"Trying to find the right solution to market problems always has obstacles" by: John Sample

    A holiday-shortened week of trading and, after hitting another record high, we pulled back for three straight days - a repeat performance over the last nine months. 
   Most of the reason was attributed to the concern that the Federal Reserve might forego a rate cut. 
   I see little or no reason to cut rates to support the economy. 
   My reading of the recent economic reports indicates a rather strong economy that is experiencing low unemployment and little or no inflation. 
   You would think that would make investors happy but as usual, they are more focused on what is going to happen six to nine months from now. 
   I can only say that you might reverse the rate increase made in December, as that was universally judged to be imprudent. 
   However, I would hold the rate reduction for when the economy really displays signs of stress.
I am not saying there are no concerns. 
   We are experiencing inverted yield curves. This is when long term yields are at or below short term yields. 
   This should never occur as risk should rise as time passes. 

   It only happens when the economy is under stress and people move all of their funds to the shortest term instruments to adjust quickly and protect the basis without worrying about gain from interest. 
   This situation is the very definition of a recession or depression. 
   I would contend that what we could face is deflation where demand drops and lower prices cannot bring it back.
   More importantly we saw the equities market move up, with trade talks between the U.S. and China back on the table and tariff increases put on hold for the time being. 
   That was coupled with the assumption of a rate decrease. 
   New record highs were met for about the fourth time with sellers outnumbering buyers. Summer has historically been a difficult time for markets to find strength.  
   This seems to indicate a period of lateral or no movement over the next several months. 
   It does give you time to clean up your portfolio. 
   I still hold out for a move to even higher levels than experienced last week by the end of the year. 
   The problem with that projection is that I don’t foresee a significant move. 
   I would point out to investors that there is much talk about looking for tax revenues by increasing rates on dividends. 
   It is being hailed as a way to tax the wealthy. 
   What I think is being missed is the fact that it is remarkable how many people actually own stocks. Though they are not traders, their pension and retirement funds are made up of equities. 
   These are teachers, police, firefighters and everyone who works at a job that offers some form of a 401k or funded retirement. 
   That is a significant part of the U.S. population and these people are far from rich. 
   It may sound good but it will hit the middle class hardest as does almost every tax proposal over time.

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