Bull market record, huge aerospace merger, Fed chairman challenge
The current bull market is a month away from being the longest economic expansion in history! What’s next for the market? Read on to get details.
The Longest U.S. Economic Expansion Ever (Almost) – The current U.S. economic expansion, which began in the aftermath of the global financial crisis in 2009, now only needs one more month to become the longest in our country’s history. Chances are, the U.S. will continue growing through the summer, and in our view, throughout the balance of the year. But even though the country has been growing, adding jobs, growing wages, and increasing household wealth over the last decade, this economic expansion and bull market rarely find themselves receiving praise from investors and market-watchers. Indeed, the narrative typically centers around how slow growth rates have been, projections for when the expansion will come to an end, or complaints about how the expansion has favored some but not others. In our view, maybe this summer would be a good time to herald the economic expansion for what it is – the longest in U.S. history – and reflect on how resilient the U.S. economy has been in the wake of a financial crisis and amidst an ongoing trade dispute. Business cycles have historically lasted between 5 and 8 years, so the fact that the current one is 10 years old is an accomplishment in and of itself.1
9 of the biggest financial mistakes you should avoid!
The current economic expansion may be old, but it’s not over yet. Looking toward the remainder of this bull market, many investors may be wondering what to do and how to prepare for what’s next.
See what we believe are the biggest mistakes investors make and how to avoid them with our guide, “9 Retirement Mistakes to Avoid.”
If you have $500,000 or more to invest and want to learn more, click on the link below:
Learn About the 9 Retirement Mistakes to Avoid!2
Huge Merger Seeks to Challenge Boeing’s Market Dominance – The world’s second largest aerospace and defense company was created this week by a merger. United Technologies reached an all-stock deal to merge with Raytheon, a defense contractor that derives 80% of its revenue from the U.S. and foreign government contracts. Raytheon’s ‘Patriot’ missile system, for instance, is used by 9 (friendly) nations. With nearly $400 billion of government contracts awarded in 2017, the merged company – Raytheon Technologies – hopes to competitively bid for a larger share of the pie. The two companies make for an interesting, competitive, and likely very innovative pair. United Technologies makes the engines that power F-35 fighter jets, while Raytheon manufactures the Tomahawk cruise missiles that U.S. Navy ships rely upon in combat. The deal is yet to be approved by U.S. regulators, but market-watchers anticipate that it will get the green light. The combined company is expected to be valued at over $100 billion.3
The Tenuous Regulatory Environment for Big Banks – in the aftermath of the global financial crisis, the Dodd-Frank legislation for regulating big banks was largely seen as a tangled web of rules that created more uncertainty for how banks should take and assess risk. Today, nearly 10 years later, the rules of the road are still muddied for Wall Street’s biggest banks, as Republican lawmakers have been at work rolling back regulations but have not worked at the pace that many big banks had hoped for. Lawmakers now see the window for regulatory rollback narrowing with the 2020 elections ahead, and as a result they have been pressing top officials at the Federal Reserve, the FDIC, and the OCC to move more quickly to ease restrictions on the financial sector. For big banks, in our view, the issue isn’t so much having new rules or regulations, it’s having the certainty of knowing what the final regulations will look like.4
The 3-Pronged Challenge Facing Fed Chair Jerome Powell – Federal Reserve Chairman, Jerome Powell, is being challenged on three different levels in his efforts to run the world’s largest central bank. On one hand, Mr. Powell’s top mandate is to set policy that will allow the U.S. economy to continue expanding within target inflation levels and close to full employment. On the other, Mr. Powell is facing immense political pressure to lower rates in an effort to juice the U.S. economy and markets, but he must find a way to maintain the Fed’s independence when setting policy. Finally, on yet another hand, Mr. Powell is challenged with informing the public of exactly what the Fed does and why, and how these decisions are data-dependent and in the U.S. economy’s best interests. It’s not an enviable position Mr. Powell finds himself in, and the Fed’s meetings this summer will draw more scrutiny than any other Fed meetings in recent history. Good luck, Mr. Chairman.5
We can’t predict or control what is in store for
the market, but investors can stay focused on making sure their own actions
help guide their investments to succeed. One way to do this is not to fall prey
to common investing mistakes.
There are common mistakes and habits that can help some investors succeed while others fail. To help you understand some of these mistakes and how to avoid them, we have created the guide, “9 Retirement Mistakes to Avoid.”6
In this guide, we provide our thoughts on what we believe are 9 of the biggest retirement mistakes investors should avoid. If you have $500,000 or more to invest and want to learn more, click on the link below:
2 ZIM may amend or rescind the free guide offer for any reason and at ZIM’s discretion
3 The Wall Street Journal, June 10, 2019. https://www.wsj.com/articles/united-technologies-strikes-deal-to-acquire-raytheon-11560112912
4 The Wall Street Journal, June 10, 2019. https://www.wsj.com/articles/rewrite-of-bank-rules-bogs-down-11560159001
5 The Wall Street Journal, June 10, 2019. https://www.wsj.com/articles/trump-hectoring-of-fed-chairman-complicates-rate-calls-i-guess-im-stuck-with-you-11560177574?mod=djem10point
6 ZIM may amend or rescind the free guide offer for any reason and at ZIM’s discretion
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