With the recent news and headlines surrounding the current state of the market, we are taking a deeper dive into key factors that we believe investors should keep an eye on, such as:
The International Monetary Fund Sees Global Economic Slowdown – In January of this year, the International Monetary Fund (IMF) projected the global economy would grow 4.4% in 2022, a marked slowdown from the 6.1% pace posted in 2021. But then the war in Ukraine happened, creating knock-on inflationary effects across the global economy, particularly in the realm of food and energy. By last week, the IMF had cut its growth forecast for the global economy by 0.8% down to 3.6%, and it also significantly cut its growth forecast for China down to 4.4% for 2022. China has locked down major cities in response to a Covid-19 outbreak and its zero Covid policy, which has shuttered factories and led to a slowdown in manufacturing and services activity in the world’s second-largest economy. Overall, the IMF lowered its growth forecasts mostly due to the war in Ukraine, which at this stage appears likely to remain a regional conflict. In our view, there are two takeaways for investors when it comes to IMF global growth predictions. The first is that even with reduced growth forecasts, the base case is for relatively strong global growth in 2022. The second observation is that reducing growth forecasts has the effect of lowering the bar for the global economy to surprise to the upside. The souring sentiment makes positive surprises easier, which tends to be good for equity markets, in our view.1
Here Are 4 Ways to Protect Your Retirement from Rising Inflation!
It’s no secret that inflation is rising, and one group that it’s affecting heavily is retirees. Rising inflation can be very costly for the economy, but what can investors, especially those nearing retirement, do to keep their investments afloat?
Instead of panicking when emotions are high, take a look at steps that could help reduce the sting of inflation. To help, we’re offering our exclusive guide, 4 Ways to Protect Your Retirement from Rising Inflation. You will get insight on:
If you have $500,000 or more to invest, get our free guide today!
The State of the U.S. Housing Market – The U.S. housing market has been hot for the last two years, as the Covid-19 pandemic opened the door to remote and hybrid work and led many people to seek out homes with home office space and more room than can be found in cities. Home sales jumped in 2021 to their highest level since 2006 when subprime mortgages flooded the market. Ever-increasing demand with limited inventory has also pushed prices to new records, with median existing home prices in the U.S. reaching an all-time high in March. But in the current environment, mortgage rates have jumped to a decade-high, crossing the 5% mark and moving many would-be buyers to the sidelines given the higher cost of borrowing to ultimately pay for a home whose price has never been higher. Signs are starting to appear that existing home sales are cooling to record 2021 levels, with March seeing a 2.7% dip from February. Purchase mortgage application volume was also down 14% from last March levels, according to the Mortgage Bankers Association.3
U.S. Consumers Have a Love-Hate Relationship with the Economy – Of the many surveys measuring consumer sentiment and how people feel about the direction the economy is headed, the conclusions are usually clear – Americans do not feel great. But what U.S. consumers say, versus what they do, appears to be two very different things. In Q1 earnings reports, big banks highlight how much their customers are spending on credit cards, and the data is also clear – consumers are spending at brisk levels despite being unhappy about the economy. Citigroup credit card spending shot up 23% in Q1. For Wells Fargo, it was 33% higher, and for JPMorgan Chase, credit card spending soared by 29%. Increasing credit card spending does not necessarily translate to higher household debt loads, either, which are historically low by the measure of debt servicing ratios (how much interest paid represents a percentage of total income). Americans’ souring feelings about the economy are not necessarily capturing the higher wages and strong employment prospects many are feeling in the economy, which is arguably driving the higher spending in the first place.4
Don’t Let Inflation Destroy Your Retirement Assets – Are you worried about inflation and its impact on your investments? Don’t panic! Inflation may be rising, but there are steps you can take to prevent it from affecting your long-term investments!
Even during difficult times when emotions are running high, we recommend taking a look at steps that could help reduce the sting of inflation. To help, we’re offering our exclusive guide, 4 Ways to Protect Your Retirement from Rising Inflation3. You will get insight on:
If you have $500,000 or more to invest, get our free guide today!
Disclosure