Events causing global uncertainty
Events in Syria, Russia, North Korea, Egypt, Sweden, politics in our own country, and the Fed Chair, Janet Yellen, saying that she felt like the market was overvalued have caused global uncertainty. In 1995 when then Fed Chair, Alan Greenspan, said we were experiencing “irrational exuberance” the markets continued to climb for the next four years.
Resilient US markets
The market was surprisingly resilient and remained flat this past week considering. Adding to this global uncertainty, the House Speaker stated it was going to be slow going to get anything passed in our government and the economy was hit with a disappointing jobs report. It appears, however, that US markets, portfolios, and investments are holding up fairly well in the face of these nasty global and domestic events.
Reason for weak jobs report
Why was the jobs report so weak? It is do to retailers, for the third straight month, laying off more than 30,000 people. The question now is who is going to hire these people? The impact of technology on business models and jobs will continue to play a factor here.
Even with all of this global uncertainty, consumer confidence is very strong right now. According to the Federal Reserve, credit card debt in the United States went over $1 trillion for the first time. That is significant because it is the third leg of the stool from people’s spending that helps the markets. Those three legs are: buying a home, buying a car, and consumer debt which finances small purchases than the first two. We have been having more of the first two, but now we have all three.
In spite of the global uncertainty we are seeing more US consumer confidence and corporations report very good earnings. We will continue to keep you updated on these economic and market trends so you can better understand all the different factors that can impact your investments.
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Greg Powell, CIMA
Email Greg Powell 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.
No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.