Stocks Remain Resilient Despite Rising Volatility

Dear Friends,

Investors had to stomach a bout of turbulence in the second quarter as economic uncertainty increased compared to the first three months of 2019. Underlying fundamentals for the economy and the markets remain generally solid, and investors are now anticipating the first Fed rate cut in over a decade. An extended “truce” in the U.S.-China trade conflict— should further support the stock market. So, while we should prepare ourselves for more historically typical volatility, the outlook for markets remains generally positive as we begin the second half of the year.

In sharp contrast to the quiet, steady gains of the first quarter, stock market performance in the second quarter was one marked by extremes. April was a good month thanks to better-than-feared first quarter corporate earnings reports. Additionally, investors’ expectations for a 2019 Fed interest rate cut rose in April, which added fuel to the bullish fire. The S&P 500 ended April near new all-time highs.

Fears and volatility returned in the first week of May, however, as President Trump announced that he would be raising tariffs on $200 billion in Chinese goods from 10% to 25% following the collapse of U.S.-China trade negotiations. Furthermore, The President threatened to levy additional tariffs on the remaining $325 billion worth of Chinese products imported into the United States.

The news caught investors by surprise as reports previously implied a U.S.-China trade deal was close to being finalized. Stocks dropped sharply in reaction. Those of you who attended our webinar in early April would likely remember that one of our concerns were that investors were perhaps overly-confident about the prospect of a trade deal being reached, in spite of statements from trade officials that there was still much work to be done before either party would sign on the dotted line.

Further escalating the U.S.-China trade conflict was the decision by the Commerce Department to add the Chinese telecom company Huawei to its “Entity List,” which would effectively ban U.S. companies from doing business with the telecom giant. That development caused stocks to fall further.

The stock market was able to find support and rebound strongly in June. There was progress across the two main sources of volatility in the second quarter, trade and interest rate policy. First, at the June 19th meeting, the Federal Reserve reversed course from May and signaled an interest rate cut is likely in 2019, perhaps as early as July. Second, President Trump and Chinese President Xi Jinping agreed to meet at the recently held G20 meeting, and the result of the meeting was a trade “truce” of no new tariffs while trade negotiations resume.

Third Quarter Market Outlook

The markets were impressively resilient in the second quarter and registered gains despite deterioration in global economic activity and renewed uncertainty with U.S.-China trade. Our years of experience have taught us not to become complacent just because markets have been resilient. We think that’s again appropriate as we start the second half of the year.

As we start the third quarter, we face macroeconomic uncertainty on multiple fronts.

First, the U.S.-China trade situation remains delicate, and until there is clarity, that lack of clarity will act as a headwind on economic growth and likely create periods of turbulence.

Second, global economic growth metrics underwhelmed in the second quarter. The impact on global stocks was muted by rising expectations of more stimulus from global central banks, including the Fed.

Third, there remain several unsettled geopolitical situations that must be monitored, including Brexit (the deadline is October 31st), North Korea (relations are still unsettled despite the recent Trump/Kim meeting) and Iran (the chances of a U.S.-Iran military conflict are as high as they’ve been in years).

Finally, while the Federal Reserve has signaled it will begin to reduce interest rates in the coming months, the situation remains very fluid, and if the Fed does not meet market expectations by cutting rates, that will cause short-term volatility. In our opinion, the market’s expectations of the Fed and the potential for disappointment appear to be the biggest potential risk facing the current market.

It remains unclear how, or when, these events will be resolved, and what those implications will be for markets. Yet as 2019 has shown us so far, uncertainty is not, by itself, enough to offset the still-strong fundamentals in the U.S. economy and corporate America.

As always, please call with any questions or concerns or to set up a time to review your current allocation. Thank you for your continued confidence and trust.


Don, Darren & Audra.

Beware of Telephone Impersonation Scams

Social Security and OIG Launch Campaign to Alert Public about Telephone Schemes

Please read the announcement below from the Social Security Administration (SSA) and its Office of the Inspector General (OIG) addressing a nationwide telephone impersonation scheme. 

About 2 weeks ago, I received a call from a man claiming to be a federal agent conducting an investigation involving my social security number. He gave his badge number and proceeded to ask me for information to “validate” my identity. When I declined, he proceeded to verbalize that he was providing my address to the local Sheriff with a warrant for my arrest if I refused to cooperate with his investigation. As a means to intimidate me and show he knew “things” about me, he gave my address and a few other details (which are actually public record details). I continued to decline and said I will address any questions the Sheriff has directly. He encouraged me to get a good attorney as I would be taking on the Federal government.

I am happy to report no harm came to me nor was I pursued by anyone. The SSA and OIG announcement confirms that federal organizations like Social Security, do not call consumers. And just because someone claims to be from somewhere, gives a badge number or knows general information about you, do not start giving details like your social security number, date of birth or other personal details. 

We have included the announcement from SSA and OIG below.


