Private Client Group

July 9th, 2019

Trade truce, banks declared healthy, skilled workers needed

Share
Subscribe

We hope you are enjoying your 4th of July weekend! To add to the celebration, this week we saw several positive developments such as a trade truce, developments in job training and, for the second time in 10 years, all major banks passing the Federal Reserve’s stress tests. Read on to get the details.

Trade Truce, For Now – At the G20 Summit in Japan last weekend, President Trump and Chinese President Xi Jinping calmed the markets by announcing a ‘trade truce,’ whereby the two sides would return to trade negotiations and the U.S. agreed to ease restrictions on Chinese companies wishing to purchase high-end technology equipment from U.S. companies. On the Chinese side, they agreed to increase purchases of U.S. agricultural goods in an effort – albeit a modest one – to cut the trade deficit. But perhaps the best news to come from the summit was the U.S. agreeing to suspend, indefinitely, the new tariff increase to 25% on billions of Chinese goods.1

Job Training Crucial in the Modern Economy – As the U.S. economy continues to expand and add new jobs, there is growing awareness of a major issue in the labor market: The number of job openings in the U.S. now outnumbers the number of unemployed Americans – by a staggering 1.625 million. The reason: Many of these new jobs involve specialized skills or specialized training, which low skilled Americans simply do not have. To address this problem, new training is required and programs are needed to push Americans further up the skilled labor pool. Apprenticeships are one approach to solving the problem – classroom education combined with on-the-job training for skilled positions. For some time, the federal government ran apprenticeship programs through the Labor Department, but the Trump Administration is pushing a proposal to allow business groups, colleges, and other entities to take the reins. The success of these types of apprenticeships and job training could be crucial to long-term growth trajectories and labor force participation in the United States.2

____________________________________________________________________________________________

Do You Know How These Economic Indicators Could Affect Your Investments?

It can be challenging as an investor to stay on top of all the important news stories and economic indicators that shape the market.

You don’t need to become an expert. However, having a grasp of key economic and financial statistics—from the inflation rate to the new corporate tax rate—can provide insight into how key variables might influence your returns, and could potentially help you reach your financial goals with more confidence.

If you have $500,000 or more to invest, get our free guide, 6 Essential Concepts to Help You Pursue Investing Success.3 It’s a valuable resource that walks you through influential data, from the unemployment rate to corporate earnings, and our views on how these factors could affect your investments.

Download Our New Guide – 6 Essential Concepts to Help You Pursue Investing Success

___________________________________________________________________________________________

All Major Banks Pass Stress Tests – For only the second time in 10 years, all 18 major U.S. banks passed the second round of the Federal Reserve’s stress tests, the annual exercise used to determine if banks are sufficiently capitalized to withstand a major U.S. downturn. The standards for passing the tests are fairly stringent – banks are tested to see if they could withstand a 50% decline in stock prices plus 10% U.S. unemployment after they’ve increased share buybacks and dividends. The positive results are a sign that U.S. banks are now in their strongest financial position since prior to the Great Recession, and it also clears banks to return profits to shareholders through increased dividends or more share buybacks.4

In addition to keeping up with relevant news stories, it is important to understand key economic indicators and financial statistics that could influence your investments.

From the inflation rate to the new corporate tax rate, insight on these factors can help you better understand how these variables might influence your returns, and could potentially help you reach your financial goals with more confidence.

If you have $500,000 or more to invest, get our free guide, 6 Essential Concepts to Help You Pursue Investing Success.5 It’s a valuable resource that walks you through influential data, from the unemployment rate to corporate earnings, and our views on how these factors could affect your investments.

Disclosure


1 The Wall Street Journal, June 29, 2019. https://www.wsj.com/articles/trump-says-he-is-set-to-discuss-huawei-with-xi-11561769726?mod=djem10point

2 The Wall Street Journal, June 24, 2019. https://www.wsj.com/articles/trump-administration-proposes-new-type-of-apprenticeship-11561384506

3 ZIM may amend or rescind the guide “6 Essential Concepts to Help You Pursue Investing Success” for any reason and at ZIM’s discretion.

4 The Wall Street Journal, June 27, 2019. https://www.wsj.com/articles/federal-reserve-approves-big-banks-to-boost-payouts-to-investors-11561667401?mod=djem10point

5 ZIM may amend or rescind the guide “6 Essential Concepts to Help You Pursue Investing Success” 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.
READ PREVIOUS
Fireworks, tariffs and the trade war with China
READ NEXT
Global bond yields are bottoming out

Explore Zack’s Archives

View
Mitch's Mailbox
May 15th, 2024
Is Social Security About To Run Out Of Money?
Read more
Private Client Group
May 13th, 2024
April Jobs Report, E-Commerce And Brick-And-Mortar, China Exports Surge
Read more
Mitch on the Markets
May 13th, 2024
Q1 Earnings Season Came In Strong. Why Is No One Talking About It?
Read more
Mitch's Mailbox
May 8th, 2024
Sell In May And Go Away?
Read more
Private Client Group
May 6th, 2024
Fed Holds Rates Steady, A Closer Look At Q1 GDP, High Cost Of A Sweet Tooth
Read more
Mitch on the Markets
May 6th, 2024
The “Wall Of Worry” Is Growing Again
Read more

Daily financial tips directly
from the Zacks family.

Top

Search

Contact

I'm a Private Client I'm a Financial Professional