The Brexit (the British exit from the European Union) impact has been felt more in our markets than the impact from the Fed. Even though the possibility of the Fed raising interest rates went down from 50% to 20%, the Brexit impact caused the market to trade down last week. More in the video.
We are at a tipping point with the markets. Is the market going up or has it peaked? The catalyst could be the Fed as it has been a “Fed’s Market” for the past few years. The possibility of Great Britain leaving the EU and the price of oil fluctuating has created some uncertainty in the markets. When the markets are uncertain, that can hurt your portfolio.
We are seeing positive results from the low oil prices we have had for 18 months now. There has been a rise in consumer spending which is very encouraging economic news. There could be more positive news this week.
We currently have a conservative portfolio strategy because of the Fed’s very hawkish statement last week, low earnings, and a drop in market expectations. Now that bad earnings are in the rear view mirror, we are looking at a very unaccommodating Fed in front of us. There is a lot of information that is all over the board.
With the Memorial Day weekend fast approaching we are starting to see gas prices on the rise along with some positive news about consumer spending and the housing market. Even if this is a short-term rise in oil prices, it could hurt the consumer, as we will see gas prices rise at the pumps.
Canadian oil fires have taken around a third of their production off line. Most of that oil ships directly to the US. This will have a direct affect on oil prices and possibly our gas prices. Ironically, this is happening right before the summer when historically gas prices go up as more people travel.