How Can You Navigate Volatility?
All eyes appear to be on President Trump and President Xi Jinping as they get ready for the G20 Summit this weekend. What could this mean for tariffs and the world economy? Read on to get details to this story and other hot topics affecting the market…
Shop ‘Til You Drop – consumer behavior continues to shift when it comes to holiday shopping preferences, but the most important behavior remains: American consumers love to shop. While brick and mortar retailers continue to see sluggish foot traffic in stores, with a 5%-9% decline from last year, a strong surge in online traffic and higher spending by Americans across the board delivered a solid start to the consumer spending…err…holiday shopping season. Initial estimates pegged online sales from the Wednesday before Thanksgiving through Black Friday at $12.3 billion, which is a 26.4% jump from last year.1
3 Key Words for Stocks: “Just Below Neutral” – Stocks rallied this week following Federal Reserve Chairman Jerome Powell’s comments regarding the neutral rate, which is considered the set interest rate where the economy is growing sustainably while inflation is also in check. In other words, it’s the interest rate that the market can expect the Fed to use as a target, whereby they could pause monetary tightening once the level is reached. Mr. Powell’s comments were a noticeable walk-back of his comment in October that the Fed’s benchmark rate was a “long way” from the neutral rate, which sent the unwelcome message to Wall St. that the Fed had several more rate hikes in mind. In comments last week, Mr. Powell said that rates are now “just below” the neutral rate, which sends the different signal that monetary tightening could be nearing its end point. Investors will be poring over the Fed minutes next week to find out.2
The market has experienced many ups and downs in the past several months. But you don’t have to manage it alone. Working with the right wealth manager can help you through volatile times.
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Can the U.K. Avoid Economic Catastrophe with a Brexit Deal? Brexit is a total mess, but there is a glimmer of hope that a deal between the EU and Britain is nearing. British Prime Minister negotiated a treaty with European Union leaders for leaving the bloc, and EU leaders have approved the terms. But the most difficult part of Brexit negotiations is yet to come, as Prime Minister May still needs Parliamentary approval for the deal – a very tough sell. She has until mid-December to convince lawmakers the deal is the best possible for Britain, but already she is being met with opposition even from members of her own party. Britain should be aiming desperately to get a deal in place before March, when they’re scheduled to leave the bloc, lest they experience big disruptions in trade and security ties with the European Union.4
The Market is Watching President Trump and President Xi Jinping – the G20 Summit takes place in Argentina over the weekend, and the whole world will be watching the planned dinner meeting between President Trump and Chinese President Xi Jinping. The leaders of the world’s two largest economies have been overseeing a standoff on trade over the last several months, with a tit-for-tat on tariffs that has so far managed to create uneasiness in the markets but has not measurably impeded growth. President Trump stated this week that it is “highly unlikely” he will accept a request from Beijing to suspend the planned increase from 10% to 25% on $200 billion in imports from China, but perhaps a breakthrough is in the offing at the G-20. The world economy hopes so.5
Meanwhile, Global Economic Data Softens – as leaders descend on Buenos Aires for the G-20 summit this weekend, they will be confronting recent data showing that developed market economies are falling slightly short of growth goals, while global markets continue to tread on shaky ground. The Citigroup Economic Surprise Index, which tracks whether economic reports are meeting projections, has declined to its lowest level in several months, which has also coincided with weak markets since June. Crude oil prices may also be a point of discussion on the economic front, as oil is down nearly a third since the beginning of October.6
While watching news stories can help you stay abreast to data that tells you about the state of the economy, proper financial planning also requires knowledge of investments, cash flow needs, saving strategies, and more down the line. This may sound like a lot to manage, but you don’t have to do it alone.
We have helped investors build a better future by approaching investments with our time-tested and disciplined approach – research driven, results oriented and client focused! And, we are proud that this disciplined philosophy has placed us in the top 6% out of hundreds of equity managers in the Morningstar Equity Universe (as of 9/30/2018).7
To learn more about how you can plan for your future, we would like to offer you our just-released guide, “Guide to Personal Wealth Management.”8 This guide will give you some steps needed to prepare a secure financial future.
If you have $500,000 or more to invest, click on the link below to get your free copy.
2 The Wall Street Journal, November 28, 2018. https://www.wsj.com/articles/fed-chairman-flags-rising-indebtedness-of-some-u-s-businesses-1543424400?mod=djem10point
3 ZIM may amend or rescind the Guide “Guide to Personal Wealth Management” for any reason and at ZIM’s discretion.
4 The Wall Street Journal, November 25, 2018. https://www.wsj.com/articles/u-k-eu-approve-hard-fought-brexit-divorce-deal-now-the-harder-work-begins-1543155488?mod=djem10point
5 The Wall Street Journal, November 26, 2018. https://www.wsj.com/articles/trump-expects-to-move-ahead-with-boost-on-china-tariffs-1543266545?mod=djem10point
6 The Wall Street Journal, November 27, 2018. https://www.wsj.com/articles/investors-confront-growth-fears-ahead-of-g-20-summit-1543323600?mod=djem10point
7 These rankings may not be representative of any one client’s experience. In addition, they are not indicative of future performance. Returns for each strategy and the corresponding Morningstar Universe reflect the annualized returns for the periods indicated. The Morningstar Universes used for comparative analysis are constructed by Morningstar (median performance) and data is provided to Zacks by Zephyr Style Advisor. The percentile ranking for each Zacks Strategy is based on the gross comparison for Zacks Strategies vs. the indicated universe rounded up to the nearest whole percentile. Other managers included in universe by Morningstar may exhibit style drift when compared to Zacks Investment Management portfolio. Neither Zacks Investment Management nor Zacks Investment Research has any affiliation with Morningstar. Neither Zacks Investment Management nor Zacks Investment Research had any influence of the process Morningstar used to determine this ranking.
8ZIM may amend or rescind the Guide “Guide to Personal Wealth Management” for any reason and at ZIM’s discretion.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.
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