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Market Viewpoints

by Keith Bonjour, Portfolio Manager

The stock market staged a strong move upward during the first quarter after suffering a severe pullback in the fourth quarter of 2018. Many of the same events that caused the market to selloff have been the same reasons for the recovery. In the fourth quarter of 2018, the market was very concerned with the Federal Reserve’s rate hike and balance sheet projects along with the ongoing trade war between the U.S. and China that seemed to have no end in sight. However, the Federal Reserve started 2019 doing almost a full 180 degree pivot to lean much more cautious on both the interest rate hike trajectory as well as reducing the balance sheet. This ignited a strong rally in January that continued through February and March.

In addition, the trade talks between the U.S. and China seem to be showing signs of progress; however, there remain several sticking points including the timing of tariff removals, purchase agreements, deal enforcement, and intellectual property protection. Both the Federal Reserve policy and balance sheet along with the ongoing trade dispute between the U.S. and China will continue to be on the forefront of the minds of investors this year. Consensus is now that the Fed will remain on hold for the remainder of the year with even a possibility of the Fed actually cutting rates by year-end. This will bear close watching as the year progresses to determine the trajectory of economic growth, inflation, and corporate earnings as well as changes to the yield curve.

The trade talks between the U.S. and China seem to be progressing at a good pace so far this year. Both sides have indicated productive discussions and areas that have seen agreements by both parties in the overall policy framework. However, there remains some points of contention when it comes to enforcement of the agreement, removal of tariffs, and intellectual property protection. Even with these points of contention, we think both sides are seeing mounting pressures both economically and politically to come to an agreement. It will be prudent to keep a close eye on both Fed policy and company earnings throughout the year, as well as changes to the yield curve and economic expansion.

While risks of a recession remain relatively low, the inversion of the 3-month and 10-year treasury curves serve as a warning sign that downside risks in the economy are growing. We continue to recommend a more neutral stance on equities with a focus on higher quality companies with stronger balance sheets while maintaining the proper liquidity and duration in our bond portfolios. We also recommend a more long-term focus on investment goals and objectives, and not reacting to short term up or down movements in the market.

In the Community: Our Non-Profit Community Spotlight

The Handicapped Development Center

Alice likes living in an apartment with a couple of roommates. They share cooking duties, take turns doing household chores, and rotate who has control of the remote. By all accounts, this living situation seems fairly common, but for Alice’s mother, it’s extraordinary.

Alice was born 50 years ago, which happened to coincide with the year the Handicapped Development Center (HDC) came into existence. At that time, very few local service options were available for families who had a child or adult with disabilities. Group homes did not exist yet in this area, options for work were limited, if not nonexistent, and recreational activities were scarce. Alice’s mother could not have dreamed that her daughter, who experiences intellectual and physical challenges, would have such a full life today. Through supports and services provided by HDC, Alice leads a life of dignity and value.

She works at HDC packaging parts, a job that is a source of pride and a weekly paycheck. At her apartment, Alice’s staff are always there to provide the support necessary for Alice and her roommates to live successfully in the community. Alice’s social calendar is also full. Weekends are packed with friends’ birthday parties, a bowling league, dances, and more. Thanks to the generous support of many people and organizations, HDC has been assisting Alice and others like her for 50 years.

Building partnerships with groups like Northwest Bank’s Investment Management Group has made it possible for that to happen, and families working with Northwest Bank’s IMG can ensure that those services continue for the next 50 years and beyond. HDC is inviting the community to help celebrate its golden anniversary with events planned throughout 2019. Visit the HDC website at to find out more and join the celebration. .

Are You Protected?

by Patrick Olsen, Special Care Planner, Financial Services Professional

If you are like most people, you feel an obligation to protect your family with the right amount of life insurance, and perhaps you know you need more coverage. Many people find buying life insurance to be a daunting task, which often prevents them from getting the protection their families need. However, understanding life insurance is as easy as answering two basic questions:

1. How much do you need?
2. What kind should you buy?

To determine if your family is adequately protected with the right amount and right type of life insurance, please give me a call to review your current situation. The Investment Management Group is pleased to partner with Olsen Financial to offer additional services to our clients. You can visit Pat at his office in the Investment Management Group.

Now Offering Tax and Accounting Services

With the recent acquisition of Blair, Westfall & Company, Northwest Bank & Trust Company is now offering tax and accounting services. Blair, Westfall & Company brings a consistent record of uncompromising ethics that instills confidence and trust in every customer. Through their use of advanced technologies, you can expect quick responses and the most relevant financial information and perspectives.

- Cost effective solutions for all of your financial needs
- Payroll and accounting database specialists
- Individual and corporate taxes

Contact anyone at the Investment Management Group for more information. Contact Amy and her team directly at 563.514.5522.

Investment Products
• Are not insured by the FDIC or any other federal government agency
• Are not deposits of or guaranteed by the bank or any bank affiliate
• May lose value