Zacks Investment Management

In today’s Steady Investor, we dive into key factors and current events that we believe are influencing the current market, such as:

• More signs of another debt ceiling showdown
• Potential break in higher oil and gas prices
• Record-shattering housing market shows signs of cooling
• Workers’ upper hand may not last

Get Ready for Another Debt Ceiling Showdown – On Wednesday, Treasury Secretary Janet Yellen testified before a Senate panel and delivered a message we’ve heard time and again over the last decade: the U.S. government is running out of room to pay its bills, and Congress needs to act to raise the debt ceiling to meet the country’s obligations. The Treasury Secretary added that the pandemic and related spending has made it challenging to calculate when the Treasury would run out of funds, but that the current date of July 31, 2021 (when the pandemic-induced suspension of the debt ceiling expires) means Congress needs to act. This largely political song-and-dance has played out many times in recent history, and Congress has consistently raised or suspended the debt ceiling, often at the 11^th hour. The risks of not taking action soon are the same as they’ve been in the past: the U.S. missing payments to bondholders, Social Security recipients, or even Medicare/Medicaid payments. A strong economic recovery could boost tax receipts and provide a cash cushion longer than the July 31 deadline, but Congress also leaves for recess from the end of July to September. Financial markets need a resolution on this issue soon, while the media is hoping for a showdown.

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8 Costly, Financial Mistakes That You Can Avoid!

Living the ultimate retirement is the goal for many investors, but some may be wondering how to better plan for it. There is no definite answer, especially while investing in a volatile market like the one we’re currently experiencing. It is possible, though, to better prepare for any given financial situation.
 
While there are many unknowns at present, we believe there are eight common mistakes that many investors make when planning for retirement. In our guide, 8 Retirement Mistakes to Avoid, we outline these mistakes and how you can potentially avoid them.
 
If you have $500,000 or more to invest and want to learn more, click on the link below to get your free copy:
 
Learn About the 8 Retirement Mistakes to Avoid!²

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Higher Oil and Gas Prices Could Potentially Get a Respite – Crude oil prices (chart below) have rebounded swiftly from pandemic lows, as demand returns to the global economy and growth takes off in the U.S. and China. Oil prices have reached up past $70 a barrel, which marks a multi-year high and has put pressure on gas prices across the country. Demand has returned to the global economy and the U.S. faster than supply has kept up, hence the price pressures. Last year, OPEC+ cut output by 9.7 million barrels a day but have only retraced about 4 million barrels of that production since. OPEC+ and its allies are meeting this week to consider increasing the group’s output further, likely to take advantage of higher prices while also not flooding the market with supply.³

Housing Market Shatters Records, But Showing Signs of Cooling – The U.S. housing market is all over the news, and we have covered it several times in this space. There’s good reason for all the coverage – home prices continue charting new highs. In May, the median existing-home price crossed $350,000 for the first time ever, marking a 23.6% jump from the previous year. It was only 11 months ago that the median existing-home price topped $300,000 for the first time, underscoring the sharp price pressure as many urban workers migrated around the country and bought homes for remote work setups. Prices are also being pressured higher by persistently low mortgage rates, and a fairly drastic supply/demand imbalance (where demand far outweighs the supply of homes). There are signs that the wave of activity in the housing market is starting to cool off, however. In May, sales of existing homes fell 0.9%, which was the fourth consecutive month of declines. The market is approaching a point where new homebuyers are priced out.⁵

Workers Have the Upper Hand. Will It Last? The jobs market is roaring back to life, but there’s only one issue: there are not enough interested workers to fill job vacancies. This dynamic is giving workers the upper hand, at least for the moment. Average weekly wages in leisure and hospitality – where hiring is robust – were up 10.4% in May compared to February 2020, before the pandemic hit. Blue-collar and low-skill workers are seeing some of the biggest increases. High school diploma workers are seeing faster wage increases than those with a college degree. This shift marks a reversal of longer-term trends, which have seen wages and benefits fall as a share of national income over the last few decades. Wage pressures and the unique setup where there are more open jobs than workers willing to fill them may only prove temporary, however, and leverage could shift back to business once the initial surge of economic growth runs its course.⁶

Retirement Mistakes to Avoid During Times of Uncertainty – The future of the market is completely unpredictable, but keep your eye on the end goal – financial success! Even in times of uncertainty, it is possible to stay focused on actions that can help guide your future investments.

To start, there are common mistakes and habits that we believe can help some investors succeed while others fail. Don’t fall prey to common investing mistakes!
 
To help you understand some of these mistakes and how to avoid them, we have created the guide, 8 Retirement Mistakes to Avoid.⁷ In this guide, we provide our thoughts on what we believe are 8 of the biggest retirement mistakes investors should avoid. If you have $500,000 or more to invest and want to learn more, click on the link below:

Disclosure