In today’s Steady Investor, we look at key questions investors are asking, and factors that we believe are currently impacting the market such as:
The United States Lags Europe in Economic Recovery, For Now – Economic data from June suggests that Europe’s economic recovery is outpacing that of the United States, at least for now. Purchasing Managers Indices (PMIs) are a good indicator of activity across services and manufacturing, and June readings show Europe accelerating as U.S. activity levels off. The composite PMI, which combines data from services and manufacturing, returned to growth (a reading above 50) in the U.K. and across the eurozone, with output advancing at its quickest pace in years. Meanwhile, in the U.S., the composite PMI for June ticked only slightly higher to 50, indicating that activity had flat-lined after five months of contraction. While services and manufacturing expanded in Europe, only manufacturing returned to growth in the U.S., with services logging a sixth consecutive month of contraction. Covid-19 cases could be the driving factor behind the diverging growth paths of the U.S. and Europe. While most European countries are seeing a few or several hundred new cases a day, the United States now accounts for more than 25% of worldwide cases, and continues to see over 50,000 new cases daily.1
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How to Use Market Volatility to Your Advantage
As we wait for a vaccine and for the market to fully recover, many investors will have to brace themselves for continued volatility. Market volatility is challenging for just about every investor, especially with all the unknowns that come with the current pandemic. But for all the worry and discomfort volatility often causes, did you know there are also several positive aspects of volatility?
If you have $500,000 or more to invest, get our free guide, “Using Market Volatility to Your Advantage” and learn our insights, based on decades of experience, about how a volatile market may be able to actually help investors refine their strategies and potentially generate solid returns over time.
You’ll get our ideas on:
Download Our Guide, “Using Market Volatility to Your Advantage”2
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Gold is Surging as the Dollar Weakens – Many headlines this week focused on the surging price of gold and the concurrent weakening of the dollar. Indeed, gold prices rose to a new closing record for the first time in almost ten years, extending a summer rally arguably fueled by nervous investors building portfolio hedges in light of a gloomy global economic growth outlook, depressed interest rates, and rising tensions between the U.S. and China. The ‘gold rush’ has actually been underway since early 2019, and physical traders in London and New York have been trying to acquire more metal as individual investors order bars and coins. Gold prices have also been on the rise as the U.S. dollar weakens. As we write this, the U.S. dollar is on track for its worst month since April 2011, as a challenging battle against the Covid-19 outbreak has weakened the recovery and arguably prolonged the amount of time needed to return to pre-pandemic growth levels. Traders have been selling the dollar and buying currencies of developed countries where the pandemic is largely under control, such as the euro, the Australian dollar, and Japanese yen.3
Did Google Just Set the “Work-From-Home” Standard for U.S. Corporations? Google made headlines this week, in becoming the first corporation to formalize policy allowing its employees to work from home until at least July 2021. The decision will affect nearly all of Google’s approximately 200,000 employees, and was a decision made by CEO Sundar Pichai. Mr. Pichai ultimately chose this course of action in an effort to help families plan for the full school year, and even to allow employees to sign full-year leases if they decide to move. Judging from the migration patterns of many American workers away from cities and to the suburbs, these types of ‘work-from-home’ policies may accelerate the trend of people trickling away from urban centers. Google has so far been the only major U.S. corporation to take such bold action, but stay tuned for others who may follow their lead shortly.4
From
slowed economic recovery to the weakened dollar, it may be hard to find the
silver linings in the current crisis, but that doesn’t mean they aren’t there.
To help give you additional insight into how you can make the most of turbulent
times, I recommend reading our guide “Using Market Volatility to Your
Advantage.”5 This guide can help you learn about our insights,
based on decades of experience, about how a volatile market may be able to
actually help investors refine their strategies and potentially generate solid returns
over time.
You’ll get our ideas on:
If you have $500,000 or more to invest, download this free guide today by clicking on the link below.
Disclosure