A roller coaster market
After an extremely volatile week, the DOW and S&P 500 ended up about 1%. Oil was up over 12% and GDP was revised upward 3.7%. The Jobs Report and Wage Earnings Report coming out this week are very important, as it could influence the Fed raising interest rates on September 17th.
Who cares if interest rates go up?
We have had heated debate today about interest rates going up. There is a lot of language from the Fed that has made it unclear to whether they will raise interest rates or not. We believe this wishy-washy attitude has affected the market to where no one will really care if interest rates are raised. In other words, it might not have that big of an impact.
Bonds benefit portfolios
If you have bonds in your portfolio, it paid off last week, as we saw people rushing to buy bonds as the stock market came down. Declining oil prices are causing some investors to want to jump into the energy market. Our indicators are still telling us we are still in a bear market for commodities and natural resources. We still believe oil could go even lower.
Labor Day weekend
Investors need to remember that with Labor Day weekend coming up, there will not be many buyers come Friday. This could affect the market in a negative way.
How China Will Impacts Investors
The Chinese government has been trying to prop up their economy, much like the United States’ TARP bailout back in 2008 and 2009. In comparison, the US Treasury made a profit off the TARP bailout because they initiated it at a market low. The Chinese will have a hard time making their money back because they did it when their markets were high. This has the potential to be problematic down the road. China will impact investors not through the markets but through imports. If they continue to devalue their currency and market, it would cause their export products to devalue, which will make it harder for the other economies to compete.
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Greg Powell, CIMA
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Ashley Page, JD, MBA
Senior Vice President
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Bobby Norman, CFP®
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Trey Booth, CFA®
Email Trey Booth here
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.
Stock investing involves risk including potential loss of principal.
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