Zacks Investment Management

This week we saw – new developments in free trade, a natural gas dilemma in the U.S. and the Fed gearing up for their late July meeting. How could these stories impact the market? Read on to get the details…

The United States has a Natural Gas Dilemma – There was a time following World War II when the United States thought it was going to run out of natural gas. But with the fracking revolution came the discovery of vast natural gas reserves, so much that the U.S. has gone from being a net importer of natural gas to a net exporter – with almost too much to spare. In West Texas, drillers have so much excess natural gas that they often have to burn it just to get rid of it, and the amount they burn each day could fuel every home in the state. Earlier this spring, the price of natural gas in Midland, TX (a production hub) dropped to negative $9 per million BTUs – meaning producers were actually paying customers to take the gas. At the root of the natural gas problem is lack of infrastructure to move natural gas around the country. Relying on an old, and often too small, set of pipelines leads to delivery issues. There is also stout resistance to building new pipelines, which results in the natural gas market often enduring wild price swings depending on shifting seasons and demand.¹

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Know where you stand in terms of your long-term investment goals!
 
While you cannot predict exactly how these stories will pan out or how they could affect the market, you can try to prepare for what’s to come. And, knowing your net worth is a great place to start as it is critical to your financial well-being and can help you prepare for what’s ahead.
 
If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.² Simply click on the link below to get your copy today!
 
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A Near Victory for Free Trade – As the world’s two biggest economies – the U.S. and China – engage in an ongoing trade dispute, the world’s fastest growing continent – Africa – took steps towards creating a $3.4 trillion free trade bloc. Known as the African Continental Free Trade Area (AfCFTA), the trade deal spans 55 African nations and would be the largest free trade area established since the creation of the World Trade Organization back in 1994. The 55 nations have agreed in principle to eliminate tariffs on most goods passing through the area, which is estimated to increase trade by 15% – 25%. The International Monetary Fund describes the free trade zone as a potential “economic game changer,” but challenges remain. Of top concern is needed improvements to Africa’s infrastructure to improve transportation of goods and cut down on delivery times. As it stands today, 54 of the 55 African states have signed on, but only about half have ratified the deal. Talks will continue this weekend in Ghana.³

Fed Chairman Jerome Powell Testifies – All eyes are on the Federal Reserve this month, as the market looks forward to the late July meeting where a rate cut is very much on the table. In remarks made to Congress this week, Fed Chairman Jerome Powell said that the U.S. economic outlook has not improved since his last comments, signaling that the Fed may be poised to cut rates by 25 points at their next meeting. Almost half of the 17 Fed officials who participate in the committee for setting rates have commented that the U.S. economy will likely need a rate cut at least by the end of the year. Mr. Powell enjoyed bipartisan support for the job he has done so far running the Fed, even though he has endured much criticism from President Trump.⁴

Fallout for Boeing and the 737 MAX – The fallout from Boeing’s 737 MAX crash on Ethiopian Airlines continues. The airplane manufacturer reported that commercial-jetliner deliveries fell by over a third in the first half of 2019 from a year earlier, and to make matters worse Boeing has not received a single order for the 737 MAX in three straight months. During this challenging patch for Boeing, their French rival Airbus has seen increased production and orders, and is set to deliver a record number of jets in 2019. If Boeing continues to stagnate as Airbus grows, it’s possible that the French rival could overtake Boeing as the largest plane maker in the world. The 737 MAX remains grounded.⁵

While we may not know how all these stories will pan out, or how they could affect the market in the long-term, knowing your net worth can be critical to your financial well-being and can help you prepare for what’s ahead.

Calculating your net worth may give you a better idea of where you stand in terms of your long-term investment goals. If you do not currently know your net worth, then now may be a great time to calculate it.

If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.⁶  Simply click on the link below to get your copy today!

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