240 South Pineapple Avenue, Suite 200  Sarasota, Florida  34236

You can find reports from our Investment and Research team, timely and informative financial planning topics from our Wealth Management team, and deeper dives on various important topics in our white papers from any team member. Read online, share with friends, or download for your convenience.

Chart Construction Spending

Construction spending is a great indicator of the health of the underlying economy and therefore one that the team at Allegiant likes to track closely. The chart above shows the year-over-year growth rate of construction spending broken down in two main categories: residential and non-residential. Although the total construction spending (dotted line) growth is still positive, the growth rate has been declining for almost six years. The real drag on construction spending growth recently has been the residential segment (grey line), which turned negative on a year-over-year basis late last year. The housing market has been confronted with rising material and labor costs, along with rising interest rates – which have both hurt homebuyer affordability. While non-residential spending (gold line) has remained strong, largely driven by a recent surge in government-related spending, the drop off in residential housing is a concern. If in fact the declining spending is signifying a looming slowdown in the housing market, that could have a significant impact on the economy. Coupled with additional economic indicators, the construction data supports our narrative that economic growth is set to slow in 2019 after the one-time boost of the tax cut. 

The Allegiant Private Advisors team regularly helps guide our client families through many of the most crucial decisions in life, from purchasing a new business or preparing portfolios to support living life to its fullest, to the important duty of planning legacy gifts.

Many people wish to leave a gift to charity when they pass away. These legacy gifts are often outlined in a Will or Trust agreement. While this path works for many people, there may be a more tax-effective way to gift to charities after your death: naming them as the beneficiary of your IRA. This strategy can improve outcomes for all parties involved and can be especially attractive for those wishing to leave money to a mix of charities and family members, especially those in high tax rates. 


Should We Be Worried? Here’s Your Call to Action.

A lot has happened since last month’s commentary. The February employment report came in well below expectations (20,000 versus 180,000 new jobs). The Federal Reserve reacted by shifting course and announced a dovish stance on interest rates and monetary policy. Global manufacturing PMIs declined more than expected. And finally, the big change, the one worth noting above everything else, was a dramatic drop in long-term interest rates, leading to a very important inversion of the yield curve. Click here to read Allegiant's Monthly Insights: March 2019.

Chart ISM Services Breakdown

This month’s ISM Services reading came in at a very strong 59.7. Prior to this report, the past few ISM readings had shown some weakness, which was a concerning sign for a domestic economy that is comprised of primarily service-based businesses. More concerning than the down trend in the headline Services PMI number was the sharper decline in some of the segments that roll up into the headline number, such as new orders and backlog. New orders give some insight into the spending businesses are experiencing, while backlog gives us details about how strong a company’s existing pipeline of work is. The fact that almost all of the reported segments rebounded so nicely is encouraging given some of the geopolitical and trade related risks that are looming. Overall, the report showed that the U.S. economy has entered 2019 on solid footing.

Fourth Quarter GDP Report Updated

Gross Domestic Product (GDP) rose by 2.2% in the fourth quarter, which was in line with expectations. For the year, GDP grew 2.9%, matching 2015 for the strongest annual growth since the Great Recession. The consumer proved very resilient in the fourth quarter, with consumption up 2.5% despite stock market volatility and a partial government shutdown. Business investment also positively contributed 0.7% to GDP, although recent trends in durable goods orders show that this may be losing momentum. The consumer and business gains were partially offset by several factors. Housing related spending has now contracted in each of the last four quarters. Also, government consumption subtracted 0.1% from GDP compared to Q3 where it added 0.4%. This was largely expected given the partial government shutdown. The GDP report shows that although growth did slow some from earlier in 2018, the U.S. economy ended the year on very solid footing. However, as the effects from last year’s tax cuts begin to fade, we expect growth to moderate in 2019.

