Private Client Group

May 9th, 2022

Job Openings and Quits Hit Record, Fed Raises Rates, Mortgage Rates Climb

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With all the recent news and headlines surrounding the current state of the market and increased volatility, we are taking a deeper dive into key factors that we believe investors should keep an eye on, such as:

Job Openings and Job Quits Both Reach New Records – It is possible that the U.S. economy is currently producing one of the best job-seeking markets in history. The Labor Department reports that there were 11.5 million job openings in March, and private-sector estimates show that demand in the labor markets remained very strong in April. The highest rate of job openings can be found in the services sector, notably in hospitality and food services. Finding a job in healthcare is also pretty easy for qualified candidates. All told, the number of jobs available in the economy is at a record high, with nearly two open jobs for every one unemployed person. Perhaps, for this reason, U.S. workers are also quitting their jobs at a record pace, knowing that plenty of jobs are available and some of them may offer better pay. In March, 4.5 million Americans quit their jobs, which is also a record for the U.S. economy.1

4 Steps to Prepare for Retirement Amid Rising Inflation & Recession Concerns

During times like these when inflation and recession worries are high, do you know that with the right guidance, retirement planning doesn’t have to be a difficult process?

When the headlines focus on ‘worrisome stories,’ it’s easy to get caught up in short-term decision marking. Instead of falling into this trap, here are some important factors that investors should consider before retirement:

Considering these factors can be a daunting task, but there are four simple steps that can help you plan for retirement! If you have $500,000 or more to invest, get the scoop on these simple steps with our guide. Click on the link below to get your copy today:
 
Download “4 Steps to Managing Your Retirement Assets!”2

Will a European Ban on Russian Oil Cause a Recession? European countries have been actively discussing a phased-in ban on Russian oil, with the likelihood of an embargo rising as the war goes on. That has Europe scrambling to secure supply from elsewhere in the world, which could benefit the U.S., Africa, the Middle East, and Asia. This process of diversifying supply is already underway – European imports of non-Russian oil reached their highest level since early 2020, and Germany said that only 12% of its oil imports come from Russia. That number was 35% earlier this year. The question weighing on Wall Street is whether Europe’s ban could lead to a self-inflicted recession. Eurostat reported slower-than-expected growth for the eurozone in Q1, with the GDP print showing 0.2% growth quarter-over-quarter. Given its status as a net energy importer, Europe has high exposure to energy market disruption. But in our view, a recession is not necessarily assured – the ban is likely to happen in increments, and oil markets are global. Europe may be able to effectively find substitutes over time.3

Mortgage Rates Climb to the Highest Level in Over a Decade – In the wake of the pandemic when the Federal Reserve took extraordinary measures to support the economy, mortgage rates fell to historically low levels. In July 2020, the average rate on a 30-year fixed mortgage dipped below 3%, for the first time in history. The mortgage market is changing fast. With the Federal Reserve’s pivot to hawkish policy and the announcement of plans to trim the Fed’s $9 trillion balance sheet next month, upward pressure is being applied to interest rates and it has pushed mortgage rates to their steepest increase in decades. Prospective homebuyers who received mortgage quotes at the beginning of the year often saw rates below 3%. Today, quoted rates are closer to 6%. Homebuyers are trying to mitigate the blow of higher rates by paying fees to cut interest rates or making higher down payments, to finance less.4

The Federal Reserve Raises Rates by a Half Percentage Point – In a largely expected move, the Federal Reserve raised the benchmark fed funds rate by a half-percentage point this week. The Fed also announced plans to start shrinking its $9 trillion balance sheet starting next month, which could remove some demand from Treasury markets and result in further upward pressure on rates. The stock market exhibited pronounced volatility in the days following the announcement, as investors priced-in the longer-term effects on the economy. One positive takeaway from the Fed announcement was Chairman Powell’s message that three-quarter percentage-point increases were largely off the table. The market had previously been pricing in a 95% possibility of a bigger rate increase in June.5

Managing Your Retirement Assets During a Potential Recession – Are fearful headlines in the media (regarding inflation and a potential recession) causing you to worry about your next investment decision for retirement?

If so, I recommend that investors who are nearing retirement go through four steps that are outlined in our exclusive guide, “4 Steps to Managing Your Retirement Assets6.” This guide will help give you some ideas for how to transition into retirement with confidence. You will also read how to:

Considering these factors can be a daunting task, but there are four simple steps that can help you plan for retirement! If you have $500,000 or more to invest, get the scoop on these simple steps with our guide. Click on the link below to get your copy today:

Disclosure

1 Wall Street Journal. May 3, 2022. https://www.wsj.com/articles/job-openings-us-growth-labor-market-turnover-march-2022-11651529531?mod=djemRTE_h

2 ZIM may amend or rescind the “4 Steps to Managing Your Retirement Assets” guide for any reason and at ZIM’s discretion.

3 Wall Street Journal. May 2, 2022. https://www.wsj.com/articles/germany-calls-for-russian-oil-embargo-as-eu-prepares-new-sanctions-11651488395?mod=djemMoneyBeat_us

4 Wall Street Journal. May 2, 2022. https://www.wsj.com/articles/home-buyers-are-finding-ways-to-take-the-sting-out-of-rising-mortgage-rates-11651445773?mod=djemRTE_h

5 Wall Street Journal. May 5, 2022. https://www.wsj.com/livecoverage/federal-reserve-meeting-inflation-rate-may-2022?mod=article_inline

6 ZIM may amend or rescind the “4 Steps to Managing Your Retirement Assets” guide for any reason and at ZIM’s discretion.


DISCLOSURE

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.

Any projections, targets, or estimates in this report are forward looking statements and are based on the firm’s research, analysis, and assumptions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties. Zacks Investment Management does not assume any responsibility for the accuracy or completeness of such information. Further, no third party has assumed responsibility for independently verifying the information contained herein and accordingly no such persons make any representations with respect to the accuracy, completeness or reasonableness of the information provided herein. Unless otherwise indicated, market analysis and conclusions are based upon opinions or assumptions that Zacks Investment Management considers to be reasonable. Any investment inherently involves a high degree of risk, beyond any specific risks discussed herein.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor’s. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. The volatility of the benchmark may be materially different from the individual performance obtained by a specific investor. An investor cannot invest directly in an index.
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