The Week in Review: Market Commentary from Cabana’s CEO – May 20, 2019

Below is a snapshot of last week’s market performance and what to watch in the weeks ahead from Chadd Mason, Cabana CEO and co-founder.

Domestic and International equity markets continue to digest the impact of the U.S. and Chinese tariffs on GDP across the world. After dropping more than 5% during the first few weeks of May, there was a three-day bounce at the beginning of last week. Hope of a quick rebound was promptly dashed on Friday when stocks gave back almost all of those gains. Consumer discretionary stocks and technology have seen the worst of it. This is logical given those sectors’ exposure to U.S./China trade. If all the proposed tariffs from both sides go into effect, it will be interesting to see where the supply chain moves. Rumors of shifting manufacturing away from China to Vietnam and other Asian countries continue to abound. President Trump suggests that it will return to the U.S. I commented on this some last year and I will state it again – it is hard to believe that workers in the U.S. will be excited about minimum wage manufacturing jobs. If that were the case, I don’t believe those jobs would have left in the first place. Moreover, our workers don't want to perform the minimum wage jobs that still remain in this country. That is a big part of why we have the influx of immigrants from Mexico and Central America. There is a huge supply of work that we don't want to do. Maybe the Trump Administration will solve several problems at once by allowing all the illegal immigrants into the country and assign them the jobs previously performed in China. I am only slightly kidding…

Markets are also on edge due to threats of military confrontation with Iran. This all stems from the nuclear arms pact previously reached between Iran and the U.S., as well as other countries. Iran is allegedly not complying and continues to enrich uranium. As we have all seen, becoming actively involved in conflict in the Middle East is a slippery slope. Let's hope that cooler heads prevail and a diplomatic resolution is reached.

Some money has moved into safe haven assets like Treasuries, but the U.S. dollar has been the biggest winner so far. We are not seeing buying in gold, which would be expected if a real crisis was imminent. Additionally, all major U.S. equity indexes remain above their 200-day moving average. This important technical line in the sand acts as support in a bull market and as resistance in a bear market. That is why it was so important when we broke back above it after the plunge during the fourth quarter of 2018. With all these circling problems, we will watch closely to see whether we can stay above it. Some caution here is likely warranted.

A PDF of this commentary is available at the following link:


This material is prepared by Cabana, LLC(d/b/a “Cabana Asset Management” & “Cabana Retirement Solutions”) and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.

This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.

Cabana LLC, dba Cabana Asset Management (“Cabana”), is an SEC registered investment adviser with offices in Fayetteville, AR and Plano, TX The firm only transacts business in states where it is properly registered or is exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. Additional information regarding Cabana, including its fees, can be found in Cabana’s Form ADV, Part 2. A copy of which is available upon request or online at

Cabana did not pay a fee to participate in the ranking and survey and is not affiliated with Financial Advisor Magazine. RIAs were ranked based on percentage growth in year-end 2017 AUM over year-end 2016 AUM with a minimum AUM of $250 million, assets per client, and growth in percentage assets per client. Visit information regarding the ranking.