The Social Security Administration (SSA) and its Office of the Inspector General (OIG) launched a joint Public Service Announcement (PSA) campaign addressing a nationwide telephone impersonation scheme.

Social Security and the OIG continue to receive reports from across the country about fraudulent phone calls from people falsely claiming to be Social Security employees. Calls can even “spoof” Social Security’s national customer service number as the incoming number on the caller ID. The new PSAs will air on TV and radio stations across the country to alert the public to remain vigilant against potential fraud.

“We urge you to always be cautious and to avoid providing sensitive information such as your Social Security number or bank account information to unknown people over the phone or Internet,” said Nancy A. Berryhill, Acting Commissioner of Social Security. “If you receive a call and are not expecting one, you must be extra careful – you can always get the caller’s information, hang up, and contact the official phone number of the business or agency the caller claims to represent. Do not reveal personal data to a stranger who calls you.”

Social Security employees do occasionally contact people--generally those who have ongoing business with the agency--by telephone for business purposes. However, Social Security employees will never threaten a person or promise a Social Security benefit approval, or increase, in exchange for information. In those cases, the call is fraudulent, and people should not engage with the caller. If a person receives these calls, he or she should report the information to the OIG Fraud Hotline at 1-800-269-0271 or online at

“These calls appear to be happening across the country, so we appreciate SSA’s partnership in this national public outreach effort,” said Gail S. Ennis, the Inspector General for the Social Security Administration. “Our message to the public is simply this: If you or someone you know receives a questionable call claiming to be from SSA or the OIG, just hang up.”

The new PSA addressing the telephone impersonation scheme is available online at and below:

Economic Commentary March 2019

Imagine for a moment that on March 29, 2019 the US government installed a hard border between Connecticut and the rest of the USA. Maybe not a big deal for us living in Albany, but what if you commuted daily from Connecticut to NYC for work. What if you had a business in Connecticut that conducted a lot of work in New York and now there was a tariff on all of your work. Your business would no longer be competitive in New York and your business would likely fail. 


Last week I was in Northern Ireland as the British Parliament battled with Britain’s Prime Minister May regarding Brexit, which in effect would require a hard border between Northern Ireland as part of the United Kingdom (UK) and the Republic of Ireland which would remain part of the European Union (EU). Roughly 20% of imports to Britain flow through the Republic of Ireland. As you might expect, the consequences of Brexit have far reaching implications on the finances and daily life for people living in the Republic and in Northern Ireland. My colleagues in Northern Ireland who would align themselves with the Labour Party are generally opposed to Brexit.

Imagine with me for a moment that American laws, treaties and trade agreements were dictated by an alliance of countries including Mexico, Canada, Venezuela and Belize. The alliance would dictate immigration policies, trade policies, monetary policies, taxes and laws for the United States.  This is how my colleagues in London (predominantly Conservative Party members) feel about the EU. They are generally in favor of Brexit due to concerns about the instability of the European Union, and Britain’s loss of sovereignty as the EU imposes regulations on the UK. 

Visiting friends in both Northern Ireland and London over the past week gave me a glimpse of how raw and divided emotions and ideologies are on the issue of Brexit. I realize that the two scenarios that I have painted provide an over simplification of the Brexit issues, but since most Americans understand very little about Brexit, I feel it provides a good summary to start understanding the two sides. Americans, both citizens and congress are divided politically but not nearly as divided as voters and members of parliament are in the UK.  The consequences of America’s political division may seem overwhelming but the immediate consequences pale in comparison to the implications of Brexit in the UK.

March 29, 2019 is the deadline set for Brexit and so far the British Parliament has rejected twice deals which Prime Minister has negotiated with the EU.  If Parliament cannot agree on a deal with the EU  (highly unlikely), or get the EU to agree to a deadline extension (possible), or parliament and the EU agree to some other not yet determined solution, (unknown)  then Brexit will occur on March 29thand the UK will no longer be a member of the EU. The UK would revert to World Trade Organization rules on trade. There are 1.3 million British citizens in EU countries and 3.7 million Europeans in Britain – their rights to live and work would be unclear.

So what are the implications of the Brexit turmoil to US investors?

Two years ago, on June 15, 2016, I was in London the day before the initial Brexit vote. At that time, I had the ability to assess the sentiment and attitudes of UK citizens and their uncompromisable division. Nothing has really changed.  The day after the Brexit vote on June 16, 2016, the Dow fell 610.32 points. Currency markets were also in turmoil. The euro fell 2 percent to $1.11. The pound fell. Both increased the value of the dollar. That strength is not good for U.S. stock markets. It makes American shares more expensive for foreign investors. As a result, gold prices rose 6 percent from $1,255 to $1,330. 

A weak pound also makes U.S. exports to the U.K. more expensive. It affects the U.S. farming and manufacturing sectors. The U.K. is America's fourth-largest export market. Brexit dampens business growth for companies that operate in Europe. U.S. businesses are the most significant investors in Great Britain. U.S. companies invested $588 billion and employ more than a million people in the UK. These companies use it as the gateway to free trade with the 28 EU nations. Many have opened subsidiaries elsewhere in Europe to protect against a hard Brexit or no deal but man other US companies are not prepared.

