Here’s the latest global stock market and economic updates from Forbes:
- Brexit, Shutdown Add to Uncertainty
- Earnings Season Kicks Off on Mixed Note
- Fed Takes a Backseat in Investor Concerns
- Treasuries Buck Economic Trends
- It’s not too early to prepare for Tax season
February could bring a heaping plate of geopolitical drama to markets around the world, potentially helping to end a brief calm that settled over January.
As the month starts, markets were basking in the Federal Reserve’s decision to hold interest rates steady, along with better than expected earnings results from Boeing and Apple. In fact, many Wall Street analysts have indicated they now expect no interest rate increase at all this year after the Fed said it will remain “patient.” So stocks begin February propelled in part by the ongoing earnings season and the Fed’s dovish tone.
Still, several question marks hover over the next few weeks. First, the U.S. and China only have about four weeks until their self-imposed early March deadline to get some sort of trade agreement in the books, or we could see tariffs jump. Of course, any more trade tension could likely put the market in a tailspin in both countries and perhaps around the world. As of late January, optimism seeped in around positive developments, but there was no word of an imminent deal.
That’s just one reason why volatility—which surged in December as investors fretted about a possible global economic slowdown—could once again become a factor into February. The markets spent January recovering from December’s sell-off, but as a new month begins nothing is certain. Even the government shutdown—which ended with stopgap funding through Feb. 15—could resurface if lawmakers don’t agree on an immigration and border security deal.
As of late January, the S&P 500 Index was up approximately 7% year to date, the Dow Jones Industrial Average was up about 7.2% and the Nasdaq was up 8.2%. At the end of last year, key sectors like info tech, financials, and transports had remained under pressure, signs that investors apparently had doubts about U.S. and global economic growth. But those sectors showed much more buoyancy throughout January. The fact that COMP is leading the major indices might be an early sign of investors starting to embrace more risk, since it’s dominated by tech and biotech names. In addition, the small-cap Russell 2000 had the best start to a year since 1987.
Continue reading HERE for more insights.
For the latest global market and economic updates, check out LOM Financial:
Global markets rallied last week. The MSCI World Index gained 1.43% while the SPX Index gained 1.62%. The ex-US markets were a bit more subdued. The Nikkei was flat 0.08% (in local currency), and the FTSE Euro ETFs (reported in USD) gained 0.95%.
Weakness in China
The week opened down as weakness in China caused chipmaker NVIDIA (-9.63%) and construction company Caterpillar (-4.35%) lowered profits forecasts. A sizeable portion of revenues, 70% and 22% are attributable to the Asian region for NVIDIA and Caterpillar, respectively.
United States Government Shutdown Ended
The longest government shutdown in US history ended after a 35-day standoff. The Congressional Budget office estimated the shutdown cost $11 Billion in economic activity. ABC News polls showed the average American was disproportionately blaming Trump and the Republican party. Unsurprisingly, this was split along party lines with independents explaining the difference. Ending the shutdown backfired amongst the President’s base, who view this as an outmanoeuvring by the opposition. We should see some makeup on spending since paychecks have been restored, though some of that spending will not be recovered. This is unlikely to have an impact on the 2020 elections as we are too far out.
Macroeconomic data was generally positive, beating or meeting expectations in 73.5% of key global metrics. This should reinforce the notion that part of this rally is justified.
Continue reading here for more insights.
Choosing the right and safe investments is quite tricky, especially during volatile times in the market. These low-risk investment recommendations from Bankrate might help you decide which investment you must consider to meet your financial goals.
Why low-risk investments?
After a volatile end to 2018, wary investors may be searching for stability in 2019. Even for aggressive stock market fiends, an investment portfolio that’s diversified with less-risky assets is vital to ensure your earnings see growth over time.
What to consider
The trade-off, of course, is that in lowering risk exposure, investors are likely to see lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income. But if you’re looking for growth, consider investing strategies that match your long-term goals.
Risk tolerance and time horizon play big roles in deciding how to allocate your investments. Conservative investors or those near retirement may be more comfortable allocating a larger percentage of their portfolios to less-risky investments to minimize risk. These are also great for people saving for short term (about five years or fewer) or intermediate (around a decade) goals.
Those with stronger stomachs and workers still accumulating a retirement nest egg probably can fare better with riskier accounts, as long as they diversify. Be prepared to do your homework and shop around for the accounts that fit both your short- and long-term goals.
If you’re looking to minimize your portfolio’s risk, here are a few of the safest investments to consider.
Overview: best investments in 2019
1. Certificates of deposit
These federally insured time deposits have specific maturity dates that can range from several weeks to several years. Because these are “time deposits,” you cannot withdraw the money for a specified period of time without penalty.
The financial institution pays you interest at regular intervals. Once the CD matures, you get your original principal back plus any accrued interest. Today you can earn as high as nearly 3 percent interest.
