Fortis Wealth Management

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July 2019
Market Update
(all values as of 04.30.2024)

Stock Indices:

Dow Jones 37,815
S&P 500 5,035
Nasdaq 15,657

Bond Sector Yields:

2 Yr Treasury 5.04%
10 Yr Treasury 4.69%
10 Yr Municipal 2.80%
High Yield 7.99%

YTD Market Returns:

Dow Jones 0.34%
S&P 500 5.57%
Nasdaq 4.31%
MSCI-Europe 2.05%
MSCI-Pacific 1.82%
MSCI-Emg Mkt 2.17%
US Agg Bond 0.50%
US Corp Bond 0.56%
US Gov’t Bond 0.48%

Commodity Prices:

Gold 2,297
Silver 26.58
Oil (WTI) 81.13


Dollar / Euro 1.07
Dollar / Pound 1.25
Yen / Dollar 156.66
Canadian /Dollar 0.79

Macro Overview

Stocks and bonds rose in June as lower rates drove equities higher and international diplomatic tensions elevated bond prices. Indications by the Fed that there may be a rate cut later in the year helped sustain stock prices near record levels.

The G20 met in Osaka, Japan, at the end of June where trade tensions between the U.S. and China were on the forefront of global concerns. The U.S. and China reached a temporary truce over the trade conflict as the leaders from both countries agreed to re-start negotiations that had fallen apart earlier. The de-escalation of trade tensions between the two countries led to heightened optimism surrounding global economic growth. Central banks from around the world will assess as to how much a trade truce or settlement might impact other economies globally.

The 10-year Treasury bond yield fell to 2.00% at the end of June, with several bond analysts expecting it to fall below the psychologically significant 2.00% level. Yields dropped lower in Europe, with Austria issuing 100-year government bonds at a yield of 1.17%. Highly rated, positive-yielding government bonds are in enormous demand globally as investors seek income from viable and reliable sources.

Mortgage rates dropped again in June to 3.73% on a 30-year fixed conforming loan, helping to sustain the housing market. The low-rate environment has also fostered an inexpensive source of capital for U.S. and international companies, allowing for expansion and hiring as demand reappears.

Commodity prices including oil, gold, and iron ore all elevated in the first half of 2019, with most of the gains occurring in June. Falling inventories of oil and iron ore have pushed prices higher as demand has notably remained constant.

The U.S. Bureau of Economic Analysis found that the current economic expansion is the longest on record since 1945. The economic expansion that began in June 2009, following the depths of the financial crisis, has now lasted 121 months as of the end of June. The second longest economic expansion lasted 120 months, running from March 1992 until March 2001 when the dot-com bubble burst. There have been 12 economic expansion periods since the end of World War II, each lasting 12 months or longer. (Sources: BEA, Freddie Mac, U.S.Treasury,, Bloomberg, Federal Reserve)

The 10-year Treasury bond dropped below 2% for the first time since November 2016

Stocks Rebound In June – Equity Overview

Stocks and bonds registered the first half of the year with formidable gains propelled by an expected rate cut by the Fed later in the year. It was the best first half of the year since 1997 for equities, with the Dow Jones Industrial Index, S&P 500 Index, and Nasdaq all nearing new highs.

Equities were also driven higher in June by a relief in trade tensions between the U.S. and China and the expectation that the Fed will eventually cut rates sometime this year. Historically, a low-rate environment is favorable for equities in the form of inexpensive capital for expansion and loans.

The rebound in stock prices in the first half of 2019 from the turmoil that hindered markets in December 2018 has been one of the strongest rebounds in decades.

The Federal Reserve gave large U.S. banks the approval to repurchase their own shares and lift dividends, as part of the Comprehensive Capital Analysis and Review process set in place by the Fed. Large money center banks as well as smaller regional banks were restricted from buying back their own shares as well as increasing dividends in order to fortify bank balance sheets following the financial crisis. (Sources: Federal Reserve, Dow Jones, S&P, Bloomberg, Reuters)

What Expenses Seniors Have After Retirement – Consumer Demographics

Demographics play a significant role in how much we spend and how we spend it. Spending is impacted by age, given that needs and life-quality considerations change and evolve as consumers grow older. The challenge for many retirees now is the fact that we are all living longer, with a U.S. life expectancy of 78.7 years in 2018. As more Americans reach their 80s and 90s, medical and assisted living expenses become a much larger component of personal budgeting. Housing, transportation and food are the three largest expenses incurred by all age groups. As consumers move from their late 20s into their 30s, they earn more money and families start to grow. Expenditures on transportation, health care and entertainment become prevalent as households grow with children. Education is also another significant expense for many younger families, and the average cost of higher education tuitions has steadily increased over the years.

