In this week\u2019s Steady Investor, we look at some of the current events that are shifting the market, such as:<\/p>\n\n\n\n
Debt Ceiling Deal is Reached, But Government Spending Doesn\u2019t Change Much \u2013 <\/strong>For weeks, Zacks Investment Management\u2019s position has been that the U.S. government would reach an agreement to lift or suspend the debt ceiling, putting the hysteria over a potential default to rest. While the deal seemed likely to come at the 11th<\/sup> hour, there was not a tenable scenario where the U.S. would be allowed to default on its debts. Doing so benefits no one. By a bipartisan vote of 314 to 117, the House passed a bill last week to suspend the debt ceiling until January 2025 in exchange for spending cuts totaling $1.5 trillion over 10 years (according to the Congressional Budget Office). For those keeping score, $1.5 trillion over a decade is not a significant amount of money relative to total U.S. GDP or government spending, but there was also a provision limiting spending growth to 1% past 2025 (though this can be altered). On the \u201cchopping block\u201d for spending was an approximately $20 billion reduction in spending for bolstering the IRS and an official end to the Biden administration\u2019s pause on student loan repayments. But taken together and thought of in aggregate, the trajectory of debt growth for the U.S. government is largely unchanged with the deal, and by some estimates would only reduce federal spending from its current baseline by about 0.2% of GDP over the next two years. The bill now heads to the Senate, where quick passage is expected.1<\/sup><\/p>\n\n\n\n Explore the Do\u2019s and Don\u2019ts of Stock Market Volatility<\/a><\/u><\/strong><\/p>\n\n\n\n Every investor understands the dread and anxiety of watching their investments take a turn when the market changes.<\/p>\n\n\n\n It is impossible to avoid volatility, but there are ways you can minimize the worst impacts of a volatile market. In our newest guide, \u2018The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em>\u2019 we provide recommendations for investors, based on 30 years of expertise. We also explore simple and effective steps investors can take to successfully navigate market ups and downs.<\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide today! China\u2019s Post- Zero-Covid Economic Resurgence Putters \u2013 <\/strong>Many expected that China\u2019s end of zero-Covid would result in an economic surge much like the experience in the U.S. and Europe. In the early weeks and months following the end of restrictions, signs indicated it was a distinct possibility. But data has puttered since \u2013 China\u2019s official purchasing managers index (PMI) for manufacturing activity fell to 48.8 in May, which indicates contraction. Services activity expanded, but we would note that May\u2019s reading marked a deceleration from April, which indicates an overall slowing of activity. China faces many structural problems that to date have not been fully appreciated, like a faltering property boom, a very high youth unemployment rate, weaker-than-expected consumption, and strained relationships with Western countries. In recent months, for instance, there has been a tit-for-tat with prominent U.S. companies like Micron Technology over manufacturing in China, and many U.S. manufacturers are re-evaluating their presence in China altogether. Earlier fears of China quickly overtaking the U.S. as the largest economy in the world is abating, at least for now.3<\/sup> <\/p>\n\n\n\n The Median Age in the U.S. Keeps Climbing, Posing Economic Challenges \u2013 <\/strong>Many developed countries around the world are facing a demographic problem, with aging populations and low birthrates. The U.S. is one of them \u2013 the number of babies born in the U.S. started falling 15 years ago, and it has not recovered in recent years. Economic problems stemming from the 2008 Global Financial Crisis are largely thought to have been at the root of the problem, but the economic recovery since has not brought with it an increase in births. In 2022, about 3.66 million babies were born in the U.S., which was flat from 2021 and is 15% below the peak reached in 2007. The result is an aging population \u2013 the median age in the U.S. was 35.2 in 2000, rising to 37.2 in 2010 and 39 according to 2022 U.S. Census Bureau data.4<\/sup><\/p>\n\n\n\n Overcoming Market Volatility \u2013 <\/strong>Some investors tend to panic and sell out of the market when uncertainty sets in.<\/p>\n\n\n\n
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Download Your Copy Today:\u00a0The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em><\/a><\/u><\/strong>2<\/sup><\/u><\/a><\/strong><\/em><\/p>\n\n\n\n