March 2019 Economic Update

Hello, I’m Derek Merkler, fiduciary financial advisor with an economic update for March 2019.

As I do each month, I’ll discuss some of the major headlines that influenced the markets in February and some thoughts on how these developments influence investors.

After a strong January performance, markets were up again in February. Despite stumbling in the last three trading days of the month, the Dow Jones Industrials gained 3.7%, the strongest performance of all three domestic indices.[i]

This performance comes against a backdrop of mixed economic and international signals.

During the month, trade tension with China continued to ease, as did concerns about the Federal Reserve’s monetary policy.[ii]Congress and President Trump also avoided another partial government closure during February. The new bill will fund the government through the end of September.[iii]

Economic data seemed just as split between positive and negative updates.

We learned that home sales fell 1.2% in January. This was the lowest level since 2015 and 8.5% below where it was this time last year.[iv]

In addition, the latest data indicates that December’s retail sales were lower than expected. The report detailed a 1.2% decline– the largest drop since 2009. The next reading may provide more insight into the true health of retail sales. December’s report could be part of a trend or simply a symptom of the month’s historic market declines and ongoing government shutdown.[v]We expect to learn which direction we’re heading with the data as more details unfold over the next few months.

In positive news, we received the 1streading of 4thquarter GDP –and the results exceeded expectations. The consensus was that the economy had grown about 2.2%. However, initial data shows that it actually was up 2.6%. The report indicated that business investment was also higher than expected. Plus, consumer spending hit solid levels, despite December’s retail sales decline.[vi]

As March continues, it will be interesting to see if markets remain fairly steady as they have so far or if they will start to move in one direction. As nice as it is to see the value of our accounts increase in the short-term, don’t forget that lower prices today mean that we can buy more shares at better prices, creating greater benefits for our future selves.

That’s it for this month’s update.

If you have any questions about what I’ve discussed in this video or if you are interested in working with me to develop your financial plan, send me a message using the information in the credits.  See you next month!


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