Hold on to your hats!
December 4, 2018
Recently, stocks have delivered a wild ride. During Thanksgiving week, U.S. stock markets took investor uncertainty on the chin, suffering a 3.8 percent drop, which was the worst performance in eight months. Then, last week, stocks reversed course. The Standard & Poor's 500 Index and the Nasdaq Composite delivered their strongest weekly gains in seven years, reported Ben Levisohn of Barron's.
So, what changed?
Two things appear to have influenced investors last week:
1. The Federal Reserve may be becoming more dovish on interest rates. Comments made by Fed Chair Jerome Powell were interpreted to mean the Fed could stop raising the fed funds rate after December. Thomas Franck of CNBC reported:
"Powell on Wednesday said that rates were 'just below' the level that would be neutral for the economy – meaning they would neither speed up nor slow down economic growth. The comment diverged from a previous remark from Powell that rates were a 'long way' from the bank's aimed neutral level."
Some analysts have pondered whether recent rate hikes have been a mistake that will lead to recession.
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2. Trade tensions between the United States and China could be resolved. President Trump and President Xi Jinping will have a confab following the Group of 20 (G-20) meeting in Buenos Aires. Randall Forsyth of Barron's offered this insight:
"The best case that can be reasonably expected is for a truce to be declared between the United States and China, to allow talks to continue over the thorny issues of trade barriers and intellectual property. And, equally important, to avoid the consequences of the imposition of even more draconian tariffs on the world economy."
There is little doubt volatility feels a lot better when share prices move higher than when they move lower. While uncertainty remains elevated, we may see additional jolts up and down. Holding diverse assets and investments won't prevent losses during downturns but it can help minimize losses as investors pursue of long-term financial goals.
FABULOUS HOLIDAY GIFT IDEAS FOR YOUR PET…
If you're a pet owner – and most Americans are – you may be looking for the perfect holiday gift for your dog, cat, bird, bunny, or reptile.
Here are some of the indulgences available for today's pets:
•A stay at a luxury cat hotel. Why not give your favorite cat the holiday of his or her dreams? Five star catteries have been established in Yorkshire and Kuala Lumpur (and, possibly, elsewhere). The VIP package in England includes, "…bedtime stories, catnip experience, relaxing Spa package, or a juicy prawn plate from [the] a la carte menu."
• A case of pooch hooch. Breweries and pubs around the world have begun to accommodate our desire to share all aspects of our lives with our faithful canine companions. Patrons can bring their pets to the bar and buy them a drink or a case of dog beer. According to VinePair.com, "Dog beer is non-alcoholic, un-carbonated, and doesn't contain hops. It does contain malt extract, along with a bevy of other healthy-for-dogs ingredients, so you might think of it like a nutritional homebrew, without the fermentation."
This article was provided by Peterson Wealth Management. For more information, please call 775-423-8007 or visit PetersonWM.com.