Our Current Thoughts on the Market

We all have noticed the pickup in market volatility; one could compare it to a game of Dodge Ball.  One day the market is up and looks like all is well and the next you have to dodge, duck, dip, dive and dodge again. One of the analysts/portfolio managers we follow is Bob Doll, Senior Portfolio Manager and Chief Equity Strategist at Nuveen asset management.  We have followed Bob for more than a decade, and his insights to the markets have been very valuable to us and our clients in the past.  We thought you would appreciate hearing Bob’s views of the current market.

Nuveen Weekly Investment Commentary 

10/29/2018

Stocks once again experienced a strong selloff last week as investor concerns over a number of issues grew. It seems that strong earnings results have not offset fears of a future slowdown in earnings growth, the stronger dollar, rising input costs, a weak housing market, uncertain trade policy, slowing growth in China and rising interest rates. The S&P 500 Index lost 3.9% for the week, and notched a peak-to-trough 10% correction. We recognize the downside risks and expect volatility to continue, but also think sentiment is worse than reality.

Ten themes in the midst of volatility

  1. U.S. economic growth remains solid. Third quarter gross domestic product advanced 3.5%, putting the year-over-year gain at 3.0%. Consumer spending was strong, although capital expenditures showed some weakness.
  2. Manufacturing levels may come under pressure. The closely watched Richmond Fed Manufacturing Index fell to a six-month low in October. Although other regional reports showed more strength, the decline could be a cause for concern.
  3. The outlook for global growth may have weakened recently, but we see no near-term signs of significant financial pressures. We do not see undue pressure in the credit markets. High yield credit spreads have widened slightly, but still remain relatively tight. And while stock prices have declined sharply, valuations have become more attractive.
  4. Global fiscal policy is likely to be simulative next year. Countries around the world are worried about keeping pace with U.S. growth. We expect a number of countries to adopt stimulative measures as a result, and think corporate tax cuts could be cut across jurisdictions.
  5. Corporate earnings remain strong, but growth is set to slow. Third quarter earnings are on trend to show slower growth than the first half of the year, but we expect they will still be up more than 20%. Forward guidance from companies suggest management teams are growing more concerned about trade issues, as well as factors associated with the aging economic cycle: rising interest rates, higher wage costs, transportation cost pressures and the stronger dollar.
  6. Earnings growth may disappoint in 2019. Consensus expectations call for double-digit growth levels next year, but we expect approximately 6% due to the issues we just cited.
  7. Downward pressure in the financial sector could persist. Since the start of earnings season, this area of the market has declined significantly. Higher rates are causing tighter lending conditions, while a flatter yield curve has put pressure on margins.
  8. We believe the U.S. stock market is approaching a bottom. We don’t think we have yet seen the sort of investor capitulation usually associated with the end of corrections, but we may be getting close. Rallies have been short-lived and narrow in scope, but we believe that may start to change if sentiment bottoms.
  9. We may have seen the market highs for the year, but we also expect the bull market to continue. Our best guess is that the record highs established in early October will have marked the high point for 2018. But we also believe there is a more than 50% probability that markets will reach new records before the bull market is over.
  10. History suggests the post-midterm-elections period could be good. Since 1950, U.S. stocks have never experienced a price decline in the 12 months following a midterm election.4 And the average price gain for the S&P 500 Index has been 15.3%.

Market conditions have become more complicated in recent months

Around Labor Day, investors were generally sanguine, and volatility was low. Now, stock markets are in correction territory. What changed? A long list: a worsening U.S. political backdrop; slowing global growth; rising inflation; higher interest rates; peaking corporate earnings and, of course, a potential trade war.

These issues are real, but we also think equity market action is typical of an aging economic cycle. We believe sentiment is worse than reality. An escalating trade war could significantly slow global growth. A related risk is the degree to which corporate earnings growth slows, both as a result of these fears and fundamental declines associated with the aging economic cycle. But we do not see imminent risks of a recession or an end to the equity bull market—at least not over the next 12 months.

