"Is it the summer heat that has me sweating, or is it stock indexes? " by: John Sample

   Another week and we are really on a roll as the Dow is now down for six weeks in a row.   
   There are analysts that are more concerned about the broader market worrying about the Standard & Poor’s 500 stock-index could move down to 2650 and were just weeks ago talking about 2722.   
   Moreover, the tech sector has been taken out to the cleaners recently with the FANG stocks really being hit.   
   It does not help that anti-trust concerns as it pertains to Google and Amazon.   
   Facebook can’t get beyond the public’s concern about privacy issues.   
   Apple has its own problems with the significant exposure to China. It makes Netflix look like a winner with little or concerns on hardly any of these issues.  
   While all seems nothing but bad news, we look up and energy prices are lower but stable. Treasury yields are for the 10 year are getting close to 2% reflecting the market’s view that the Federal Reserve will likely cut interest rates.   
   Inflation is hibernating for an extended period of time with little thought of raising its ugly head. Last quarter’s GDP was above 3%.
   All seems like great economic news except for the fact that tariffs and trade negotiations seem certain to take the air out of the room.   
   Almost to a unanimous chorus, economic analysts are predicting the second-quarter GDP to drop to 1%.   
   That cannot be good for next quarter’s earnings and many reports from CEOs are predicting a slowdown.  
   Last week the President announced a tariff on Mexico should they not assist in stemming the flow of illegals into the US.   
   This comes when we have yet to pass the recently renegotiated trading pact between Canada and Mexico.   
   Can you say delete the guacamole when you visit your favorite Mexican restaurant?  
   It is not the easiest of times to be an investor in equities.   
   I would say there are such things as boring dividend-paying equities that are approaching reasonable prices again.   
   Many are large cap companies with limited exposure to China. 
   When you can get 5% on your money and interest rates dropping, it makes chasing tech stocks seem a little bit of an adventure not worth taking.   
   You will see investors revisit the likes of real estate investment trusts and master limited partnerships.  
   It seems clear we are so far into the next election cycle that nothing will get done in D.C. except a debt extension.   
   The next election is 16 months from today. That is a long vacation, but such can be the case when investing in equities.   
   With most of the major indexes and averages below the 200-day moving average, it seems unlikely we will have a big reversal to the upside any time soon.   
   I hate to admit it, but these are the times that get my attention as a value investor.   
   It is early but a great time to start paying attention and tracking stocks that you missed before. 
   And people say you never get a second chance. In the stock market, you will get chance after chance.   
   So, instead of just reading great novels this summer, try examining the financials.   
   It won’t enrich your mind but it could enhance your balance sheet.   

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