Looking Back at July
Worldwide economies have not been as robust in recent months as the United States economy. During the month of July, the U.S. economy was very strong, and the market reflected this with the S&P hitting all-time highs, passing the previous 2950 mark. This discrepancy between the U. S. economy and the rest of the world has caused the Federal Reserve (the Fed) to look at interest rates. At the August 1st meeting, the Fed lowered rates by a quarter percent, not because our economy was slowing, but because of the overall global economic environment. This, along with continued tariff talks, caused the market to move down the last day of July and going into August.
Looking Ahead to August
Investors are trying to digest the current state our economy, as well as all economies. Also, President Trump has indicated that he may add new trade tariffs against China. The new tariffs could go into effect in September. China has since decided to devalue its currency to stabilize its own economy. Since the beginning of August, the markets have been trending downward as investors digest this slew of new information. The markets are now experiencing more of a speed bump decline, as opposed to a new long-term direction. Corporate earnings, as well as the strength of the U.S. economy, should help stocks move to the upside in the coming months, once all of the new information is digested.
As we begin to plan for future market movement, we are keeping an eye on events that may influence the market, and more specifically, things that can change the course of the economy. As we see opportunities to take advantage of new market highs, we will begin to adjust some of portfolios. We may also adjust some portfolios to match a more conservative outlook. We do feel that eventually the market will soften, so it is important that portfolios are balanced. We will continue to closely monitor developments in the economy, as well as global events that effect the market.
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* DISCLOSURES: This report is for information purposes only and is not a recommendation for any particular security. Mention of individual securities should not imply that we own the security or have owned it in the past. In addition, the information provided here should not form the basis for investment decisions. Past performance is no guarantee of future results. LifeSteps has not independently verified or attested to the accuracy or authenticity of the information, including any investment performance measurement.