- Will Housing Prices Continue to Rise?<\/strong><\/li><\/ul>\n\n\n\n
The U.S. housing market is on pace for its strongest sales\nyear since 2005, and prices continue to push higher. In October, existing-home\nsales increased 0.8% from September and also notched a 13.1% increase in prices\nfrom a year earlier \u2013 the median existing-home now sells for around $353,900, a\nrecord. The frenzied pace of home-buying in 2021 came as many workers were\ngiven the option of working remote full-time or from home for certain days of\nthe week. This shift to remote work and\/or \u2018hybrid work\u2019, combined with\npersistently low mortgage rates and higher savings, nudged many first-time\nhomebuyers to relocate out of cities and to suburbs for more space and remote\nwork set-ups. Surging demand was met with limited inventories and a realization\nthat homebuilders have been underinvesting over the last several years. The\nquestion of whether home prices will continue to rise in 2022 depends on how\nthe supply\/demand dynamic shakes out \u2013 homebuilders are currently ramping up projects,\nand the manufactured housing industry has indicated it is on pace to deliver\nmore than 100,000 new homes for the first time since 2006. Demand may ease a\nbit as much of the pandemic-induced reshuffling has taken place, and as\npotential homebuyers are turned off by higher prices and potentially higher\ninterest rates in the new year.1<\/sup><\/p>\n\n\n\n
_________________________________________________________________________<\/p>\n\n\n\n
What Should You Do in a Volatile Market?<\/a><\/strong>\u00a0<\/a><\/p>\n\n\n\n
The future of the market could be affected by many current events,\nbut in such volatile times, the key is not to panic. We recommend finding a way\nto navigate through market volatility! <\/p>\n\n\n\n
If you have $500,000 or more to invest, get our free guide, \u201cUsing\nMarket Volatility to Your Advantage,\u201d<\/em> and learn our insights, based on\ndecades of experience, about how a volatile market may be able to help\ninvestors refine their strategies and potentially generate solid returns over\ntime.
\n
\nYou\u2019ll get our ideas on:<\/p>\n\n\n\n- How market volatility can \u201cshake up\u201d complacent investors<\/li>
- Potential bargains that may be uncovered through turbulence<\/li>
- Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>
- What history shows us about opportunities for steady investors in turbulent markets<\/li>
- Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n
Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n
_________________________________________________________________________<\/p>\n\n\n\n
- What\u2019s Next for the Energy Sector?<\/strong><\/li><\/ul>\n\n\n\n
Most readers are probably very aware: energy prices are on\nthe rise, from the cost of natural gas to heat a home to the price at the pump.\nAs was the case in the U.S. housing market, the forces of supply and demand are\nlargely to blame for higher energy prices. As the U.S. emerged from the worst\nof the pandemic, demand surged and inventories were low \u2013 driving up the price\nin the process. Generally speaking, higher prices should self-correct over\ntime, i.e., oil and gas producers generally respond to higher prices by adding\nmore supply, putting downward pressure on price. We\u2019re starting to see oil\nproduction rise globally, but companies are a bit reluctant to turn on the\nspigots full steam. Oil and gas companies are feeling some pressure from\nshareholders to gradually increase supply to not reverse the price trend, and\nOPEC is in no hurry to flood the global market with supply. Even still, we\u2019ve\nnoted that supply is trending in the right direction, while demand is likely to\nremain firm in the short-to-medium term. The equity markets should not be too\ntroubled by higher prices in the interim. As you can see from the chart of gas\nprices (top) and crude oil prices (bottom), the U.S. economy has absorbed\nhigher prices before.3<\/sup><\/p>\n\n\n\n
![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/pic1-5-1024x395.png\")
Source: Federal Reserve Bank of St. Louis4<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n ![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/pic2-4-1024x395.png\")
Source: Federal Reserve Bank of St. Louis5<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n - How\nAggressive Will the Federal Reserve Be in 2022?<\/strong><\/li><\/ul>\n\n\n\n