As we earn more, we also tend to save more in our 30s, 40s, and 50s by contributing to IRAs and 401k plans. At 70.5 years of age, Required Minimum Distributions (RMDs) kick in, imposing a tax on retirement savings, which tend to decrease as withdrawals increase each year. The biggest challenge most retirees have is trying to replace lost employment income with retirement savings and Social Security. A useful rule of thumb is that one will need to replace anywhere from 70% to 90% of employed income in order to maintain the same standard of living in retirement.

The Bureau of Labor Statistics has identified the largest expenses that seniors have in retirement. Expenses such as housing, food, and transportation are based on what a retiree spends on average in various essential categories nationwide. Housing, transportation and health care are the three largest expenses for retirees as well as all other age groups. (Sources: Social Security Admin., U.S. Census)

A record 257 million Americans will travel by plane this summer

The Country’s Busiest Airports – Travel & Leisure

The summer months tend to see the heaviest travel of airline passengers across the country, with summer traditionally the most profitable season for airlines when flights are full due to increased demand. It is expected that a record 257 million Americans will travel by plane this summer.

As both business and leisure travel have been increasing domestically and internationally, U.S. airports have seen an increase in passenger traffic. Some U.S. airports serve as international hubs, with flights originating in foreign countries worldwide and landing there directly from a foreign destination. With some of the most popular travel destinations in the world, American airports cater to tourists traveling both domestically and internationally. Not only is the Atlanta International Airport the busiest airport in the country, it is also the busiest passenger airport in the world, with Beijing a close second. Atlanta is also geographically attractive, located only a two-hour flight away from 80 percent of the U.S. population.

Various factors affect the accessibility of airports and how much traffic they generate. Denver International Airport is located in a rural area of Denver, allowing vast amounts of rail and road traffic access to the airport. Chicago’s O’Hare and New York’s JKF are both situated directly within the city, and are accessible by millions of visitors. Geographic characteristics and access allow some airports to handle more air traffic than others.

An increase in passenger volume has inundated airports nationwide with expansion projects, from New York’s Kennedy to LAX in Los Angeles. A shortage of air traffic controllers and aircraft maintenance staff have been the primary obstacles to growth for airlines and airports this year. (Sources: Dept. of Transportation, FAA)

Yields Drop Further In June – Fixed Income Update

The 10-year Treasury bond yield dropped below 2% for the first time since November 2016. The 10-year Treasury continues to trade at a lower yield than the 3-month Treasury bill, signaling an inversion, which occurs when shorter-term bonds yield more than longer-term bonds. The Federal Reserve communicated that the labor market and rising wages for lower-income workers as positive for the U.S. economy, but noted that inflation is still below expectations. The Fed’s concern is slowing global growth in other parts of the world. Such concerns may lead to dismal expansion, with an eventual need to reduce rates to help prop up economic growth. (Sources: U.S. Treasury, Federal Reserve)


In 2016 7,400 adults aged 65+ were killed from automobile accidents

IRS Scams – Consumer Awareness

Identity theft and stolen funds are becoming a growing risk, as thieves have devised clever methods of mimicking IRS communications. Various government entities have identified some of the most prevalent scams, which are described here.

Refund Scam: Fraudulent emails, appearing to come from the IRS, notify you that you are eligible for a tax refund, but need to provide sensitive bank details in order to receive the funds.

Fund Scam: Inherited Funds, Lottery Winnings, & Cash Consignment Scams. 

Email Scam: Emails claiming to come from the U.S. Department of Treasury, notify you that you will receive millions of dollars if you follow the instructions in the email. 

SS Scam: An identity thief could use your social security number to fraudulently file a tax return and claim a refund.  You could be completely unaware that your identity has been stolen until your return is rejected for e-filing or you get a letter from the IRS.

Suspicious IRS Items: You receive a fraudulent notice from the IRS stating that more than one return was filed in your name for the year.

You have a balance due, refund offset, or initiation of collection action for a year when you did not file. 

IRS records indicate that you received wages from an employer you didn’t work for.

In the case of fraud, you should respond immediately to the name and phone number printed on the IRS notice or letter.  You should also complete Form 14039, Identity Theft Affidavit. (Source:,,

When It’s Time To Stop Driving – Retirement Facts

As senior drivers drive well into their 70s, 80s, and even 90s, the need for safety awareness and heightened caution is critical. The Centers for Disease Control and Prevention found that all adults age differently, with some losing essential motor skills sooner than others. Losing one’s privilege to drive can affect an adult’s sense of dignity, including a loss of confidence, independence, self-respect, and control. While some seniors merely fail a driving test or medical exam that leads to the loss of their license, other seniors are asked or restricted from driving by family members. The most common physical ailments that affect senior drivers include slowing reflexes, deteriorating motor skills, and failing vision. Cognitive functioning, ability to reason and remember, and physical changes might affect some older adults’ driving abilities. Medically, it is important to review any medications, both prescription and over-the-counter, that are being taken and what their side affects might be. Good practices of senior drivers who have had no accidents include driving in good weather; driving during the day, and avoiding high speed routes.  (Sources: The Centers for Disease Control and Prevention, DOT)