Impact of The Elections
There is supposed to be a record turnout at the polls this year for the midterm elections. We will be focusing on how the election will impact the markets. There’s no guarantee about future performance but from a historical standpoint, according to our research partners, up to 15 times that the house has changed the party in control during midterm elections, 80% of those times the market was up the following year. The economic numbers were very strong last week. There was a great consumer number, strong jobs number and wages grew at the fastest rate in over 9 years. The unemployment rate was the lowest it has been since 1969. The Fed is meeting on Wednesday and Thursday of this week, so we will keep a watch on the outcome of those meetings. The volatility of the market has picked up but the economy still seems to be very strong. We are expecting The Fed to continue their course of raising rates.
Growing Job Market
The jobs number came out late last week and the results were very positive. Around 190,000 jobs were expected to be created in October, however, it ended up being closer to 250,000. The largest increase was in the health care and education fields. We saw good diffusion in the reported numbers which means we saw growth across all levels. According to research, there’s a 76% chance that the Fed will raise rates in December. If we see this happen it could affect the bond market as well as corporate earnings. We research the jobs report because it relates to portfolios. If companies are hiring that means that they are growing. When companies have excess cash, they tend to invest that cash back into their companies. Those types of increases have a positive impact on portfolios because if corporate earnings go up then that could increase the value of stocks. We have had one of the most volatile markets in history this year and we will continue to watch portfolios and how they might be affected.
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.
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