EstatePlanning Tree APA 750x350

The transfer of wealth to heirs through your estate plan communicates many things to those we leave behind. It says who is remembered, who is loved, who is important, and who we trust to be in charge. Therefore, dividing assets between your children can be a stressful ordeal. Many parents want to be fair to everyone, interpreted as an even split of all assets. For some families, however, an even split doesn’t make the most sense. How you handle this delicate situation with your own family depends on many personal factors. 

Sometimes being fair doesn’t mean being even when it comes to estate planning, but - in all cases - family meetings can help.

Click here to read more about the Allegiant Private Advisors team’s perspective in a new article on SarasotaMagazine.com.

In the 1975 political thriller film “Three Days of the Condor,” Robert Redford plays a CIA analyst working in a clandestine office where they endlessly read disparate books, newspapers, and magazines from around the world to discern trends, hidden meanings, and other useful information that might be buried in the noise.
Allegiant's newest white paper by our Chief Operating Officer and Principal Paul Cantor, CFA, AIF®, CFP®, is similarly an attempt to link a myriad of mega-trends and world events into a tapestry of potential outcomes, and the policies required to get there.

Click here to read The Devolution of Globalization.

With the turn of the calendar, equity markets are off to a roaring start. Troubles from the 4th quarter are a distant memory as U.S. stocks have recovered nearly all their losses. Even more, bonds have staged a nice rally over the last few months, adding incremental return to balanced portfolios. However, even though markets are ignoring the trouble spots, it doesn’t mean they don’t exist. In fact, the U.S. faces a few critical challenges in the coming months. Click here to read more. 

Chart Retail Sales Decline

Coming into early 2019, the economic spotlight was placed on the consumer to see if the 2018 year-end market selling and other soft confidence-related releases would lead to weaker spending. One way to gauge the spending growth of consumers is through the change in retail sales which is displayed by the black line, while the gold line represents the change in retail sales excluding gas stations, building materials, and automobiles. Although it is only one data point, last week’s retail sales decline represents the largest decline since 2009. The decline is concerning given that the data represented December 2018 retail sales, where we would typically expect spending to be strong around the holidays. However, the pessimism that can be extracted from the most recent data point was not supported by numerous other retail spending related gauges around the holiday season or by the current job market and wage growth picture. It will be interesting to see if December’s decline will become a trend or if the data was skewed by one off issues that will be corrected in January.

Children, Grandchildren and/or Great-Grandchildren of Allegiant Clients are Eligible and Encouraged to Apply to Allegiant's Annual Scholarship Program

Allegiant Private Advisors gives back to the community in many ways, and there is a particular focus on education and children among our staff. We also believe that the most important thing to our clients is the health and well-being of their family. Our scholarship program is particularly designed to heighten the awareness of personal financial planning and fiscal responsibility for graduating high school seniors. What better way to help your children focus on their own financial success.

Eligibility: The scholarship is available to any graduating high school or currently-enrolled college student who is a child, grandchild and/or great-grandchild of a current client. The high school student must have plans to attend any post-secondary educational institution. The scholarship will be awarded directly to the student in the amount of $1,500.

Application Process: Student must satisfactorily complete the following:

  •  An application.
  •  A 350-word essay on “What is personal financial responsibility?”
  •  A current academic record, a list of recent community service work, extracurricular activities, and work experience.

All of these are required for the application to be considered.

The Selection Process: An Advisory Committee will review the entire application. All applicants’ names will be removed from the selection process to insure objectivity. Employees and families of Allegiant Private Advisors and Kerkering Barberio, CPA are not eligible for the scholarship.

Distribution: The Scholarship will be paid directly to the award recipient. This scholarship is not needs-based.

We are delighted to offer this benefit for our clients. If you would like more information, please contact our office.

The deadline for receipt of application is April 26, 2019
The final award will be made by May 28, 2019

It is our goal to continuously enhance the long-term relationships we have with our clients and their family members. We hope you will encourage eligible family members to participate in this opportunity.

It is our goal to continuously enhance the long-term relationships we have with our clients and their family members.

We hope you will encourage eligible family members to participate in this opportunity.

Please feel free to contact our office if you have any questions about the scholarship program: (941) 365-3745.