In today\u2019s Steady\nInvestor, we focus on current events and factors that we believe are currently shifting\nthe market, such as:<\/p>\n\n\n\n
U.S. Trade Deficit\nSoars to Record \u2013 <\/strong>The U.S. balance of trade measures how much the country\nimports versus how much it exports. A trade deficit indicates more imports than\nexports, and a trade surplus indicates the opposite. In 2021, the U.S. trade\ndeficit hit a new all-time high of $859.1 billion, having increased 27% from\nlast year. Some believe that trade deficits are negative since the country is\nbuying far more goods and services than it is selling. But that is not\nnecessarily the case \u2013 what matters is total\ntrade<\/em>, which gives the most accurate indication of whether economic\nactivity, on the whole is increasing. It is \u2013 U.S. exports also soared last\nyear by 18.5%, reaching $394.1 billion. As the U.S. economy continues to\nrebound from the pandemic and expand further, total trade is rising \u2013 a good\nsign. Robust global demand for goods like computers, furniture, apparel,\nenergy, and food are driving trade activity higher.1<\/sup><\/p>\n\n\n\n How to Use a Volatile Market to Your Advantage!<\/a><\/strong><\/p>\n\n\n\n It\u2019s a challenge for investors to manage market volatility. Volatility\ncan result in discomfort, fear and uncertainty, but as we wait for volatility\nto ease, we recommend that investors learn about the positives that can come\nwith 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 and learn our insights, based on decades\nof experience, about how a volatile market may be able to help investors refine\ntheir strategies and potentially generate solid returns over time.<\/p>\n\n\n\n Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n Inflation Pushes Even\nHigher, to a 40-Year High \u2013 <\/strong>Inflation keeps going up. In January, the\nconsumer price index (CPI) jumped at a 7.5% annual rate, which placed it at a\n40-year high. For the last five months, inflation has been running at a 5%\nannual rate or higher, as continued strong demand bumps up against supply\nconstraints and labor shortages. Every month, the CPI rose 0.6% from December\nto January, consistent with the monthly increase from November to December.\nBreaking down the inflation figures, it was the usual suspects driving prices\nhigher. Used-car prices soared 40.5% in January from a year ago, and energy\nprices also continue to chart higher with a barrel of crude oil topping $90 a\nbarrel. Food prices also increased 7% year-over-year in January, the largest\nincrease since 1981. Inflationary pressures are expected to wane as supply\nconstraints ease and as consumers shift spending to services from goods, but it\nmay be a few months still before inflation rates come down.3<\/sup><\/p>\n\n\n\n Are Rising Interest\nRates Good News for Savers? <\/strong>Not necessarily. The Federal Reserve has\ntelegraphed their plans to increase the fed funds rates likely a few times in\n2022, and many savers were hoping that would also mean earning higher deposit\nrates at banks. But that may not be the case. Generally speaking, banks will\nraise the interest they pay on deposits when they are trying to build up cash\nreserves, which they can in turn use to finance loan activity. But in the\ncurrent environment, banks are not strapped for cash \u2013 at all. Because of bank\nreserve requirements in the aftermath of the 2008 Financial Crisis, combined\nwith Americans\u2019 boosting savings in the pandemic due to stimulus checks, banks\nare flush with cash. Total deposits at U.S. commercial banks stand at $18.1\ntrillion, which is substantially higher than the $13.3 trillion they had on\nhand before the pandemic in early 2020. As it were, banks have little incentive\nto raise the interest rates they pay on deposits, at least for now.4<\/sup><\/p>\n\n\n\n The Jobs Market is\nEven Stronger Than Many Thought \u2013 <\/strong>As has often been the case in the last\nfew months, the U.S. jobs numbers as originally reported were way off. The\nBureau of Labor Statistics changed its estimate for how to account for seasonal\npatterns as part of monthly employment, given the effects of the pandemic. The\nresult has been a substantial underreporting of job growth in the U.S. economy.\nEmployment in January grew 467,000 from December, which was three times Wall\nStreet\u2019s official consensus. But the big revision came from the November and\nDecember 2021 figures. December job growth was revised from 199,000 to 510,000,\nwhile November was changed from 249,000 to 647,000. The Omicron variant\ncertainly led to snags in the labor market with people out sick in January, but\nthe job growth over the previous few months has been staggering and adds to an\noverall strong 2021. The labor force expanded by 1.2 million in December, and\nlabor force participation ticked up to 62.2%, the highest rate since early\n2020.5<\/sup><\/p>\n\n\n\n The Silver Linings in a Volatile Market \u2013 <\/strong>It\nmay be hard to find the silver linings in this current market, but that doesn\u2019t\nmean they aren\u2019t there. To help give you additional insight into how you can\nmake the most of turbulent times, I recommend reading our guide \u201cUsing Market\nVolatility to Your Advantage.\u201d6<\/sup><\/p>\n\n\n\n This guide can help you learn about our insights, based on decades of experience, about how a volatile market may be able to help investors refine their strategies and potentially generate solid returns over time. U.S. imports and exports both soaring, higher interest rates not paying for savers, supply-demand imbalance pushes inflation to new highs<\/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-10165","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\/10165","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=10165"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10165\/revisions"}],"predecessor-version":[{"id":10199,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/10165\/revisions\/10199"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=10165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=10165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=10165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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You\u2019ll get our ideas on how market volatility can \u201cshake up\u201d complacent investors, why volatility may help prevent overheating and market \u201cbubbles\u201d and more. If you have $500,000 or more to invest, download this free guide today by clicking on the link below.<\/p>\n","protected":false},"excerpt":{"rendered":"