Today marks the fiftieth anniversary of one of the most remarkable achievements in our nation’s history. In 1969 Neil Armstrong and Edwin “Buzz” Aldrin, landed their spacecraft on the surface of the moon.  In commemoration of this day, there are a number of events and celebrations across the nation. CNN has also released a new documentary using never-before-seen footage, which will air tonight at 9:00 ET.  While I haven’t seen this one yet, our family watched HBO’s documentary “From the Earth to the Moon” earlier this year and really enjoyed it.  If you want to check it out, HBO is making it available for streaming this month as well.  This incredible achievement is worthy of reflection, both at the incredible ingenuity and creativity required to reach the moon, but even more so the creativity of our God in creation.

Turning towards markets, all eyes are on the Fed and the prospect for reduced interest rates.  While this noise is apt to be positive for stocks in the short run, a compelling story for the longer term is difficult to put together.  First, the Fed can only directly affect short-term rates.   Second, there is not much room for rates to fall from today’s historically low levels.  Third, Fed actions only impact long-term rates and borrowing costs to the extent they change market expectations. Finally, the reason for a rate cut is an economic slowdown – generally not positive for stocks.

If you want to see evidence of slowing global, simply look at this chart showing the global purchasing managers index for manufacturing.

There are two simple ways to read the chart:

1. If you look at the color, it’s like a stoplight, green is good, red is bad, yellow/orange is somewhere in the middle. If you look back to 2017 and 2018, the graph looks like the green of a golf course.  However, if you look at 2019 the colors reflect more of autumn, more yellow and oranges.
2. You can also look at the numbers on the right. Any number over 50 signifies expansion while numbers below 50 signify contraction.  The US is slightly above 50 but developed and emerging markets are slightly below 50.  Looking at some of the countries specifically, you see that major producers like Germany & China among others are flashing orange to red.

The obvious concern is that manufacturers are slowing down production as concern and uncertainty grows about the unresolved trade conflicts.  Lower manufacturing can bleed into confidence, employment and other areas that could negatively impact global economies.

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