Zacks Investment Management

Zacks Investment Management provides insight into the biggest news stories, and key factors that we believe are currently impacting the market such as:

• Is the Fed poised to accelerate the ‘Taper’?
• The U.S. housing market is still hot
• Status of the U.S. labor market

Is the Fed Poised to Accelerate the ‘Taper’? According to the Labor Department, the consumer price index (CPI) rose 5.4% year-over-year in September, which continues the trend of above-expectation inflation in the U.S. economy. Fed officials have stuck to the narrative that inflationary pressures will likely be ‘transitory’ as supply chain issues abate, but more recently Fed Chairman Jerome Powell and other Fed governors have been shifting their tone. On Friday of last week, Chairman Powell said explicitly that supply-chain disruptions would likely last longer than expected, and that the Fed “will need to make sure that our policy is positioned for a range of possible outcomes.” If that sounds like the Fed starting to hedge their ‘transitory’ position, it’s because they are – officials have now confirmed they will start reducing the $120 billion monthly QE purchases at their November 2-3 meeting, and some officials have suggested unwinding purchases faster while also moving up the potential timeline for higher rates. In our view, the equity markets have already priced in the reduction in monthly bond and mortgage security purchases, but a quicker timeline to raise the Fed funds rate may generate volatility in the short term. Minutes from November 2-3 will be telling.¹

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Avoid 8 of the Biggest Financial Mistakes

How can investors prepare for what’s to come while in a volatile market? There is no definite answer! However, you still have the opportunity to protect your investments and 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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Another Month, Same Headline: The U.S. Housing Market Stays Hot – Headlines often focus on issues with sticky inflation and snarled supply chains, but one area of the economy that has stayed hot virtually throughout the pandemic has been U.S. housing. Whether or not the strength of the housing market is a good thing depends largely on whether someone is a buyer or a seller. Many first-time homebuyers are having a particularly challenging time – the S&P CoreLogic Case-Shiller National Home Price Index soared almost 20% in August from a year earlier, with the median existing-home sales price up 13% year-over-year in September. Higher prices have in many cases led to higher-than-expected sales prices for sellers, but it has also reduced the share of first-time buyers in the market down to 28% – the lowest level since July 2015. As you can see from the chart of the national home price index below, prices have surged since the pandemic started, and have not let up since.³

What Data from the U.S. Labor Market is Telling Us – Jobless claims in the U.S. dropped to 290,000 last week, which marks a new low within this pandemic-influenced economy. Jobless claims are perhaps a better metric than the unemployment rate to consider when determining the health of the labor market, as claims serve as a proxy for layoffs. In 2019, a year when the U.S. economy was considered quite strong and before the pandemic struck, the weekly average for jobless claims was 218,000, meaning the U.S. economy is approaching a level of health in line with the previous expansion. Continuing claims, which measure how many people are still unemployed and receiving benefits, also fell to a pandemic low. As unemployment benefits eventually expire for those who are in the continuing claims category, a labor market with ample jobs awaits. In our view, we should continue to see improvement in the jobs market as a result.⁵

Retirement Mistakes to Avoid During Times of Uncertainty – While we can’t predict or control the future of the market, it is possible to stay focused on actions that can help guide your future investments. 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:

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