Volatility may remain elevated, but stock prices should rise over the next year

In any case, approximately half of the companies in the S&P 500 have experienced drops of 20% or more from their 52-week highs, and the list of worries we cited above could mean markets will remain messy and uneven.1 The initial catalyst for the current correction (a spike in bond yields) has faded, yet markets have been unable to find a floor.

At this point, we encourage investors to be patient and await improvements in sentiment. Markets may need to see firmer U.S. economic indicators or evidence of less political volatility in order to stabilize, but we believe we are near the end of the current corrective action.

The bottom line: economic and corporate fundamentals remain solid and earnings growth has been particularly strong in 2018 while prices have fallen. That means valuations are more attractive now than in January.

Over the next year, we expect a modest cooling in economic growth and a moderate upturn in inflation. We also think earnings are likely to come under more pressure than the consensus expects. That’s not a great recipe for equity market performance. But it also does not suggest the end of the bull market. We believe volatility will remain relatively elevated, while evidence points to higher equity prices over the coming year.

 


 

Brian Amidei is Coachella Valley's only Barron's Magazine Top 1,000 Advisor in 2013 and 2014!

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017 Five Star Wealth Managers!

Disclosures:

Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client?s experience or of the Firm?s future performance.  Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Barron's Disclosure:

The Barron's award is is based on the recognized adviser's assets under management, contribution to the firm's revenues and profits, and quality of practice.  Investment performance is not an explicit criteria.  Additional information about this award is available at http://online.barrons.com/report/top-financial-advisors. 

Five Star Professional Disclosure:

The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided.  Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf

Fortem Financial 2016. All rights reserved. 

Data Sources:  News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations.  Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. 

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.  The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates.  Past performance is no guarantee of future results.  All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.  Forward looking statements are based on current expectations and assumptions, the economy, and future conditions.  As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict.  Actual results may differ materially from the anticipated outcomes.  Carefully consider investment objectives, risk factors and charges and expenses before investing.  Fortem Financial is a registered investment adviser with the SEC.  Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks.  The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy.  The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange.  The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks.  The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide.  Market indices listed are unmanaged and are not available for direct investment.

Markets are digesting earnings and economic news and volatility is still at hand

With market volatility like we saw last week, we know everyone is wondering if this is the beginning of a prolonged sell off or even an economic recession. Here are a few key observations we see that lead us to believe this is a pause, and that the stock market is likely to reach higher market highs in the near future.

A few bullish points you may find interesting

  1. While the cost of credit is getting more expensive, the supply of credit is plentiful and demand is robust. Bear markets typically don’t start when the credit market is healthy. 
  2. The yield curve is not inverted. Most bear markets start when the curve is inverted. Also, some of the biggest percentage gains have been logged just as the curve goes from flattening to inversion. We have yet to see this type of “blow off top.” 
  3. Bull markets end in euphoria.  I would argue institutional and retail investors alike are actually more pessimistic, which means this bull market is primed to grow. (1)

Q&A Addressing recent market volatility

  • What is the proximate cause of the current correction?  - The most proximate cause of recent market weakness has been the now obvious commitment to “normalize” interest rates. The “new normal” over the last 9 years is dead and the Trump Administration’s economic policies have killed it. To the extent to which we believe stock prices are ultimately a function of earnings and interest rates, we see the current correction as an opportunity to buy good cyclical companies at attractive prices. 
  • Are 2019 earnings at risk?  – Though Earnings Per Share growth rates will level off next year as the anniversary effect rolls the tax cut into its fifth quarter. We continue to be focused on Earnings Before Interest & Taxes (EBIT) earnings growth rates with 2018 EBIT currently running at +11.8% over 2017, which is very healthy at this stage of business cycle. 
  • Tactically, are we close to putting a low? - The response from last Thursday’s rally was unconvincing – breadth was fair, but not spectacular; nor did volume skews suggest any panicked demand for stocks. All things considered, we doubt we’re through this quite yet and wouldn’t be surprised if more drama is still in front of us. Seasonality supports a postelection rally, but it’s the character of any advance (e.g., does participation broaden out, does leadership reclaim a pro-risk bias, etc.) that will be key to the strategic call. (1)

