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June 17th, 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

The rebound from the May selloff continues. After dropping 6.4% in May, the S&P 500 has reclaimed 4.5% of that loss in just the first two weeks of June. In doing so, that broad market index, as well as the Dow Jones and Nasdaq, have reclaimed their 200-day moving averages. We now sit approximately 2% from the highs seen in April 2019 and September 2018.

Some of the rebound over the past few weeks is likely due to oversold conditions that developed in the steep May drop. The rest is the result of the Federal Reserve hinting at a rate cut to deal with the headwinds felt from the trade tariffs with China.

For the first time in several years, corporate earnings are beginning to crack. The weakness is presently contained to the manufacturing sector, but it is a concern worth watching. Morgan Stanley just came out with a report that stated business condition sentiment dropped 32 points this month and is now at the lowest level since 2008. This indicator is also likely suffering due to the instability in present government policy. While threats of economic war and tariffs (taxes) may be fun for politicians, they are not fun for business owners who need to know the rules of the game they are playing. Our central bankers are aware of this and seem to be willing to step in.

Market participants all over the world are waiting for the conclusion of the Federal Reserve meeting on Wednesday. The bond market is pricing in a 25% possibility of a rate cut. We will have to wait and see if we get one – or at least additional comments suggesting dovish monetary policy ahead. The long and short of it is that investors are expecting some help to deal with all that is in front of us.

The rest of the world markets continue to lag behind the U.S. While we saw some outperformance in foreign markets during the first quarter of this year, it has now abated, and we have returned to the same posture that persisted during most of 2018. I would generally feel a lot better if there was some strength somewhere else in the world.

We are in the process of reallocating in response to improving technical conditions during the past week. We are moderately bullish.

IMPORTANT DISCLAIMERS

This material is prepared by Cabana, LLC, dba Cabana Asset Management 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 www.adviserinfo.sec.gov/.

The Financial Advisor Magazine 2018 Top 50 Fastest-Growing Firms ranking is not indicative of Cabana’s future performance and may not be   representative of actual client experiences. 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. Visitwww.fa-mag.com for more information regarding the ranking.

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No client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance. 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 any investor. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. While loss tolerance and targeted “drawdown” are identified on the front end for each portfolio, Cabana’s algorithm does not take any one client’s situation into account. It is the responsibility of the advisor to determine what is suitable for the client. An advisor should not simply rely on the name of any portfolio to determine what is suitable. Cabana manages assets on multiple custodial platforms. Performance results for specific investors may vary based upon differences in associated costs and asset availability.