Or a Repeat of 2018
PORTLAND, OR, October 12, 2019 /24-7PressRelease/ — October started with the worst two days to begin a month in 2019, and investors may wonder what’s next for the Stock Market. The last time the Federal Reserve flipped flopped, raised interest rates, and then took a sudden course change was 1995. In nineteen ninety-four, the Fed was concerned about inflation and had aggressively raised the target Fund rates from 3.0 to 5.0 percent. At the beginning of ninety-five, the Fed decided to stay the course and raise again in February only to throttle back with a cut in July. Two government shutdowns may have influenced its decision to cut again in December. What did the Stock Market do with a rising interest rate environment and political turmoil? It was up 35 percent! The lesson being the Market ignores politics but not economics.
The Stock Market was down in October of 1995, and another similarity to this year was the Fed cut when the economic numbers were strong. The question is, with the Dow still up over 13%, can the indices finish the year with a strong uptrend. The answer is yes, but not to beat a dead horse, unless the Trade Deal happens sooner rather than later. It’s clear by recent economic reports that the trade dispute is increasing the odds of the US going into recession in 2020. If the downward trend continues in economic reports, 2019 may be a closer replay of 2018, where the Market Indices went down three straight months to wipe out the year’s gains.
Written by Paul Schulz of Schulz Financial Management Securities offered through Cabot Lodge Securities LLC [CLS], Member FINRA/SIPC Advisory services offered through CL Wealth Management LLC [CLW] Home Office:200 Vesey Street, 24th Floor, New York, NY 10281-888-992-2268 Schulz Financial Management is not controlled by or a subsidiary of CLS or CLW
Paul Schulz has 18 years track record of providing clients with a successful edge. He has weathered the volatile market’s reactions brought about by the tragedy of 9/11 and the financial crisis of 2008. The markets will always face great uncertainty and investors need their portfolios to be given the heighten attention to take advantage of opportunities in order to mitigate risks.
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