Risks: CDs are considered safe investments. However, they do carry reinvestment risk — the risk that when interest rates fall, investors will earn less when they reinvest principal and interest in new CDs with lower rates. The opposite risk is that rates will rise and investors won’t be able to take advantage because they’ve already locked their money into a CD.
Consider laddering CDs — investing money in CDs of varying terms — so that all your money isn’t tied up in one instrument for a long time. CD returns are inching up as interest rates are on the rise, but it’s important to note that inflation and taxes could significantly erode the purchasing power of your return.
Liquidity: CDs aren’t as liquid as savings accounts or money market accounts because you tie up your money until the CD reaches maturity — often for months or years. It’s possible to get at your money sooner, but generally you’ll pay a penalty.
For more investment ideas, continue reading HERE.
Here’s more update from CNBC for Oil prices:
Oil prices should sit around the $60 to $80 a barrel range throughout 2019 with volatility set to remain in the energy markets, Crescent Petroleum’s chief executive told CNBC Thursday.
Speaking at the World Economic Forum (WEF) in Davos, Majid Jafar, CEO of the United Arab Emirates-based oil and natural gas producer, said prices were subject to huge fluctuations and predicting prices was as hard as it had ever been.
“(Prices are) the most volatile in 30 years. That’s partly because of certain tweets but also because there isn’t much spare capacity and that’s where you see volatility,” he said.
Jafar said he remained optimistic of a trade deal between the U.S and China and that the global economy was still growing “pretty well.” The CEO said that should provide a decent base for oil prices across the 2019 calendar year.
“It will be in this $60 to $80 range. It will be volatile, but $90 is more likely than $40,” he said.
Continue reading HERE.
Real estate is arguably the largest industries in most developed countries across the globe. Thus, many investors are considering real estate as a great long-term investment option. If you’re planning to invest this year, learn more on Forbes:
There’s no doubt about it: the 2018 housing market has seen its ups and downs.
The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Will housing experience the same wild ride in the new year? Here’s what experts predict will happen in 2019 real estate market:
Mortgage rates will continue rising.
“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillow
Millennials will keep buying homes — despite those rising rates.
“The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American
“Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.” — Danielle Hale, chief economist for Realtor.com
Continue reading HERE.
The best thing to kick off your 2019 is to create a financial plan – especially for your future retirement. Here’s a few recommendations from The Balance:
If you want to retire with the same standard of living in your golden years, it is important to studiously save for retirement. Consistently putting away at least 10% to 15% of your income every payday should put you on track to a great retirement.
The best type of retirement plan for a large number of Americans is the 401(k) plan. This type of retirement plan is named for its section of the IRS code that explains how it all works. Most importantly, you should understand your investment options, how your retirement plan influences your taxes, and how to get the biggest impact from every dollar of retirement savings.
Depending on your employer, you may or may not have access to this type of retirement plan. Many education workers rely on a 403(b) plan, which has similar rules. Public employees of government agencies typically have a 457 plan in addition to a pension. But 401(k) plans are the biggest and most common employer-sponsored retirement plan.
If you are a small business owner, an HR manager evaluating 401(k) providers, or an in-demand worker comparing multiple job offers, it helps to understand the criteria that make a retirement plan the best retirement plan.
When looking at 401(k) plans, try to find one that minimizes fees while maximizing investment choices across diverse, low-fee mutual funds and/or ETFs that align with your needs. For this reason, some of the biggest investment brokerages and mutual fund providers set the standard for the best retirement plans available today. And the difference between expensive plans and low-cost plans can easily lead to tens of thousands of dollars in your retirement, if not more. A recent study found the average fee is around 1% of assets, but high-quality plans charge significantly less.
It’s also important to consider employer matching. This is up to your employer, not the plan provider, but it’s an incredibly valuable piece of the total compensation puzzle and you’ll want to keep it in mind. Many large employers match around 3% to 6% of an employees gross pay.
Now that you know more about what to look for in a 401(k) plan, which is very similar to a 403(b) or 457 plan for education and government workers respectively, here is a list of the best retirement plan providers you can choose today.
Continue reading HERE.
The stock market had a rough year ender just last month. Check out today how the market kick off 2019 on LOM Financial:
We started 2019 with a rollercoaster in the stock market. The S&P ended the week up 1.90% while the MSCI World Index gained 1.81% in the shortened trading week. Emerging markets were up 1.15%.
Apple Cuts Guidance
Apple cut its revenues forecast for the first time in 16 years as the Chinese market slowed and demand for the iPhone dropped off. There may be a bit more going on here. Apple products have been a status symbol over the past decade. Part of this was well deserved. Apple was one of the first companies to implement a touch screen display and helped innovate the $0.99 song (compared to buying a collection on a CD). Their innovation had allowed them to charge a premium for their phones. At this phase in development, the company has innovated less. The Apple Watch and various minor changes to the phone and tablet space are not providing the same levels of growth for the company.
