In today\u2019s Steady\nInvestor, we look at key questions investors are asking, and factors that we\nbelieve are currently impacting the market such as:<\/p>\n\n\n\n
Slower than Expected U.S.\nGDP Growth in Q3 \u2013 <\/strong>At the outset of the year, many economists were\nanticipating strong vaccine uptake would steadily decrease pandemic risk, giving\nway to booming growth in the second half of the year. The economic forecasting\nfirm, IHS Markit, thought in mid-July that the U.S. economy would grow by 7.8%\nin Q3 \u2013 today, their forecast has fallen to 3.6%. U.S. consumer confidence has\nalso sunk in recent months, also tied to the rapid spread of the Delta variant\nand re-introduction of mask restrictions and in some cases, vaccine mandates.\nThe Conference Board\u2019s consumer confidence index1<\/sup> dropped from 115.2\nin August to 109.3 in September, signaling those consumers were less\nenthusiastic about spending as the summer wore on. Supply constraints, which we\nhave written about many times in this space, are also weighing on overall\neconomic growth. Taken together, these headwinds are likely to show a marked\nslowdown in U.S. GDP growth in Q3, but the upshot is that economists across the\nboard are in turn raising <\/em>growth\nestimates for Q4 and the first half of 2022. The perfect storm for growth would\nbe that Covid-19 cases, hospitalizations, and deaths continue to fall as supply\nchain issues slowly resolve themselves.2<\/sup><\/p>\n\n\n\n ______________________________________________________________________________<\/p>\n\n\n\n Never Panic! Here\u2019s How to Use Market Volatility to Your Advantage<\/a><\/strong><\/p>\n\n\n\n Volatility in this current market can be very challenging,\nbut we encourage investors to not give into fear! Do you know that there are\npositive aspects of volatility that can keep your investments afloat?<\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide,\n\u201cUsing Market Volatility to Your Advantage\u201d and learn our insights, based on\ndecades of experience, about how a volatile market may be able to help\ninvestors refine their strategies and potentially generate solid returns over\ntime.<\/p>\n\n\n\n Download Our Guide, \u201cUsing Market Volatility to Your Advantage\u201d<\/a>3<\/a><\/sup><\/strong><\/p>\n\n\n\n ______________________________________________________________________________<\/p>\n\n\n\n Looming Government\nShutdown and Debt Ceiling Standoff \u2013 <\/strong>Many readers are seeing news of a looming government shutdown and\ndebt ceiling debate and think, \u201chere we go again.\u201d Raising the debt ceiling has\nalmost always been a routine affair \u2013 Congress has raised the debt ceiling\nclose to 100 times in the postwar era. Raising the debt ceiling means enabling\nthe U.S. Treasury to sell bonds in order to pay for spending that Congress has already authorized. <\/em>Raising\nthe debt ceiling also means staying current on existing government obligations,\nlike Social Security payments, tax refunds, payments to military families, and\nso on. Treasury Secretary Janet Yellen told Congress this week that the\ngovernment would be unable to pay its bills if lawmakers did not raise the debt\nceiling by October 18, saying America could \u201cdefault\u201d for the first time if\naction was not taken. This is scary language, but there is also some hyperbole\nhere \u2013 the U.S. Treasury is required to pay bond interest first, and tax\nrevenues should allow the U.S. to continue making interest payments on time. Ms.\nYellen\u2019s warnings of \u201cdefault\u201d are seemingly more designed to get Congress to\nact, versus being an actual risk for the U.S. in the near term. Not raising the\ndebt ceiling would mean missing entitlement and other payments, which is by no\nmeans a good outcome and could lead to volatility. But talk of \u201cdefault\u201d needs\nto be examined more closely.4<\/sup><\/p>\n\n\n\n Home Prices Continue\nSoaring to New Records \u2013 <\/strong>The U.S. housing market continues to remain\nstrong. The S&P CoreLogic Case-Shiller National Home Price Index posted yet\nanother record for year-over-year home-price increases, notching a 19.7% gain\nfrom July 2020 to July 2021. The index measures average home prices in major metropolitan\nareas across the U.S., so does not even factor sharp growth seen in emerging\ntowns and small cities that have seen a surge of new buyers leaving the cities\nfor bigger spaces. The 19.7% y-o-y gain marks the sharpest increase since the\nindex began keeping records in 1987.5<\/sup><\/p>\n\n\n\n Longer-Than-Expected\nTransitory Inflation \u2013 <\/strong>The Federal Reserve and Chairman Jerome Powell have\nlong held that inflation in the U.S. is only temporary (\u201ctransitory\u201d), as a\nsurge in demand is being met with supply constraints and issues with the global\nsupply chain. But what happens when \u201ctransitory inflation\u201d lasts longer than\nexpected? Is it then no longer transitory, but more permanent? Chairman Powell\nthinks not \u2013 in statements this week, Powell said the reopening of the economy\nis \u201ca process that will have a beginning, middle, and an end,\u201d and that the\nU.S. has not yet moved through that cycle. In Mr. Powell\u2019s view, the economy\nwill settle into a post-pandemic growth phase where supply chains run smoothly\nagain, demand wanes slightly, and inflation settles back towards the Fed\u2019s\ntarget of 2%. Mr. Powell also defended keeping monetary policy accommodative,\nstating that there is a long history of the Fed not doing enough. Even still,\nthe Fed appears poised to taper bond purchases later this year but remains\nsplit on when to raise interest rates, with half of the voting members favoring\nlate 2022 and the other half wanting to wait until 2023.6<\/sup><\/p>\n\n\n\n Silver Linings in a Volatile Market<\/strong> – It may be hard to\nfind silver linings in a volatile market, but that doesn\u2019t mean they aren\u2019t\nthere!<\/p>\n\n\n\n To help give you additional insight into how you can make the\nmost of turbulent times, I recommend reading our guide \u201cUsing Market Volatility\nto Your Advantage.\u201d7<\/sup> This guide can help you learn about our\ninsights, based on decades of experience, about how a volatile market may be\nable to actually help investors refine their strategies and potentially\ngenerate solid returns over time.<\/p>\n\n\n\n If\nyou have $500,000 or more to invest, download this free guide today by clicking\non the link below.<\/p>\n","protected":false},"excerpt":{"rendered":" Delta problems add to GDP growth headwinds, government shutdown threat, “transitory” inflation lingers<\/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-9889","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\/9889","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=9889"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9889\/revisions"}],"predecessor-version":[{"id":10296,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9889\/revisions\/10296"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9889"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9889"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9889"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}