{"id":7768,"date":"2018-10-01T18:53:11","date_gmt":"2018-10-01T18:53:11","guid":{"rendered":"http:\/\/zackspcg.com\/blog\/?p=7768"},"modified":"2022-02-26T13:15:15","modified_gmt":"2022-02-26T13:15:15","slug":"does-investor-confidence-mean-a-bullish-or-bearish-signal","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/does-investor-confidence-mean-a-bullish-or-bearish-signal\/","title":{"rendered":"Does Investor Confidence Mean a Bullish or Bearish Signal?"},"content":{"rendered":"

The market is currently hitting all-time highs while consumer confidence is up. But, what does this truly signal for the market \u2013 is it bearish or bullish?<\/em> Read on to get the details\u2026<\/p>\n

All-Time Highs \u2013 <\/strong>the trade and inflation worries that seemed to weigh down the markets in the first half of the year have seemingly subsided, with the market now hitting all-time highs.1<\/sup> We would argue that there was an interesting tug-of-war in the first quarter as the corporate tax cuts sent earnings soaring but stock prices remained volatile as a result perhaps of trade and global economic uncertainty. Now that the market has had time to price-in the true nature of the \u2018trade war,\u2019 perhaps those worries have subsided.<\/p>\n

Oil Prices on the Rise \u2013 <\/strong>oil prices hit their highest close in nearly four years last week, climbing over $80 a barrel after OPEC members decided not to raise production. At the center of OPEC discussions is what to do after the new U.S. sanctions banning Iranian oil take effect in November, with some members arguing that they want to see a rise in demand before increasing production. The message from OPEC seemed fairly clear \u2013 they prefer higher oil prices in spite of the U.S.\u2019s objections.2<\/sup><\/p>\n

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While you can\u2019t predict how the news will shape the market or when the next bear market will occur, you may be able to better prepare for what\u2019s to come with the right investment strategy.<\/p>\n

To help you learn more about strategies that cater to different investment objectives, we have created our Dean\u2019s List of Investment Strategies. Our Dean\u2019s List describes five of our top-ranked investment strategies .3<\/sup><\/p>\n

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New Tariffs Take Effect \u2013 <\/strong>on Monday, new tariffs went into effect that levy a 10% duty on $200 billion worth of Chinese goods. China responded immediately with a 10% tax on $60 billion of U.S. imports, which at this point means that virtually all U.S. imports to China are subject to a tax. The U.S. responded by ratcheting up the dispute even further, threatening an additional tariff on $257 billion of Chinese goods, which if implemented would essentially cover all $505 billion on U.S. imports from China. The U.S. has also indicated that the current 10% tariff rate could jump to 25% later in the year, which in our view would turn the trade dispute from a spat into a war. At 10%, we would argue that the costs can be absorbed by corporations and consumers without materially affecting behavior, but at 25% the story would arguably change.5 <\/sup><\/p>\n

The Fate of Canada \u2013 <\/strong>back in August, the White House sent Congress a formal declaration that it intended to sign a new trade deal with Mexico \u2013 even if Canada was not involved. Many business leaders and members of Congress have been vocal in opposition to a trade deal that does not include Canada, but the Trump administration continues to take a hard line on our neighbor to the north. The impasse threatens the future of the 24-year old NAFTA treaty, and particularly leaves much uncertainty among farmers and automobile makers from both countries<\/p>\n

The Trump administration\u2019s threat raises uncertainties for business leaders and farmers. Canada purchased some $20.6 billion in food and farm products from the United States in 2017, and about 1.8 million cars purchased by U.S. consumers were built in Canada. U.S. exports of beef to Canada hit a 10-year high in 2017. The supply chains are heavily interwoven, and it\u2019s difficult to argue how a bilateral trade deal with Mexico would not disrupt them badly.6<\/sup><\/p>\n

Consumer Confidence Hits 18-Year All-Time Highs \u2013 <\/strong>in spite of trade uncertainty and higher prices at the pump, the U.S. consumer is about as confident as he\/she gets. The Conference Board\u2019s index of consumer confidence rose to 138.4 from 134.7 in August, which puts the reading at its highest level since September of 2000 \u2013 when the technology boom was basically peaking. Whether the high confidence reading is a bullish or bearish signal remains to be seen, but history suggests that it could actually be both \u2013 indicating a bit more runway for the bull while also signaling that the cycle is nearing the very late stages.7<\/sup><\/p>\n

No matter how much runway is left for the current bull market, it is important for investors to prepare for a potential bear. And the right investment strategy can make an enormous difference over the long haul.<\/p>\n

To help you learn more about strategies that cater to different investment objectives, we have created our Dean\u2019s List of Investment Strategies.8<\/sup>\u00a0Our Dean\u2019s List describes five of our top-ranked investment strategies.9<\/sup>\u00a0If you have $500,000 or more to invest and want to learn more about these strategies, click on the link below to see how they could potentially benefit you.<\/p>\n","protected":false},"excerpt":{"rendered":"

The market is currently hitting all-time highs while consumer confidence is up. But, what does this truly signal for the […]<\/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-7768","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\/7768","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=7768"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/7768\/revisions"}],"predecessor-version":[{"id":10833,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/7768\/revisions\/10833"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=7768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=7768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=7768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}