Our Thoughts

FJY News to Know #46

Will International Equities Finally Surpass the U.S. & Canada?

Save for two brief periods in the 1980s and 1990s, the S&P 500 has always outperformed foreign stocks and other equities.  However, many believe that some noticeable factors might change that in the coming years.  One of these factors is the relative valuation of U.S. vs. foreign investments.  Many notable firms, including GMO of Boston — have predicted that the EAFE (Europe, Australiasia & Far East) will outperform the S&P 500 to the tune of almost four percentage points in the coming decade.  Another prime factor in the outlook is a weakening USD:  They believe the U.S. will be forced to cut its interest rates — something other nations have already done.  For more perspective on this international economic phenomenon, click here.

 

Google Enters the Financial Fray — On the Heels of Other Tech Giants

Project Cache is Google’s 2020 plan to offer checking accounts to its consumers.  The account will be managed by Citigroup, and it also plans on establishing a credit union at Stanford.  Like other big tech companies, Google is counting on this financial venture as an alternative way to gather market research.  However, other companies’ attempts to marry tech with finance haven’t met with sterling success:  Apple began offering a credit card a few months ago via Goldman Sachs, but suffered the backlash of its marketing slogan which read, ‘Designed by Apple, not a bank’.  To read more about the federal impact of tech companies becoming financiers, go here.

 

Trump’s Trade War With China is Ravaging U.S. Exports in Most States 

The U.S. trade war with China is having a severe impact on many states, with a few exceptions.  Many of these states have seen double-digit drops in their exports leading up to September.  Included in the group is Texas, whose main export to China is oil.  The total loss for the Lone Star State was a whopping 39%.  Another casualty is South Carolina, home to a major Boeing plant.  The aerospace giant produces several notable airliners there, including the recently grounded 737 Max, the new 777X, and the 787 Dreamliner.  To read more about this critical economic benchmark, as well as the states that have emerged unscathed — please click here.