The first\nis the jobs market1<\/sup>, which I believe could be substantially stronger\nthan many currently believe. In the Federal Reserve\u2019s recently published Beige\nBook \u2013 which is based on surveys from major cities \u2013 I noticed a common theme:\nemployers across the country are reporting shortages\nof workers<\/em>, and many are desperate to hire. <\/p>\n\n\n\n __________________________________________________________________________<\/p>\n\n\n\n Manage Rising Market Risks by Focusing on These Key Data Points Today!<\/a><\/strong><\/p>\n\n\n\n With\nrising market risks and uncertainties in the market, it is essential to stay\ndata-driven! To help you stay focused on key data points and fundamentals that that\ncould impact your investments in the long term, I am offering all readers an\nexclusive look at our May Stock Market Outlook Report. This report contains\nsome of our key forecasts to consider such as:<\/p>\n\n\n\n If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today!\u00a0 __________________________________________________________________________<\/p>\n\n\n\n The areas\nof the economy with the most acute shortages are part of the \u2018reopening trade\u2019,\ni.e., companies and industries that stand to benefit most from loosened and eventually\nremoved restrictions. Think restaurant employees, drivers, child care workers, service\nindustry jobs, and even jobs in information technology. <\/p>\n\n\n\n The labor\nforce is estimated to be five million people smaller than it was before the\npandemic, which gives the impression that the labor market is badly bruised.\nBut it is also true that many people dropped out of the labor force for\ntemporary reasons \u2013 people fearful of catching and spreading the virus, and\/or those\nwho are content living on expanded unemployment benefits. Those reasons may\nfade soon, and I think most people who want a job today can find one.<\/p>\n\n\n\n 2.\nCorporate Bond Markets<\/strong><\/p>\n\n\n\n Another economic\nfundamental pointing3<\/sup> to falling risks can be found in the corporate\nbond markets. The spread between speculative-grade, high yield corporate bonds\nand the 10-year U.S. Treasury bond has fallen to multi-year lows, as seen in\nthe chart below: <\/p>\n\n\n\n Indeed, the\nyields on low-rated corporate bonds sunk to a record low of 3.89% in February,\nindicating that companies can borrow cheaply in the current environment. Investors\nare the ones doing the lending, which tells us the market is not demanding much\ncompensation for the level of perceived risk. Many would say this is a sign that investors\nare starved for yield, which I believe is true in part. But the other side of\nthe story is investors may just be very confident in their outlook for the\neconomy and see further signs of strength and improvement.<\/p>\n\n\n\n 3. New\nBusiness Formation<\/strong><\/p>\n\n\n\n A final\nindicator5<\/sup> underscoring falling economic risks is new business formation.\nThe pandemic devastated many businesses, no doubt. But the tides are turning \u2013\napplications for new businesses hit nearly 1.4 million in Q1 2021, which marks\nthe second-highest quarterly total in over 15 years. Applications for\nbusinesses that could employ multiple workers also approached their highest\nquarterly tally, indicating that entrepreneurs have been emboldened by what\nthey see as an opportunity for new growth. In my view, it\u2019s a clear sign the\nU.S. economy is pushing ahead, with innovators and new growth opportunities\nforming in the wake of a major recession. <\/p>\n\n\n\n Bottom Line for Investors<\/strong><\/p>\n\n\n\n I\u2019ve made\nthe point that economic risks are falling. But what about market risks being on\nthe rise? In my\nview, it depends on where you\u2019re invested. I\u2019m seeing a lot of froth in\nparticular asset classes and some individual stocks, but I think an investor\u2019s\nrisk is tied to his\/her portfolio exposure. Many investors are abandoning\nlong-term, diversified approaches in favor of chasing \u2018hot\u2019 asset classes or\nstocks. That\u2019s bad news, in my view. <\/p>\n\n\n\n At Zacks\nInvestment Management, in addition to the qualitative screening of the\nfundamental characteristics of companies we invest in, we analyze their\ncorrelation with our existing portfolio and with the overall market. Doing so\nallows us to ascertain to what degree our portfolios will be affected by large shifts\nin the market, such as market corrections. In other words, we constantly\nprepare for episodes of market volatility, which in my view, may arrive sooner\nthan later \u2013 even as the economy improves. <\/p>\n\n\n\n Instead of\nchasing the heat, I recommend staying focuses on what matters – key data points and economic\nindicators that could positively impact your investments. <\/p>\n\n\n\n To help you do this, I am offering all readers our\u00a0<\/a>Just-Released May 2021 Stock Market Outlook Report.\u00a0<\/a><\/strong><\/p>\n\n\n\n This report looks at several factors that are producing optimism right now and contains some of our key forecasts to consider such as:<\/p>\n\n\n\n If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today! As the economy starts to open, fundamentals point to growth\u2014but the market isn’t all moving in tandem. <\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-9548","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9548","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=9548"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9548\/revisions"}],"predecessor-version":[{"id":10406,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9548\/revisions\/10406"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
IT\u2019S FREE.\u00a0Download the Just-Released May 2021 Stock Market Outlook<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/7_pic1-1024x395.png\")
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