INSIGHTS FROM FIRST FOUNDATION

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The Week Ahead – Holiday Card Season

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

We’re now officially in December – queue the Christmas music! I’m sure we all took advantage of Black Friday and Cyber Monday and have completed our holiday shopping (wishful thinking!), but the real question is: have you mailed out your holiday cards yet? If you’re like me, the arrival of that first holiday card is a stark reminder to hurry up and get them done! The tradition of holiday cards began as Christmas cards, with the very first recorded Christmas cards being sent out by King James I of England in 1611. The custom of sending out Christmas cards originated with Sir Henry Cole in 1843 and originally displayed flowers, fairies, celebrations, and other designs rather than winter or religious themes. As with many things, Christmas and holiday cards have evolved, and many of the holiday cards I now receive are photo collages of the sender’s family, pets, travels, and are often accompanied by a letter with an update of what happened throughout the year. If the market could send out a holiday card this year, what would be on there? Macro or fundamentals? New market highs or increased volatility? FAANGS or de-FAANGing? Fed rate hikes or tight credit spreads? Trade wars or trade resolution? 2018 has been a whirlwind year to say the least!

In the week ahead investors will have a slew of data points to review, with Friday’s jobs report as the highlight. There could be continued downward pressure on the unemployment rate and it would not be surprising to see it tick down further. Additionally, wage inflation will be monitored closely, through October the average hourly earnings for all employees on private nonfarm payrolls have increased by 3.1% so far this year. The market is now pricing in an 83% chance of a rate hike at December’s FOMC meeting and only 1.3 rate hikes in 2019 after Fed Chair Powell’s most recent comments that interest rates are just below neutral. Sticking with 83%, I’m giving myself an 83% chance of getting out my holiday cards before Christmas! Happy holidays!

Data deck for December 1-December 7:

Date

Indicator

Period

December 3

Construction Spending

October

December 3

ISM Manufacturing

November

December 3

Total Vehicle Sales

November

December 5

ADP Employment Report

November

December 5

ISM Non-Manufacturing

November

December 6

Initial Jobless Claims

----

December 6

Trade Balance

October

December 7

Unemployment Report

November

December 7

Nonfarm Payrolls

November

December 7

Average Hour Earnings

November

December 7

Wholesale Inventories

October

December 7

University of Michigan Consumer Sentiment

December

 

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Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by First Foundation Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from First Foundation Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. First Foundation Advisors is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the First Foundation Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: First Foundation Advisors does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to First Foundation Advisors’ web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Andrew Chan, CAIA, Portfolio Strategist
About the Author
Andrew Chan, CAIA, Portfolio Strategist
Mr. Chan serves on the investment team and is responsible for conducting investment manager research and portfolio construction. As a member of the investment committee, he provides market commentary and investment insights. Mr. Chan’s responsibilities include overseeing client portfolios, calculating risk metrics, conducting the rebalancing of client portfolios, and evaluating the selection of new investment managers. With over 10 years of wealth management experience, Mr. Chan has played key roles across various aspects of investment and wealth management. Prior to joining First Foundation Advisors, Mr. Chan was most recently a portfolio manager at U.S. Trust where, in addition to his daily responsibilities, he served on numerous internal committees including the investment manager committee, the portfolio model committee, and the strategic technology committee. He also served on the in-house strategic consultant committee reporting directly to the President of U.S. Trust. Mr. Chan is a graduate of the Wharton School Executive Program on Investment Management and holds a Bachelor of Arts degree in Business Administration from the University of California, Riverside. He is a Chartered Alternative Investment Analyst (CAIA). Mr. Chan serves on the executive board for CAIA Los Angeles and is the Interim President for the association. Read more
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