Adapting to a Changing Climate

    From hurricanes to red tide and sea level rise, learn how a changing climate affects the Sarasota-Manatee region and the state of Florida. Expert speakers will discuss the challenges and impact on Florida and other coastal communities while uncovering the adaptive strategies that bring unique social and economic opportunities. The featured speaker is Bob Bunting, CEO Waterstone Strategies/Scientist/Entrepreneur - January 25, 2019 – Selby Auditorium, USFSM , 8:30 am – 3 pm. Lunch is included. Cumberland Advisors is a sponsor and Patricia Healy, CFA, from our firm will discuss "Climate, Municipal Bonds and Infrastructure" with the audience. Details Here.

• • • U.S. Manufacturing in a Global Context

      
       

      Join us Friday, February 1, 2019 at the Sarasota Yacht Club as we welcome Bill Strauss, Senior Economist and Economic Adviser of the Federal Reserve Bank of Chicago, for a presentation on U.S. Manufacturing in a Global Context during a special breakfast session. Bill’s chief responsibilities include analyzing the current performance of both the Midwest economy and the manufacturing sector for use in monetary policy. He organizes the Bank's Economic Outlook Symposium and Automotive Outlook Symposium. In addition, he conducts industrial and manufacturing roundtables throughout the year. Strauss will discuss manufacturing with a view of the sector from a present, historic, and future perspective that’s accessible to members of industry and the general public. According to Bill, “The demise of manufacturing in the USA is greatly exaggerated.” Thanks to the advent of new technology and lean manufacturing processes combined with a strengthening economy, manufacturing is experiencing a resurrection of sorts. Still, despite all the good news in the manufacturing world challenges continue to exist. Bill will also discuss the interrelationship between countries, including the current hot-topics of tariffs, the possibility of a 2019 economic slowdown, how viable is the U.S. manufacturing sector, BREXIT’s effect on the world economy, and ways manufacturers can leverage the latest advancements in technology to face challenges with little disruption. This breakfast presentation may be of interest to those in manufacturing and related industries, the general public, and investors wanting information on how the expansion or contraction of U.S. manufacturing may affect their portfolios. Note: The Fed does not offer financial advice nor suggestions for investors but the information is yours to benefit from. Attendees will have access to Strauss’ Federal Reserve handouts including his long-term analysis of manufacturing that has been updated to reflect current conditions and a summary of the most recent “Economic Outlook Symposium” held on November 30, 2018. Audience questions may be submitted to Bob Eisenbeis in advance at [email protected] for use in the session or for possible use during interviews at the conclusion of the talk. Inquiries about the event may be made via telephone, 941-926-6279, or at the aforementioned email address. Details Here.

• Moose on the Loose - Cruise the High Seas with John Mousseau

  
  
  If it's always been your dream to cruise the high seas with John Mousseau, your wish has been granted! John joins Steve Forbes and other money experts for The 31st Forbes Cruise for Investors on the Crystal Symphony. They explore cities and seaside villages stretching from Rio de Janeiro to Buenos Aires, January 24 – February 3, 2019. The roster of experts that accompany John plan to impart with their co-travellers timely and practical investment strategies including discussions of U.S. policies and how they’ll affect your portfolio. To join John or learn more, visit moneyshow.com

FEATURED INTERVIEWS

Summer of 2018 at Camp Kotok - Jeremy Schwartz, Director of Research at WisdomTree, & Leland Miller, CEO China Beige Book, discuss with David Kotok their day fishing, China, tariffs, trade, trade war, and Apple's trillion dollar valuation: will Apple be a casualty in the dust-up between China and Trump? How close were they in evaluating China?

IN THE NEWS

• The Bond Buyer - Deals pour in to slightly firmer market
• Quoted:John R. Mousseau, CFA 01/17/2019

• The Liscio Report - Fossil Fuels: $5 Trillion in International Subsidies
• Quoted:Cumberland Advisors 01/10/2019

• The Bond Buyer - Climate change, a rising tide affecting the muni market
• Quoted:John R. Mousseau, CFA 01/09/2019

• CNN Business - How Trump's trade war is unraveling the Trump rally
• Quoted:David R. Kotok 01/03/2019

IN CASE YOU MISSED IT

• Monetary Policy, Savings, and Markets

  David R. Kotok 12/04/2015

  From all that we observe in the United States (Federal Reserve), Europe (European Central Bank), Japan (Bank of Japan), and other jurisdictions, monetary policy now consists of three basic, interconnected variables. They are (1) central bank balance sheet size, (2) balance sheet composition and duration, and (3) policy interest rates set mostly in the short term but also possibly in the intermediate and longer term. This policy tool set is a massively different system from what was studied for decades and applied for more than half a century. Today’s world no longer reflects the monetary dynamics envisioned by Milton Friedman. Let’s look at this configuration of policy tools in the sequence outlined above and then integrate it into portfolio management issues. Continued...

• Chicken Little

  David R. Kotok 01/16/2011

  Meredith Whitney continues to forecast large ”defaults” in the Muni sector. She is now saying that none of the 50 states will default but that 50 to 100 cities and $100s of billions of Munis will default. Chicken Little? Or Cassandra? Time will tell. In Muniland, mutual fund redemptions are driving fund managers to liquidate tax-free Muni bond positions into a market with falling prices. Pricing references for bonds are used to reprice the estimated market value of all bonds. Very few Munis trade every day. The Muni sector is not like the stock market; pricing is not transparent. So unsophisticated investors watch their prices seem to fall and they hear the media hype and they panic. That triggers more mutual fund redemptions and the cycle repeats itself. Right now, there are Munis backed by federally guaranteed payment streams that are trading at yields above their US Treasury counterparts. The Munis are tax-free. The treasuries referenced are taxable. Clearly, this is not about credit risk or default risk. We are talking about bonds that have the US government as the source of credit on both sides of the comparisons. Clearly, something else is going on. Continued...

ADDITIONAL RESOURCES

Lessons from Thucydides

David R. Kotok has written the monograph pamphlet, “Lessons from Thucydides” detailing information asymmetries and their implications for investors and world affairs. The concept of a Thucydides Trap and its rise and avoidability (or lack thereof) is often debated and David makes a case for dealing with them weaving current and historical events into a comprehensive narrative.

This free monograph also has lessons for President Donald Trump’s trade policy. Can the United States avoid a Thucydides Trap with China & Xi Jinping? Will you benefit from the Lessons of Thucydides or fall victim to a Thucydides Trap? If information is key, you now have a handbook at your fingertips. Download a copy of this monograph in either PDF (free) or Kindle ($.99) format. https://www.cumber.com/thucydides/

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