This week the trade\ndispute between China and the U.S. took a turn for the worse and with it sent\nthe markets into volatility. Read on to see how this story and more could have\nan impact on the market.<\/p>\n\n\n\n
Trade War Tensions\nwith China Take a Turn for the Worse \u2013 <\/strong>the ongoing trade dispute between\nthe U.S. and China continues to worsen, as both sides fired shots that sent\nmarkets into a volatile patch. The escalation started last week, when the U.S.\nannounced it would impose 10% tariffs on $300 billion worth of Chinese imports,\neffective September 1. But the markets went into a tailspin on Monday when\nChina retaliated by suspending purchases of U.S. agricultural products and\nallowing their currency, the yuan, to depreciate sharply against the dollar.\nThe S&P 500 plummeted -3.3% on Monday and the tech-heavy Nasdaq \u2013 where\nmany companies have China exposure \u2013 fell -3.8%.1<\/sup> While a deepening\nof tensions between the world\u2019s two biggest economies is far from ideal, the\n\u2018trade war\u2019 is also an old story that has been baking into asset prices for the\nbetter part of a year, in our view. While these escalations are new and\nunexpected, we would argue that the market\u2019s expectations for a big deal have\nbeen falling for some time. <\/p>\n\n\n\n _________________________________________________________________________<\/p>\n\n\n\n Handling Volatility \u2013 What You Should Do!<\/a><\/strong><\/p>\n\n\n\n Sudden market\ndeclines often result in emotional decision-making. For example, many investors\nrationalize that selling out of stocks is the surest way to avoid incurring\nfurther losses, but selling in many cases just locks those losses in. <\/p>\n\n\n\n The real challenge\nis not in finding a way to eliminate volatility\u2014it is developing a mental\napproach to dealing with it. Our guide, \u201cHelping You Manage Market Volatility,\u201d\nwill provide you with insights and tips to do just that. Get answers to\nquestions like:<\/p>\n\n\n\n If you have $500,000\nor more to invest and want to get answers to the questions above, click on the\nlink below to download this guide today!<\/p>\n\n\n\n Download Zacks Volatility Guide, \u201cHelping You Manage Market Volatility.\u201d<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n _________________________________________________________________________<\/p>\n\n\n\n What Does Labeling China a\n\u201cCurrency Manipulator\u201d Mean? <\/strong>For the first time since 1994, the United States has labeled China\na currency manipulator following the near 2% depreciation of the yuan on\nMonday. China\u2019s central bank claimed the devaluation was due to market forces\nand that it would not engage in a currency war. In reality, one could argue\nthat China was manipulating its currency for long periods from around 2003 \u2013\n2013, but the case is weaker today to label China a currency manipulator. A\nrecent International Monetary Fund report released in July found China\u2019s\ncurrency was roughly in line with where it should be.3<\/sup> From here,\nChina will need to negotiate with the United States and the International\nMonetary Fund to make its currency more fairly valued, but the question remains\nhow far these negotiations will go and what the end result will be. A weaker\nChinese currency hurts American exporters who sell to China and weakens the\neffect of tariffs since Chinese imports are technically cheaper with a stronger\ndollar purchasing them. <\/p>\n\n\n\n The\nFed Plans to Roll Out Faster Payment Systems \u2013 <\/strong>in\na world where PayPal and Venmo allow customers to send money to each other\ninstantly through a phone app, there is demand for banks of all sizes to have\nthe same capabilities for dealing with clients and customers. The Federal\nReserve voted this week 4-1 to build the infrastructure needed to make that\nhappen, which it says should be ready by 2023\u2013024. The payments system would allow\nbill payments, paychecks, and other transfers to happen instantly and be\navailable 24 hours a day, which is vastly different from the current system\n(closed on weekends and takes 2-3 days for a transaction to settle). Many big\nbanks have already started creating these systems, so the Fed\u2019s system is\nlikely to be used by smaller, regional, and community banks.4 <\/sup><\/p>\n\n\n\n How to React to Recent Volatility?<\/strong>\nOne challenge that many equity investors are facing and will most likely\ncontinue to face throughout the remainder of the year is how to react to current\nvolatility. In our view, it is important to remember that volatility is a\nnormal part of the ebb and flow of the markets. We believe the key is not to\nlook for ways to eliminate it, but to develop a mental approach to dealing with\nit.<\/p>\n\n\n\n Our Volatility guide, \u201cHelping You\nManage Market Volatility,\u201d5 <\/sup>will provide you with insights and tips\nto do just that. Get answers to questions like:<\/p>\n\n\n\n If you have $500,000 or more to invest\nand want to get answers to the questions above, click on the link below to\ndownload this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" U.S. and China trade shots, China labeled \u201ccurrency manipulator\u201d, Fed plans faster payment system<\/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-8162","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\/8162","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=8162"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8162\/revisions"}],"predecessor-version":[{"id":10726,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8162\/revisions\/10726"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8162"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8162"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8162"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}