 
Last week "in volatile trading, the sell side sentiment pushed all of the major indices lower. Companies, though, continue to outperform analysts’ projections; of the 48% of companies in the S&P 500® Index which have already reported results, the 22.5% growth in earnings is on track as the third best performing quarter since 2010.  For the week, the S&P 500® fell 3.94%; the Nasdaq and the Russell 2000® Index both lost 3.78%, and the Dow Jones Industrial Average lost 2.97%.  The continued selloff in Technology stocks brought the sector’s decline (11.9%) into correction territory.  Amazon and Alphabet reported earnings that were 86% and 25%, respectively, higher than earnings expectations; but revenues fell short of analysts’ estimates.  Netflix, now down almost 30% from its twelve-month high, continues as the worst performer amid concerns that the company’s high debt level will impact growth as interest rates rise.  Microsoft and Intel reported strong earnings and revenues yet their results were overshadowed by market sentiment; that is, the “law of large numbers” is impacting tech stocks as investors continue to expect dramatic growth despite the challenges for these megacap companies to “moving the needle.”  Looking ahead, more reasonable growth valuations will require a recalibration to more realistic revenue targets.

Economic data continue to support the growth narrative; the first estimate of third quarter GDP growth, 3.5%, was slightly higher than projections; consumer spending rose 4% to the highest levels since 2014.  Investors seem to believe that the combination of low unemployment, tariffs, a stronger dollar, and rising material costs may signal that the markets have reached ‘peak earnings’; higher costs will dampen revenue and earnings growth.  This “broad brush” approach assumes that all market sectors move in sync; it fails to recognize that sectors are at different stages in their growth cycles.  A marine transportation company reported earnings today; management made a strong case that they are only now in the early stages of recovery from the energy downturn.  Barge rates and profit margins are still well below normal; utilization rates are only now recovering to the mid 90% range.  An automotive company reported yesterday that the recent decline in new car sales spurs their used car business; their parts and service areas remain a major segment of their business.  In addition, their truck leasing division reports increasing demand to satisfy the emerging 1-to-2 day delivery standard of e-commerce.

The selloff may reflect both the absence of progress on the geopolitical front and the disappointing Technology sector revenue reports.  Tech stocks have been the ‘easy trade’ for the past several years; the sector’s market advance overshadowed corrections and bear markets in other sectors.  Historically, investors often extrapolate an investment thesis until expectations become unreasonable.  Now, as investors evaluate corporate earnings and commentary, they will likely begin searching for overlooked and undervalued companies.  Most analysts believe that, for many companies, the selling has been overdone; active investors will likely await signs of ‘seller exhaustion’ before establishing new opportunities." (2)

Source: (1) Strategas and (2) Pacific Global Investment Management Company

Chart reflects price changes, not total return.  Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.


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Brian Amidei is Coachella Valley's only Barron's Magazine Top 1,000 Advisor in 2013 and 2014!

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017 Five Star Wealth Managers!

Disclosures:

Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client?s experience or of the Firm?s future performance.  Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Barron's Disclosure:

The Barron's award is is based on the recognized adviser's assets under management, contribution to the firm's revenues and profits, and quality of practice.  Investment performance is not an explicit criteria.  Additional information about this award is available at http://online.barrons.com/report/top-financial-advisors. 

Five Star Professional Disclosure:

The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided.  Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf

Fortem Financial 2016. All rights reserved. 

Data Sources:  News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations.  Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. 

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.  The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates.  Past performance is no guarantee of future results.  All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.  Forward looking statements are based on current expectations and assumptions, the economy, and future conditions.  As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict.  Actual results may differ materially from the anticipated outcomes.  Carefully consider investment objectives, risk factors and charges and expenses before investing.  Fortem Financial is a registered investment adviser with the SEC.  Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks.  The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy.  The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange.  The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks.  The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide.  Market indices listed are unmanaged and are not available for direct investment.

Commentary on Today's Sell Off

After a big reversal from yesterday’s down opening, stocks recovered quite nicely to close modestly lower.  

"Stocks ended sharply lower today, as losses accelerated into the close and put both the Dow and the S&P 500 into the red for the year, and the Nasdaq into correction territory.

Upbeat results from Boeing Co. were credited with briefly pushing the Dow higher in early morning trading, before investors took an increasingly defensive stance, fleeing for the relative safety of utilities and consumer non-durable shares."1 

After the market closed today, Tesla and Microsoft announced earnings that dramatically beat estimates and have sent both stocks up nicely in aftermarket trading. 

How are major benchmarks faring?

The equity markets sold off rapidly as they breached technical support levels in the last two hours of trading, which triggered electronic trading, exacerbating the market sell off.  

"The Dow Jones Industrial Average DJIA, fell 606.11 points, or 2.4%, to 24,583.42, while The S&P 500 SPX, dropped 84.59 points, or 3.1%, to 2,656.10, its sixth straight losing session. Meanwhile, the Nasdaq Composite Index COMP, shed 329.14 points, or 4.4%, to 7108.4, a performance that put the index more than 10% below its Aug. 29 all-time high, meeting the widely used definition of a market correction. The loss also marked the worst day for the Nasdaq since Aug. 18, 2011."1

October is shaping up to be a brutal month for equities, with the S&P falling 8.9% month-to-date, the Dow down 7.1%, and the Nasdaq falling 11.7% since the start of the month. 

Wednesday’s session also sent the Dow into losing territory for the year, with the index down 0.6% in 2018. This is the fifth consecutive week of losses for the Dow, making this its longest string of weekly losses since July, 11 2008, when it fell for six straight weeks.

The S&P 500 also ended the trading day in the red, down 0.7% year-to-date."1

What drove the market? 

Historically September and October are volatile months.  With the midterm elections less than two weeks away, concerns about the Fed's position on interest rates, concerns over the slowing global economic expansion, the slowing in China (which many believe has been understated), concerns over Italy's budget proposal, Britain's efforts to exit the Eurozone, and fear about corporate earnings (and perhaps more importantly, earnings forecasts), investor sentiment weakened today. 

"Wall Street traders have been wading through this week’s deluge of quarterly corporate results, including several mega-cap names but have found few reasons to buy in an environment that promises higher interest rates and borrowing costs, as the Federal Reserve has indicated it will continue to tighten monetary policy by year’s end. On top of that, earnings growth shows signs of possibly stalling out due to tariff spats between the U.S. and China."1 Even though 90% of companies that have reported have met or surpassed their earnings, the market is forward looking and trade is an unsettled issue; both investors and markets dislike uncertainty.   

On the bright side, "the Fed’s Beige Book, a collection of anecdotes on the economy, showed that wages and prices are rising in the central bank’s 12 districts but not faster than a “modest to moderate” pace and that the economy expanded at a “modest to moderate” pace."1 The current economic data indicates the Fed should not be concerned about inflation. So the question is, “Why is the Fed continuing to tighten if there are no real signs of inflation?"  We believe the Fed is focused on tightening because the data indicates that in order for them to stimulate economic growth through monetary policy (i.e. cutting interest rates), they need to be able to cut the interested by 3% to 4%. The problem is that the Fed Funds rate is not yet at 3%." 

What are analysts saying?

"Alec Young, Managing Director of Global Markets Research, FTSE Russell laid blame for the day’s sell off on macroeconomic headwinds. “Chief among them is a Fed that seems determined to continue steady rate increases despite growing signs of weakening global growth as China struggles to stabilize its economy and markets all while US trade tariffs loom,” he wrote in a research note.1

“Meanwhile simmering US inflation makes it harder for the Fed to pause, making it more likely interest rates will continue to move up, potentially slowing growth next year. Lastly, Italy and the US elections both remain notable wild cards,” that are adding to investor unease, he argued."1

“We’ve had this massive shift in sentiment in recent months from ‘the market can do no wrong,’ to ‘the market can do no right,” said Amanda Agati, co-chief investment strategist at PNC Financial Services Group. She pointed to Tuesday’s steep selloff of Caterpillar CAT, -5.58%  stock as evidence that investors are more eager to sell on bad news than to buy on good news."

“It’s definitely becoming a stock picker’s market,” she said.“Companies that beat expectations and raise guidance get rewarded. Companies that miss or even report in line with expectations get pummeled.”

The triple overhang of trade uncertainty, Fed rate increases, and slowing global growth are “causing investors to jump on any bad news, or even just mediocre news, to punish stocks,” Lance James, senior portfolio manager at RBC Global Asset Management, told MarketWatch.1 

What do we think?

Our thoughts are that a day like today indicates the equity markets may be very close to being oversold.  The heavy technical selling in the final few hours today may have shown some capitulation from investors in index (passive invested funds) and less sophisticated investors.  Most analysts, if asked about their fear of a recession, would tell you they believe we should be o.k. for the next 18 to 24 months.  As we progress through earnings season, and continue to see positive economic data reported, we believe the market will again focus on fundamentals; in our view the current data does not warrant the selloff we have seen in the equity markets this week.

At times like these, it is very important not to fall prey to emotions, but  to stick to your long-term financial plan.  Please feel free to call or email us with any questions or concerns you may have or if you would like us to review your financial plan.

 


 

Brian Amidei is Coachella Valley's only Barron's Magazine Top 1,000 Advisor in 2013 and 2014!

Brian Amidei, along with Partners Joseph Romano and Brett D'Orlando have also been named *2014, 2015, 2016, 2017 Five Star Wealth Managers!

Disclosures:

Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Fortem is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of Fortem or its representatives by any of its clients. Rankings published by magazines and others are generally based on information prepared and/or submitted by the recognized advisor. Awards may not be indicative of one client?s experience or of the Firm?s future performance.  Neither Fortem nor the recognized advisor has paid a fee for inclusion on a list, nor purchased any additional material from the award provider. The criteria for each award is listed below:

Barron's Disclosure:

The Barron's award is is based on the recognized adviser's assets under management, contribution to the firm's revenues and profits, and quality of practice.  Investment performance is not an explicit criteria.  Additional information about this award is available at http://online.barrons.com/report/top-financial-advisors. 

Five Star Professional Disclosure:

The Five Star Wealth Manager award is based on 10 eligibility and evaluation criteria: 1) Credentialed as an investment advisory representative (IAR) or a registered investment advisor; 2) Actively employed as a credentialed professional in the financial services industry for a minimum of five years; 3) Favorable regulatory and complaint history review; 4) Fulfilled their firm review based on internal firm standards; 5) Accepting new clients; 6) One-year client retention rate; 7) Five-year client retention rate; 8) Non-institutionalized discretionary and/or non-discretionary client assets administered; 9) Number of client households served; and 10) Educational and professional designations. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or the magazine. The award methodology does not evaluate the quality of services provided.  Additional information about this award is available at: fivestarprofessional.com/2016FiveStarWealthManagerMethodology.pdf

Fortem Financial 2016. All rights reserved. 

Data Sources:  News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations.  Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).  All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. 

Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice.  The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates.  Past performance is no guarantee of future results.  All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.  Forward looking statements are based on current expectations and assumptions, the economy, and future conditions.  As such, forward-looking statements are subject to inherent uncertainty, risks, and changes in circumstance that are difficult to predict.  Actual results may differ materially from the anticipated outcomes.  Carefully consider investment objectives, risk factors and charges and expenses before investing.  Fortem Financial is a registered investment adviser with the SEC.  Advisory services are offered through Fortem Financial.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks.  The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy.  The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange.  The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks.  The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide.  Market indices listed are unmanaged and are not available for direct investment.