Likewise, Britain's investment in the United States is at the same level. Brexit could impact up to 2 million U.S. based British jobs. It's unknown exactly how many are held by U.S. citizens but the uncertainty over their future will dampen growth. 

Brexit is a vote against globalization. It takes the United Kingdom off the main stage of the financial world. It creates uncertainty throughout the U.K. as London seeks to keep its international clients. U.S. stability means London's loss could be New York's gain.  

At Simmons Capital Group, we will continue to monitor Brexit and many other international affairs that can influence our client’s portfolios. We make our portfolio decisions based on a combination of intensive research from the USA combined with first hand knowledge and communication overseas. In the coming months I will be in Romania at a conference of business people from across the EU. I will be visiting several economic development projects and simultaneously gathering information about the instability between Ukraine and Russia.   I will also be at meetings in Cyprus with colleagues from Turkey and other Middle Eastern countries so that I can assess the geopolitical and economic risk in the Middle East and the implications for US markets.

Thank you for the confidence and trust that you have placed in the Simmons Capital Group team. We will continue to work hard to earn your confidence through honest, objective and internationally informed advice. Please feel free to call the office at 518-406-5624 if you have questions or if you would like to schedule a meeting to review your accounts. Please feel free to share our commentary and contact information with friends or colleagues or family who are seeking world class financial advice.



Donald E. Simmons, CFP®


The views expressed represent the opinions of Simmons Capital Group and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person.

Social Security SCAM Alert


We are reaching out to you today to share some important information.

Please read the attached alert from social security and be mindful should you receive any calls from anyone posing as a representative of social security. Be advised that no government agency calls citizens in such a manner and you should not provide any information or take any action. 

SCAM ALERT - From the Social Security Administration

Dear Colleague:

We have become aware of reports of fraudulent telephone calls from individuals claiming to represent the Social Security Administration (SSA). In them, unknown callers are using threatening language to warn unknowing victims that they will be arrested or face other legal action if they fail to call a provided phone number or press the number indicated in the message to address the issue. In some instances, these unknown callers switch tactics and communicate that they want to help an individual with activating a suspended Social Security number. Such calls are a scam, and are not coming from official SSA representatives.

We encourage you to inform your members and extended networks not to engage with such callers, and to report any suspicious calls to Social Security’s Office of the Inspector General by calling 1-800-269-0271 or submitting a report on the OIG website. We also urge you to read and share our Social Security Matters blog, which provides more information on the nature of these fraudulent calls, as well as instructions on how to report such activity.

Social Security is committed to protecting the privacy and security of the people we serve. We appreciate your help in spreading the word about this important topic.

-Elizabeth Pivonka, Albany, New York, Social Security Administration

When is Santa coming to town?!


There is a long-observed trend in the stock market which, as the 2019 Stock Trader’s Almanac notes, old St. Nick “...tends to come to Wall Street nearly every year, bringing a short, sweet, respectable rally within the last five days of the year and the first two in January.” This rally has yielded positive returns about 75% of the time since 1969. 

Given the immense pressure on stock markets around the world since the start of October, investors are begging Santa to show up in the final few weeks of the year with a stocking full of gains.  Understanding that momentum works in both directions (both up and down), we are not so sure that Santa will save the day this year.

A question that we have gotten all year is: “if the US economy is doing so well, why isn’t the stock market?”.  First, it is important to recognize that, although closely linked, the economy and the stock market are 2 different markets that tend to move in response to different variables.  In looking at the stock market, we need to be aware that the stock market is a leading indicator, meaning that it often shows where the economy is headed, rather than where it has been.  The economy, on the other hand is often measured by lagging indicators that tend to report what happened in the past.  Therein lies the disconnect between the stock market and the economy.

While we do not necessarily believe that a recession and severe economic contraction is imminent, we are growing increasingly concerned about the stock market and its inability to regain its footing after a tough few months.  Of course, as a leading indicator, we need to be aware that the stock market may also be giving us some hints with regards to where the economy itself is headed.  There are a few very important catalysts that could help stabilize this market:

  • Reassuring words and actions from the Fed, showing that they might be willing to slow down their rate of interest rate hikes in 2019

  • Continued positive developments relative to US/China trade talks

  • Solid corporate earnings reported in January 2019 for 2018’s 4th quarter

From our side, we have been proactive in freeing up 12-18 months of cash for our clients that take annual withdrawals.  Between our stocks and bonds, this means that we are well prepared to sustain incomes without having to sell stocks at a low point to free up cash for a long period of time.  We are also generally defensively positioned with our hedged stock positions.  While it is difficult to watch account values fluctuate wildly, we hope that you can sleep easy, knowing that this is a normal part of the market cycle for which we are well-prepared.