[ad_1]
The calm predictability that was the signature of the 2017 stock market was replaced by the turbulence of the first half of 2018, with investors bowed out by the drumbeat of commercial threats between the United States and China.
The Dow Jones Industrial Average has wiped out all of its gains in 2018 and oscillates close to 10% correction territory, compared to its January 26th peak.
Some will see hindsight as an opportunity to buy, all the more than robust. The gross domestic product reaches $ 20 trillion every day. What's an investor to do? Stay on course Stick to your plan. Look long term.
But the "main risk" of the presidential tweets, the White House's statements and the breathtaking policy leaks made the second quarter quite turbulent. Steve Forbes said a few days ago on Fox Business "Mornings with Maria" that the Dow would probably leap thousands of points.
The leading indexes rallied on Friday and posted slight gains at the end of the quarter. The Dow Jones rebounded towards the end of a restless week, up 55 points at Friday's close.
The Standard & Poor's 500 & Nasdaq Composite Index high-tech index were positive on Friday, with the Nasdaq ending more than 6% for the second quarter
Most Market watchers bluntly blame President Trump, who questions tariff threats almost daily
"It's all about him," said Ed Yardeni of Yardeni Research. . "His tax cuts have dramatically increased profits.But, on the other hand, his protectionism is a possible threat to the economy."
[Let’s talk about the Big Book: Everything your family needs to know when you die ]
a relatively blue sky, there are many other economic threats fueling the existing anxieties of investors. The multi-level oil price, the strengthening of the US dollar, the Federal Reserve prefiguring interest rate increases and the slowdown in the European economy are among the topics discussed.
with the Nasdaq going through one of its worst weeks of the quarter. Throw in an expected national Donnybrook on an empty seat of the Supreme Court, as well as an impending midterm election, and you have a nervous "investor."
Wednesday's markets are a typical example. Trump's commercial adviser, Peter Navarro, told CNBC on Monday: "There is no plan to impose investment restrictions on countries that interfere in any way with our country. " Treasury Secretary Steven Mnuchin said the administration would seek redress from the US Foreign Investment Committee, rather than resorting to more direct methods to prevent rival countries from stealing vital technology. from the United States (Pssst., 19659013) [ Jeff Zients was with Obama for the long run – and now he is investing for a long time]
"If there are conflicting messages, again, this is "Is unfortunate," said Mnuchin on CNBC, answering a question about inconsistencies in co-anchor Andrew Ross Sorkin, the Dow Jones first reacted favorably to Mnuchin's comments, with 285 points more [19659013] But at the end of the day, the benchmark had all given up and closed 165 points in the red
"I do not think … Someone knows how bad the president is or is not serious about trade, "said Michael Farr, a g investment shareholder in Washington. "I heard someone say:" Most people stop when they shoot themselves in the foot. The president wants to reload.
The S & P 500 index remains at around 2% so far as of Friday, but has lost about 5% of its highest level on January 26th. The hardest hit sectors have been the industry and materials sectors, which are likely to lose the most in a tariff war. Industrials fell 3.6% in June and more than 5.8% in the year to Thursday 's close.
[‘Dying at your desk is not a retirement plan’]
The Chinese also feel the pain. Shanghai's benchmark composite index fell 0.9% to 2,786.90 on Thursday, its lowest level in more than two years.
The president has money at the bank if he wants to keep pushing the Chinese on the trade. The S & P 500 is up 26.96% since its election on November 8, 2016. This number climbs to 31.18% if one includes dividends in shares.
Analysts say the president cares too much about the stock market to blow it up. "There is a limit to how the president can take the commercial battle if the stock falls enough," said John Lynch, chief investment strategist for LPL Financial, in a recent report titled "Trade Tensions Playbook". . "
" President Trump has proven himself by starting a negotiation from an extreme position and going towards a compromise. Lynch said:
[How to divvy up the inheritance — and keep the family together]
Howard Silverblatt, a senior analyst of the S & P Dow Jones Indices, suggests that the market stops trying to read tea leaves. Wait for Trump to take the measures that you need.
"The difference is rhetorical about what I'm doing," Silverblatt said. "Do not pay attention to the man behind the curtain," he says winking at the "Wizard of Oz."
Tariff discussions have been on the increase for months, but threats are increasing after Trump left the Group of Seven summit in Quebec in early June. He left Canada by refusing to sign a joint statement, then called Canadian Prime Minister Justin Trudeau "very dishonest and weak".
On June 14, Trump expanded the trade dispute by announcing that it would impose a 25 percent tariff on $ 50 billion of Chinese products. Trump then raised the bar with $ 200 billion worth of salvos to China, followed by retaliatory tariffs from India, a warning on the profits of a European automaker, and the call of Trump. for a 20 percent tariff on automotive imports from the European Union
[U.S. stocks sag as U.S.-China trade war talk heats up]
then reports that Trump wants to ban Chinese investment in US technology as a way to protect our progress. Yet another report surfaced Friday on Axios that Trump wants to pull out of the World Trade Organization, which could result in global trade in a rotation. Mnuchin called the report "an exaggeration."
Investors reacted, even though Trump's economic team scrambled to calm fears. "19659030" As much as the government wants to tell you that we have a trade dispute, Wall Street tells us "The tech sector, of which FAANG – Facebook, Amazon.com, Apple, Netflix, Google Alphabet – stalwarts have borne much of bull market in recent months, has shown its vulnerability, even if it is up more than 500% since the trough of the bear market March 9, 2009. (Jeffrey P. Bezos, CEO of Amazon, owner of Washington Post.)
The gossip of the week was that of a confluence of factors, including investors taking quarterly profits and the typical seasonal weakness that the summer has begun.
[The Northwest Washington lifestyle trap: $500,000 in income and still can’t save]
"While President Trump's ongoing dialogue on rates seems to be leading stocks, investors should not be too surprised that the markets," said Wayne Wicker, Chief Investment Officer at ICMA Retirement. "C & # 39; is an election year, which usually presents additional challenges for the markets. Historically, the fourth quarter brings a bit of relief, which investors could keep in mind.
Jamie Cox of Harris Financial Group said the markets have sold because some companies warn that pricing will hurt quarterly profits.
"If profits are going to be lower than people expect from them, stocks will have to reevaluate prices," said Cox.
This means things could get worse before they get better. Whatever happens, expect more volatility.
"If he had just given us the tax cut and was watching Fox News until the mid-term elections," Yardeni said, "the market would be much higher today. ; hui ".
Read more:
When the President carries your portfolio
[ad_2]
Source link