Apples decision to push off 5G integration makes sense for the US markets. The infrastructure is still being developed state side. Internationally, this strategy places Apple at a disadvantage. For those looking to replace their phones, a 5G ready device should be more desirable as it can operate at 10x the speed of a 4G network. The average life of a cell phone is a little over 2 years. Why would someone buy a phone that costs more and is 1/10th the speed of a generic brand? Apple is aiming to transition into a more services driven brand though it is unclear what that will look like.
Continue reading HERE.
Historically, Technology is one of the largest sectors based on its economic growth globally. In fact, its profitability continues to rise in recent years, generating billions of revenue each year. And, who would have thought that these tech companies will become the world’s largest stock markets, today?
This iconic technology company has made a large impact in history. With its greatest innovations from devices to software products, Apple is now considered as one of the largest and most valuable publicly traded corporations across the globe. In addition, Apple was able to reach $1 trillion dollar market cap valuation in early August.
Amazon plays a significant role in both technology and e-commerce industry. Apart from being a relatively huge online retailer, this tech company became a favorite shopping destination by most consumers especially in the U.S., nowadays. In 2017, Amazon’s revenue has skyrocketed to $177.9 billion.
A well-known Washington based Technology Company that focuses on developing advanced computer software, for decades. With over $110 billion in revenue as of this year. Despite the constant market volatility lately, Microsoft has remained robust and firm to continuously attract many investors.
Here’s the latest global economic update from LOM Financial:
Despite market turbulence, the Fed decided to go ahead with the fourth rate hike of the year, while reducing expectations for next year to two hikes. All risky assets prices declined after the rate decision, as investors fear that higher interest rate will be a burden to economic growth. As the Fed contemplates its new reality and U.S. markets struggle to regain balance, we think Emerging Markets are worth a look at these levels.
It seems fitting that 2018 was the year of the Dog in the Chinese Zodiac. Most asset classes fared poorly this year as investors hit the panic button, but the pain has been particularly acute in the emerging market (EM) sector. Notwithstanding a few weeks of recent relative outperformance, EM’s as a whole have dramatically underperformed the broader averages this year. For example, while the S&P 500 stock index has declined by 8% year-to-date, the MSCI emerging market stock index is down 15.6%, representing underperformance of 7.6% as of this writing.
To a large extent, 2018 has been a perfect storm against the EM’s. The strengthening greenback, rising trade war tensions, geopolitical upheaval and collapsing oil prices have been major headwinds. China, by far the largest of the EM countries, has lately been the whipping boy of American politicians and the clear target of Trump’s aggressive trade negotiations. Looming uncertainties over trade policies and growth have curtailed business investment creating poor sentiment for investors. Also, China and the other EM’s are experiencing slower rates of GDP growth than they have enjoyed in the past.
Despite modestly decelerating growth in the world’s second largest economy, economists expect China’s gross domestic product (GDP) to advance at a rate of about 6.6% in 2018 and 6.2% in 2019, more than double the rate expected for the developed world as a whole using Bloomberg consensus data. Next year, aggregate emerging market GDP is expected to advance at a rate of 4.7%, compared to 2.1% for developed countries, as forecasted by the International Monetary Fund (IMF).
Continue reading here for more insights.
Investing in Stocks is like gambling, according to many investors. A volatile market is indeed inevitable and investors are losing money including their hopes and focus. During volatile times in the market, this wonderful investment advice from CNBC might help relieve and control your anxiety:
While I can’t give you any investment advice or help you ignore the current market conditions, I can teach you how to manage stress so that “volatile” describes the market and not your mindset.
Emotions can help influence decision-making, but when it comes to considering investment decisions in a volatile market, getting stressed out may point your investments in the wrong direction.
The high level of stress in today’s financial market is not only threatening retirement accounts and portfolios, it’s depleting an investor’s greatest resource: brain power.
The signs of the strain on your brain are sleeplessness, increased conflict, decreased energy, memory struggles, difficulty focusing and/or increased use of food, alcohol or drugs to reduce anxiety. Any of these symptoms mean you will be less able to make your best personal and professional decisions.
Let’s get very real for a minute. Unless you already have yoga, exercise, meditation or a “work/life balance” in practice, it can feel overwhelming to think about adding something new into your day if you are feeling stressed right now. With that said, here are five “don’ts” that might surprise you and that will also help you discover some easier “dos” for stress-management.
Don’t strive for work/life balance. That’s right. Work/life balance is typically defined in such a way that trying to maintain it creates more stress through shame and guilt. My approach to work/life balance is the same as with evaluating weight loss. Just as you will likely be frustrated if you step on the scale every day, don’t look at how you balance work and home life or extracurricular activities on a daily basis. Rather, look at a whole week or even month to gauge how you are doing with either.
Continue reading HERE for more insights: