What 2018’s Market Mania Means for the New Year

By Selina Stoller, Summit Consumer Receivables Acquisitions, LLC ***

The stock market stumbled a bit at the end of 2018.  With all of the ups and downs, it resembles a roller coaster.

After an unpleasant October and November, the S&P 500 dropped 15 percent in value between November 30 and December 24. Even after an astonishing rebound of 5 percent the day after Christmas, the index finished the year overall 6 percent below.

The first trading day of 2019 showed signs of a wobbly market. In America, Apple warned of a sharp slowdown in China’s economy and weak sales in other emerging markets.

Investors are cautious about the effect of President Donald Trump’s stimulus package which could begin to fade soon. The threat of tariffs and increasing trade disputes have caused scaled back profit forecasts with some analysts moving expected earnings growth from 10.4 percent to 7.9 percent.

Some economic experts are also considering the current American administration’s policies to be problematic. The current government shutdown and inevitable future political battles have the potential to shake the economic ground.

One of the biggest economic concerns is the Federal Reserve itself. On December 19, its Open Market Committee delivered its fourth interest-rate increase of 2018 despite financial conditions tightening making the market less supportive of growth. Forecasters are worried the Fed’s landing point for interest rates will be above their estimate of a level where the bank is neither trying to boost nor slow activity

With all the doom and gloom chatter, America’s economy overall appears to be doing well. The labor market steadily increased in 2018, and consumer confidence is reported to be at a ten-year high.

  • 14 Jan, 2019
  • Josh Smith

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