In today\u2019s Steady Investor, we look at key\nfactors that we believe are currently impacting the market and what could be\nnext for the markets such as:<\/p>\n\n\n\n
The Fed Chair and\nTreasury Secretary Offer Diverging Views of Economy \u2013 <\/strong>Online congressional\nhearings took place on Tuesday, with Federal Reserve Chairman Jerome Powell and\nTreasury Secretary Steven Mnuchin taking questions. Though Chairman Powell and\nSecretary Mnuchin are very much working together to respond to the economic\ncrisis at hand, Secretary Mnuchin is pursuing the Trump administration\u2019s\neconomic goals while Chairman Powell oversees the politically independent\nFederal Reserve. It follows that the two men posited diverging views of the\nU.S. economic recovery, and what is required to facilitate it. Secretary\nMnuchin believes that the biggest risk of permanent damage to the U.S. economy\ncomes from not reopening. Delaying reopening and leaving restrictions in place\ntoo long will prolong the recovery and inhibit a \u201cV-shaped\u201d recovery, in his\nview. Secretary Mnuchin also favors a wait-and-see approach to more fiscal and\nmonetary stimulus. Chairman Powell offered a different perspective, stating that\nthe biggest risk to the economic recovery was consumers and businesses\u2019\nattitudes about the risk of Covid-19 infection. Chairman Powell believes that\nmore stimulus is needed now to buy more time for the infection to come under\nbetter control, a vaccine to hit the market, and\/or both.1<\/sup> In the\nmeantime, Chairman Powell thinks that more spending is needed by Washington to\nprevent structural damage from high unemployment and a wave of bankruptcies. <\/p>\n\n\n\n ______________________________________________________________________________<\/p>\n\n\n\n Dividend-paying Stocks May Offer a Solution<\/a><\/strong> ______________________________________________________________________________<\/p>\n\n\n\n The Topsy-Turvy\nEconomic Relationship with China \u2013 <\/strong>Tension between the United States and\nChina is decisively ratcheting higher. The United States is actively questioning\nChina\u2019s role in the pandemic as well as lack of transparency between China and\nthe World Health Organization, while China defends itself and its actions with\nan air of hostility. Overall, relations between the world\u2019s two largest\neconomies have chilled, to say the least. Corporations are responding somewhat\ndifferently. On the one hand, the pandemic laid bare the risks of complex supply\nchains with heavy exposure to China and other developing economies.\nCorporations are strongly considering restructuring supply chains as a result,\nor reshoring them altogether. On the other hand, companies with strong consumer\npresence appear to be doubling down on China\u2019s projection for long-term growth\npotential. Companies like Walmart, Tesla, Starbucks, and even Popeye\u2019s are increasing\ntheir local presence and unveiling plans to open more stores and sales channels\ninto the future.3 <\/sup><\/p>\n\n\n\n Signs of Stability in\nthe Oil Markets \u2013 <\/strong>Many readers likely remember the oil price collapse\nearlier in the year, when for a moment some oil futures fell into negative\nterritory. The tables appear to be showing signs of turning now that the worst\nof the pandemic appears to be behind the world. In the futures markets for Brent\nCrude and West Texas Intermediate, traders were bidding up the price of\nDecember delivery for barrels of oil.4<\/sup> It is not common for traders\nto actively trade in contracts so far into the future, but the bidding up of\nDecember contracts may reflect a consensus that demand is likely to rebound in\nthe second half. <\/p>\n\n\n\n Will Unemployment\nBenefits Impact the Labor Market? <\/strong>A working paper released this week by\nthree University of Chicago economists suggests that unemployment benefits\nduring the Covid-19 pandemic may have some inhibitive impact on the recovery.\nAs it stands today, more than two-thirds of unemployed Americans receiving\nbenefits are being paid more <\/em>than\nthey were at their old jobs. These payments are in addition to the $239 billion\nthat the IRS has paid out in stimulus checks to tide households over. While the\neconomists argue that the payments offer a much-needed bridge to keep\nhouseholds liquid and consumption steady during the crisis, the thrust of the\npaper also suggests that receiving high benefits may \u201ccreate distributional\nissues and may hamper efficient labor reallocation both now and during the\nrecovery.\u201d5<\/sup> In other words, Americans may be less in a hurry to get\nback to their old jobs if they\u2019re making more today than they were before.<\/p>\n\n\n\n As this crisis continues, you may be wondering what can you\ndo in the meantime to protect your retirement. You have to invest somewhere, as\ncash won\u2019t do. In times like this, I would suggest considering stocks that are\ngrowing earnings and dividends and have a track record of doing so.<\/p>\n\n\n\n To learn more about how to use dividend-paying stocks in\nyour strategy to potentially generate cash flow for retirement, check out our\nguide \u201cA Look Beyond Bonds: There May Be a Better Option for Your Retirement\nIncome.\u201d6<\/sup><\/p>\n\n\n\n If you have $500,000\nor more to invest, click on the link below to get our free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" Jobless benefits may affect labor market, Fed and Treasury views diverge, oil futures bet on rebound <\/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-8665","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\/8665","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=8665"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8665\/revisions"}],"predecessor-version":[{"id":10599,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8665\/revisions\/10599"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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The challenge many retirement investors are facing through this crisis is knowing where to invest. Cash won\u2019t do. But a portfolio invested in stocks with a strong track record of dividends and dividend growth may give investors the potential for a stable and predictable source of income in retirement.
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To learn more about how to use dividend-paying stocks in your strategy to potentially generate cash flow for retirement, check out our guide \u201cA Look Beyond Bonds: There May Be a Better Option for Your Retirement Income.\u201d<\/em>
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\u00a0If you have $500,000 or more to invest, click on the link below to get our free guide today!
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A Look Beyond Bonds: There May Be a Better Option for Your Retirement Income<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n