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We don’t share non-public personal information about your creditworthiness with our affiliates for their everyday business purposes. We don’t share your non-public personal information with our affiliates to market to you. We don’t share your non-public personal information with non-affiliates to market to you. We also don’t share your non-public personal information for joint marketing with other financial companies. State laws and individual companies may give you additional rights to limit sharing.

We share non-public personal information with our parent company affiliate, Focus Financial Partners, LLC, for its internal and external auditing purposes. We also share your non-public personal information with a non-affiliate for the purpose of aggregating it and providing summary information based on this data to our parent company, Focus Financial Partners, LLC.

To protect your non-public personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

Our policy about obtaining and disclosing non-public personal information may change from time to time. We will provide you notice of any material change to this policy before we implement the change.

If you have questions please call us at 760-206-8500 or go to our website at www.fortemfin.com.

IMPORTANT CONSUMER DISCLOSURE

Fortem Financial, LLC ("Fortem Financial" or the "Firm") is a federally registered investment adviser with offices in California. Fortem Financial and its representatives are in compliance with the current registration and notice filing requirements imposed upon federally registered investment advisers by those states in which Fortem Financial maintains clients. Fortem Financial may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements.

This website is limited to the dissemination of general information regarding the Firm's investment advisory services offered to U.S. residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of Fortem Financial' website on the Internet should not be construed by any consumer and/or prospective client as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment, tax or legal advice. Furthermore, the information resulting from the use of any tools or other information on this website should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Fortem Financial. Any subsequent direct communication from Fortem Financial with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. Fortem Financial does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to this website or incorporated herein, and takes no responsibility therefore. All such information is provided for convenience purposes only and all users thereof should be guided accordingly.

All statements and opinions included on this website are subject to change as economic and market conditions dictate, and do not necessarily represent the views of Fortem Financial or any of their respective affiliates. Past performance may not be indicative of future results and there can be no assurance that any views, outlooks, projections or forward-looking statements will come to pass. Investing involves risk, including the potential loss of principal, and the profitability of any particular investment strategy or product cannot be guaranteed.

Any rating referenced herein may not be representative of any one client's experience. Further, the Firm's receipt of any rating is not indicative of the Firm's future performance. The Charles E. Merrill Circle of Excellence award is granted by Merrill Lynch for outstanding client service and satisfaction. The award is granted based on annual criteria established by Merrill Lynch for its top decile advisors. The Barron's Top 1,200 Financial Advisors rating of the top financial advisors in the United States is based on data provided by participating firms. The following factors are included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Investment performance is not an explicit component. The Five Star Professional award is granted by Five Star Professional and recognizes service professionals who provide quality services to their clients based on data provided by participating firms. The award is granted based on the following ten objective eligibility and evaluation criteria: credentialed as an investment advisory representative (IAR) or a registered investment advisor; actively employed as a credentialed professional in the financial services industry for a minimum of five years; favorable regulatory and complaint history review; fulfilled their firm review based on internal firm standards; accepting new clients; one-year client retention rate; five-year client retention rate; non-institutionalized discretionary and/or non-discretionary client assets administered; number of client households served; and educational and professional designations. Feedback from consumer surveys will augment a regulatory history review. Firms have the option to provide input on award candidates from their firm, regardless of the nomination source. The Palm Springs Life's "40 Under 40" Rising Young Professionals to Watch in the Coachella Valley is based upon nominations from the local business community and selected by the staff of Palm Springs Life.

For information pertaining to the registration status of Fortem Financial, please refer to the Investment Adviser Public Disclosure website, operated by the U.S. Securities and Exchange Commission, at www.adviserinfo.sec.gov., which contains the most recent versions of the Firm's Form ADV disclosure documents.

ACCESS TO THIS WEBSITE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS WEBSITE OR ANY THIRD PARTY WEBSITE REFERENCED HEREIN.