Cumberland Advisors Week in Review (Oct 21, 2019 – Oct 25, 2019)

Author: Cumberland Advisors, Post Date: October 26, 2019

The Cumberland Advisors Week in Review is a recap of news, commentary, and opinion from our team.

Week In Review

These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.


As part of Cumberland Advisors’ continuous effort to maintain strong customer relationships, we offer this week’s short video discussing current market conditions and how we are positioning portfolios.

In this week’s review, we talk about:
– Current markets
– If you are long on markets, what you like today is what we saw out of our cross-market indicators
– Defensives are where people put money when they are concerned or nervous about the market
– It’s difficult for the broad market to rally when defensives have a bid
– Is all the bad news priced into the developed market?
– What helps our domestic markets?
– A mini-battle is on the horizon. Will the market break out of where it’s been?
– A little review on some of our strategies
– John Mousseau will be joining us next week!

-Email us at or give us a call at (800) 257-7013

Enjoy your weekend and please send us your questions and comments. We thank you for joining us!

Watch in the video player or at this link:

Matt enjoys your feedback. You can reach him at:
-Link to Matt’s Email:
-Link to Matt’s Twitter:
-Link to Matt’s LinkedIn:

Brexit Uncertainty for Investors Persists

Author: William Witherell, Ph.D., Post Date: October 21, 2019

The exceptional Saturday session of the United Kingdom’s Parliament, the first in 37 years, was expected to produce a decisive yes or no vote on the new Brexit deal Prime Minister Boris Johnson had negotiated with the European Union (EU).


October 19 was the final day for Parliament to agree to a deal before the Prime Minister would be required to request an extension from the EU beyond the current date of October 31. To the government’s apparent surprise, an amendment was proposed and passed (322 to 306) stipulating that Johnson’s deal could be approved only when all the legislation implementing the withdrawal is passed. So no vote on the deal was possible.

Johnson reiterated his position: “I will not negotiate a delay.” But as he was required by law, he sent a letter to the EU requesting a three-month delay. He did not sign the letter and sent an additional letter recommending that the EU not grant the requested extension. This maneuver will certainly be reviewed by one or more courts. In any event, the EU considered the request made and is very likely to grant the extension to limit the possibility of a no-deal hard exit of the UK from the EU.


Q3 2019 Municipal Credit: Bond Market Dynamics, Natural Disasters, Green Bonds, State Rating Changes, & an Update on Single Ratings

Author: Patricia Healy, CFA, Post Date: October 24, 2019

Municipal bond credit quality remains relatively strong, as indications are still that upgrades are outpacing downgrades. S&P and Moody’s have both recently issued comments that corporate credit quality is weakening.

Per S&P, credits rated AAA to B- with negative outlooks or CreditWatch-negative assignments have been increasing, indicating a negative bias. Similarly, Moody’s estimates that the third-quarter downgrade-per-upgrade ratio for all US high-yield credit-rating revisions increased to over 2.25:1 from January to September 2019; and this is excluding downgrades that were for special events rather than fundamental weaknesses such as in financial operations or business position. The ratio is up from 1.09:1 for 2018.

Interest rates have been low and declining, and corporate and municipal issuers are taking advantage of the positive market conditions. Increased issuance sometimes indicates that market players think rates are attractive and are going to go higher. Municipal volume this year is expected to reach $400 billion, much higher than beginning-of-the-year estimates of $340 billion. The increase has occurred because municipal issuers are rushing to market with taxable municipal bonds to refund outstanding tax-exempt bonds.


Puerto Rico House votes to resist pension cuts

The Puerto Rico House voted unanimously to not collaborate with pension cuts found in Puerto Rico’s proposed plan of adjustment.


Shaun Burgess of Cumberland Advisors

Shaun Burgess, portfolio analyst at Cumberland Advisors, said, “My understanding is that advancement of the plan depends on Judge Swain’s approval and not legislative action.

“Whether [the House’s action] could be road block at some point in the future remains to be seen,” Burgess continued, cautioning that he is not a lawyer.


The Kiplinger Tax Map: Guide to State Income Taxes, State Sales Taxes, Gas Taxes, Sin Taxes

Author: David R. Kotok, Post Date: October 25, 2019

We’re again returning to the complex subject of wealth taxation. Why? A number of readers have asked us for further details about it.

Market Commentary - Cumberland Advisors - The Kiplinger Tax Map

For example: isn’t real estate taxation a form of a wealth tax? And if the tax on your house is limited in deductions because of SALT, isn’t that a federal form of a hidden wealth tax? As readers can quickly see, this becomes complex quickly.

The following link takes you to a Kiplinger interactive breakdown of taxation in all 50 states. It is not just an income-tax-rate comparison. For example, you can see just how devastating the real estate property tax burden is in New Jersey. Readers may set up their own comparisons. We thank Kiplinger for offering this public service.


Philly pension board drops Ken Fisher as money manager after derogatory comments about women

Philadelphia’s city pension fund has dropped money manager Ken Fisher as a portfolio manager, after the high-profile Wall Street mainstay was reported to have made sexist comments at an industry event earlier this month.

“The trustees and staff of the Philadelphia Board of Pensions find Ken Fisher’s comments, as reported by multiple media, to be sexist, offensive, and wholly incompatible with the board’s values,” spokesman Michael Dunn said in a statement.


In the professional world of Fisher’s asset management peers, “his behavior was viewed as appalling and offensive. He subsequently apologized. Most of the shocked professionals I spoke with said, ‘too little, too late,’ ” said David Kotok, chief investment officer with Cumberland Advisors, which manages bond portfolios for pension funds and other clients.


Turkey & Trump

Author: David R. Kotok, Post Date: October 19, 2019

Here is an updated report from Al Jazeera on the Turkey ceasefire and related developments. While it reflects network leanings, they are much different from the CNN-Fox distortions, and more facts may often be gleaned.

Market Commentary - Cumberland Advisors - Turkey & Trump

Dear readers, there is no rational way to seek an investor path through the bewildering twists and turns of present American foreign policy, if policy it be. It changes continually; and its disruptiveness, accompanied by constant, corrosive hyperbole, makes macro-dependent investing a high-risk adventure.

Here’s our position. We don’t own the Turkey ETF. We see the entire Middle East as a risky place. Think about it. Saudi gets attacked, and drones disable 5% of global oil production. Then nothing happens. Next, two missiles hit an Iranian tanker. Still nothing happens. Now, hundreds of ISIS fighters have escaped, and the lives of hundreds of thousands of Syrian Kurds are at risk. What will happen next?



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