Markets Flat in the Short New Year’s Week & Geopolitical Tension Rising!
Welcome to Year 2020! This promises to be an exciting year based upon what may transpire with our 2020 Presidential Election and the campaigning over the next 11 months.
Typically I do not discuss politics in our blogs, however with the feeling that political news/events may have a significant impact on the direction of our economy/markets, you can expect me to discuss my opinion on how events will impact your money.
Markets Flat Last Week
In the Holiday shortened trading week the markets saw low volume with little index movement. For the week the Dow Jones Industrial Average was flat, the S&P 500 was off a mere (.01%), the Nasdaq Composite rose .2% and the Russell 2000 Small Cap retreated (.42%).
Over the pond, the developed market stock index, the MSCI EAFE was flat and the Emerging Market Stock Index rose .48%.
Bonds also rose in price last week as measured by the Barclays Aggregate Index .40%, which reduced the yield of the US 10 Year Treasury to 1.79% from 1.91% on 12/31/2019.
US Airstrike Kills Top Iranian General…. Tensions Rising!
Last Thursday, the U.S. launched an airstrike killing Iran’s top general, Oassem Soleimani. Soleimani was the head of the Iranian Revolutionary Guard Corps-Quds Force; a U.S. designated Foreign Terrorist Organization.
He and his forces were responsible for deaths and the wounding of American and coalition service members. He orchestrated attacks on coalition bases in Iraq over the last several months. He also approved the attacks on the U.S. Embassy in Baghdad last week. Immediately after the report, the global stock markets headed in the southern direction.
So the questions many have; what will happen going forward? Will tensions rise further? Will the stock markets correct?
I believe tensions will certainly rise further between the U.S. and certain countries. I also believe the stock market could have a minor correction. A minor correction after such a great year is to be expected anyway. We’ve had a handful since the current recovery began, March 2009.
The question I like to ponder when events occur; will the event stop US consumers from spending money, which is direct line to corporate revenues/profits which impacts the value of the stock allocation of your portfolio? Oil prices are rising which is typical with Mideast tensions however we actually produce and export as much oil as we import so at this time I do not expect this event to derail the US economy’s current expansion. However a brief correction could prove to be a positive going forward! As always, time will tell and we’ll keep a close eye as the events unfold.
SECURE Act Blog This Week!
I’ve already receive several calls regarding the new rules for Required Minimum Distributions and other parts of the new SECURE Act which is effective January 1, 2020.
Please look for a blog, midweek that outlines the major parts of the act and how they may impact your situation.
As always, we’ll review with each of our clients the impact and opportunities of the Act.
If you’re a non-client, please feel free to call or visit our website to schedule a complimentary consultation! Scheduling can be done online by visiting us here.
Don’t see a time that works for you? Give our office a call (856-354-3200) and see what other dates and times are available. It is THAT easy! Looking forward to speaking with you soon!