Oil prices will not hold
Last year our markets traded with oil almost every single day. This theme continues into this year as the markets have been rising and falling with oil prices. The fundamentals still haven’t changed as we are still over supplied with storage capacity is above 90%. Any time storage capacity is above 80% the price of oil usually tanks. This is why we do not think oil will hold. We believe oil went up last week with the help of the Fed meeting and the falling dollar.
Investors felt the impact of the falling dollar
Last week investors felt an impact on their portfolio from the falling dollar. The Fed meeting last week happened as the market expected. They didn’t cut rates and they lowered their rate hike expectation from four to two. That caused the falling dollar which helped oil prices. The problem lies in the fact that while the US Fed is doing nothing, the rest of the world is initiating quantitative easing which will strengthen the dollar.
High priced new homes
We have an important housing report on existing home sales today. Housing has always been a major leg on the stool of the economy. With a favorable jobless rate and good consumer confidence, we should be having more existing home sales. The reason behind that is lower priced homes have moved a lot but higher priced new construction homes have not. That escalates the price making it harder to buy. The positive side is that home builders are going to jump back into the market because of the restrictive supply. This will have a multiplier affect on the economy, as it will create jobs and business for retailers.
It all boils down to consumer confidence
It all comes down to consumer confidence as they respond to the housing market and gas prices at the pump. Many baby boomers are looking to down size their homes, while everyone is trying to decide whether these lower gas prices are going to stick around or if they should continue to save their money in case gas prices go back up.
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Greg Powell, CIMA
President/CEO
Wealth Consultant
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Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
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Vice President
Wealth Consultant
Email Bobby Norman here
Trey Booth, CFA®
Vice President
Wealth Consultant
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.
Economic forecasts set forth in this presentation may not develop as predicted.
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