In this week\u2019s edition of steady investor, we take a look at\nthis week\u2019s top news stories and what they could mean for the market:<\/p>\n\n\n\n
Read on to get the details:<\/p>\n\n\n\n
Risk On? <\/strong>In last\nweek\u2019s Steady Investor, <\/em>we pointed\nout a trend of cyclical stocks outperforming the broad stock market over the\nlast few weeks \u2013 following the technical bear market that ended on December 24.\nThere\u2019s another category that investors have been flocking to in recent weeks:\nEmerging Markets. Much like cyclicals, Emerging Markets tend to do well when\nthe global economy is growing at a brisk pace and credit conditions are\nfavorable. But these categories also might be performing well simply because\ninvestor perception has improved in recent weeks \u2013 fears of a global recession\nseem to have receded somewhat following a truce (but not a deal) with China and\nthe Federal Reserve\u2019s pause on interest rates. Indeed, central banks around the\nworld seem to have pivoted to a more cautious stance, ready to intervene if\neconomic conditions weaken. Investors\nare responding in kind, having moved $86 billion into emerging-market stocks\nand bonds so far in 2019, a figure that already outpaces investment over the\nfinal three quarters of 2018.1<\/sup> <\/p>\n\n\n\n ______________________________________________________________________<\/p>\n\n\n\n Should Headlines Influence Your Investment Decisions?<\/a><\/strong> But what headlines should cause you to worry? In our view, when it comes to investing, letting the media noise sway your judgment can make you vulnerable to costly financial mistakes. ______________________________________________________________<\/p>\n\n\n\n Deficits, Deficits,\nand More Deficits \u2013 <\/strong>The United States continues to spend far more than it\nmakes. From October 2018 to January 2019 \u2013 which represent the first three\nmonths of the government\u2019s fiscal year \u2013 the budget gap widened to $310 billion\ncompared to the $176 billion figure just a year earlier. This marks a deficit\nincrease of a staggering 77%. Over the last 12 months, the budget deficit was\njust shy of $1 trillion<\/em> as the federal government\u2019s revenues\nfell 1.5% while spending rose 4.4%. The last time the deficit was that large\nwas in 2013, when the country was still spending its way out of the Great\nRecession. At issue today is the tax cut coupled with the bi-partisan budget\nresolution to spend 9% more in the first four months in fiscal 2019 from the\nprevious period. More spending was approved for the military, veterans\u2019\naffairs, and interest on existing debt.3<\/sup> Meanwhile, America\u2019s trade\ndeficit also continues to grow, despite efforts to use tariffs to reduce or\neliminate it. According to the Bureau of Economic Analysis, the United States\u2019 monthly international trade deficit\nincreased from $50.3 billion in November 2018 to $59.8 billion in December. Breaking\ndown the numbers, the United States is a net exporter of services but a net\nimporter of goods \u2013 which makes sense. Goods can often be made more cheaply\nabroad than in the U.S., and the U.S. is a service and technology-based\neconomy. The goods deficit increased $9.0 billion in December to $81.5 billion,\nwhile the services surplus decreased $0.5 billion in December to $21.8 billion.\nThe goods deficit of $81.5 billion is the largest in U.S. history.4<\/sup> <\/p>\n\n\n\n Still Waiting for China\u2019s\nEconomic \u201cHard Landing\u201d \u2013 <\/strong>Since\nabout 2015, economists and market prognosticators have been warning about\nChina\u2019s imminent economic hard landing. It hasn\u2019t come. While China does face\nissues of mounting debt and property vacancies, the state has managed to keep\nthe economy moving with a combination of bailouts, cheap loans, increased\nspending, and coming soon, new tax cuts, fee reductions for businesses, and\nincreased bank lending (+30%) to small and private companies. Taken together,\nChina has decreased its GDP growth estimate for 2019 to 6% from 6.5%, following\nits 6.8% expansion in 2018. 5<\/sup> Though state-issued data from China is\nhardly reliable in terms of accuracy, it\u2019d be difficult for the second largest\neconomy to hide economic contraction if it were actually occurring. Much of China\u2019s\neconomy is built upon taking and fulfilling orders from the rest of the world. <\/p>\n\n\n\n Loosening Up \u2013 <\/strong>in a marked shift that speaks to the\ntimes, investment banking firm Goldman Sachs announced this week that it is\neasing its dress code standards for all employees.6<\/sup> This move\narguably makes sense, since it\u2019s reported that 75% of Goldman\u2019s employees were\nborn after 1981 (making them Millennials or Gen Z\u2019ers). As for what type of\ndress would be acceptable going forward, there weren\u2019t many specifics: \u201cAll\nof us know what is and is not appropriate for the workplace,\u201d the memo said.<\/p>\n\n\n\n Should these\nheadlines influence your investment decisions?<\/strong> It can be hard not to go on\nthe defense, especially when many of the headlines are pushing you to react\nwith fear over potential volatility. But, don\u2019t let this media noise sway your\njudgment and make you vulnerable to potentially costly financial mistakes.<\/p>\n\n\n\n To help you stay steady and avoid costly mistakes, we are\noffering you our just-released guide, \u201cShould Headlines Influence Your\nInvestment Decisions?7<\/sup><\/p>\n\n\n\n In this guide, we discuss three behavioral tendencies that\nwe believe investors should keep in mind if a headline makes you edgy or\nnervous.<\/p>\n\n\n\n If you have $500,000 or more to invest, click on the link\nbelow to get your free copy today!<\/p>\n","protected":false},"excerpt":{"rendered":" In this week\u2019s edition of steady investor, we take a look at this week\u2019s top news stories and what they […]<\/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-7965","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\/7965","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=7965"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/7965\/revisions"}],"predecessor-version":[{"id":10778,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/7965\/revisions\/10778"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=7965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=7965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=7965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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While investor perception has shifted to the positive surrounding fears of a global recession, investors still seem wary that the market could take a negative turn. <\/p>\n\n\n\n
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To help you avoid falling prey to this mistake, we are offering you our just-released guide \u201cShould Headlines Influence Your Investment Decisions.\u201d2<\/sup>\u00a0In this guide, we discuss three behavioral tendencies that we believe investors should keep in mind if a headline makes you edgy or nervous.
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If you have $500,000 or more to invest, click on the link below to get your free copy today!
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Download Our Guide, \u201cShould Headlines Influence Your Investment Decisions?<\/a>2<\/a><\/sup>\u201d<\/a><\/strong><\/p>\n\n\n\n