Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Tuesday, March 05, 2019

Annual CFA Forecast Dinner

The annual CFA Forecast Dinner is always a stellar event. Great food. Wonderful dinner companions. And a panel of financial experts ready to expound on the topics of the day. The CFA Society of Mississippi serves as host for the event that is held at the Jackson Country Club, which is a chance for us to fete our clients while also spending time at the feet of experts who love talking finance and economics.

Selena Swartzfager, Executive Director of the MississippiCouncil on Economic Education, served as moderator. She took the opportunity to explain the mission of her organization—financial literacy for Mississippi students. The marriage of this group to our society seems a natural.

We had four outside panelists:  1) Andrew Patterson, senior economist at Vanguard, 2) Alex Dryden, global market strategist at J.P. Morgan, 3) Chad McKeithen, managing director or Fixed Income Strategies and Research, and 4) Dr. Ormala Krishnan, head of international and emerging markets for Mondrian Investment Partners.

What did we learn?

While US markets are still healthy, the challenge this year is in emerging markets. The slowdown in China, along with the trade tensions, will be a drag on international markets. This may bleed into our markets, as well.

All agreed that Federal Reserve Chair, Jerome Powell, had done a good job in his first year. Investors were spooked by some of the aggressive comments out of the Fed, but Powell backtracked and indicated moves would be gradual. The Fed will continue to unwind its balance sheet, but they are doing so in a strong market. Dryden likened it to removing the training wheels off a bicycle. You only do it when you think your kid CAN ride on his own, but you expect some wobbling when the supports are removed. So it will be with our markets. Expect volatility.

Dryden (the Brit) was the hands-on favorite for the evening. He was quite entertaining. He pooh-poohed the trade war. What trade war? He called it more of a skirmish. I’m not sure I agree with this assessment, especially since investors appear to be keeping an eye on negotiations. Of course, everything sounds better with a British accent!

What were their forecasts?

Most think the S&P 500 has gained all the ground it can already, with expectations of minor additional gains or a remaining flat market for the year. One panelist even expects the S&P 500 to be less at the end of the year. And most think increases in the yield of the 10 year Treasury will be modest, at 3% or less.

I hope you’ll be able to join us next year, when we put these prognostications to the test!