Federal Reserve Chairman Jerome Powell will likely be confirmed for a second term. His first term was characterized by very gradual tightening late in President Trump\u2019s term, followed by a fully dovish turn when the pandemic struck. Looking ahead to 2022, the Fed Chairman may be confronted by the need to tighten again \u2013 the question is, how quickly? Inflation readings have been consistently high over the last few months, and employment remains about 4 million jobs below its pre-pandemic peak. The Fed\u2019s narrative of inflation being \u2018transitory\u2019 has run into snags with a clogged supply chain being further strained by firm U.S. consumer demand. The Fed has already telegraphed plans to reduce bond and mortgage security purchases (QE) in the months ahead, and the big question for 2022 will be how quickly and aggressively the Fed will need to raise interest rates to counter inflationary pressures. In our view (see next point on inflation), the Fed may not need to move faster-than-expected in raising rates and tightening policy, as supply chain issues should eventually resolve and as the U.S. labor market continues to improve. If employment and inflation trend in the right direction, there will be less pressure on the Fed to act.6<\/sup><\/p>\n\n\n\n
- Is Inflation Here to Stay?<\/strong><\/li><\/ul>\n\n\n\n
Inflation is generally defined as too much money chasing too\nfew goods, which near-perfectly sums up the current situation in the U.S.\nWhether inflation is here to stay depends on two factors, then: will U.S.\nconsumer demand remain this strong and perhaps get stronger, and will the U.S.\nand global producers and service providers be able to ramp up supply to meet\ndemand? In our view, demand is likely to remain strong and supply should see\nimprovements, too. \u201cToo few goods\u201d is\nfixable, in other words, and we should see more improvement on the supply side\nof the equation in 2022. In fact, global supply chain issues are already\nshowing signs of getting better, as Covid-driven factory closures and energy\nshortages in Asia have abated recently. Ocean freight rates have also fallen\nfrom highs. Major retailers in the U.S. have also reported having more than\nenough for the holiday shopping season, in a sign that many were able to\ncircumvent the worst of the supply chain crisis, congested ports, and a\nshortage of U.S. truck drivers. The widespread concern and worry remain higher,\nhowever, which tends to make us bullish. The reason is simple: when everyone is\nfixated on an issue and it becomes widely discussed, its pricing power\nconcurrently falls, in our view. This is how \u201cwalls of worry\u201d get built.7<\/sup><\/p>\n\n\n\n
This is one reason why investors should never let negative news\nheadlines or fears of the unknown impact their investing decisions. Instead, I\nam offering all readers our guide \u201cUsing Market Volatility to Your Advantage\u201d8<\/sup>.\nThis guide can help you learn about our insights, based on decades of\nexperience, about how a volatile market may be able to help investors refine\ntheir strategies and potentially generate solid returns over time.
\n
\nYou\u2019ll get our ideas on:<\/p>\n\n\n\n- How market volatility can \u201cshake up\u201d complacent investors<\/li>
- Potential bargains that may be uncovered through turbulence<\/li>
- Why volatility may help prevent overheating and market \u201cbubbles\u201d<\/li>
- What history shows us about opportunities for steady investors in turbulent markets<\/li>
- Plus, more ways you may be able to benefit from a volatile market<\/li><\/ul>\n\n\n\n
If you have $500,000 or more to invest, download this free guide\ntoday by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"
Housing and energy prices on the rise, the Fed Chairman plans for second term, labor shortages could persist into 2022<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-10012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10012","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=10012"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10012\/revisions"}],"predecessor-version":[{"id":10250,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10012\/revisions\/10250"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=10012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=10012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=10012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Is Inflation Here to Stay?<\/strong><\/li><\/ul>\n\n\n\n
- How\nAggressive Will the Federal Reserve Be in 2022?<\/strong><\/li><\/ul>\n\n\n\n
- What\u2019s Next for the Energy Sector?<\/strong><\/li><\/ul>\n\n\n\n