23 Apr Quarter 1 Synopsis
There have been many developments in the economy as of late. Not just domestically but abroad as well. The yield curve drama, the complications with the Brexit and the European Union, and many other dramatic events in the political domain. This first fiscal quarter of the new year has been interesting to say the least. Although interesting isn’t all good, it isn’t necessarily all bad either.
As far as some things that have remained the same; The Federal Open Market Committee is keeping the interest rate of 2.25%. Although they raised the rate 4 times in 2018 they have yet to do the same this year. This means that the FOMC still have hopes that the market can recover. These hopes do not come without warrant. In the Domestic markets, the Dow Jones had an increase of 11.15% (up 349 points), the S&P sitting at 2,834, while the NASDAQ say significant gains of 1,145 points or 16.49%. The Russel 2000, although not in a poor performance, fell out of the front of the pack only up 14.18%.
Commodities have also had an increase, interesting regarding the performance of our Domestic markets. Gold has increased from $1,286 to $1,298 per ounce. The rise in price of precious metals is usually a tell-tale sign that investors are losing faith in the markets. The manufacturing metal Copper has also increased in value from $2.65 to $2.93 per ounce. This could mean an increase in the manufacturing sector of the economy. One could only hope with the numbers that have been presented to us. The manufacturing sector of the economy has been steadily dropping. This sector dropped by 0.1% in December, 0.6% in January, and only saw an increase in February of 0.1%. Speaking of the economy; the GDP growth rate did have a slight decrease from the year on the mark. Consumer spending however, did increase by 2.6% and business investment by 5.4%. Although the later number could be the cause of the decreased corporate taxes, there are still other numbers that should be focused on.
The federal governments deficit for the first third of the fiscal years sat at $544.2 billion compared to last years $391.0 billion in the same four months in 2018. Job Growth has had a small growth, adding 33,000 new jobs in February compared to the 311,000 new jobs that came about in January. Not the best numbers but still growth is happening. With consumers in mind it is important to consider consumer spending, as this is one of the more central sets of numbers which the Fed uses for gauging the rise and fall of inflation. In this sector of the economy, money available to consumers fell by 0.2% in January and rose again by the same margin in February. As far as consumer sentiment goes, not much of it is positive.
Much of this is due to the fluctuating economy. It is hard to stay positive when you do not know what is going on, or where your economy is going. The same case goes with your money. It is important to remember this when you are feeling confused as well. Not many avenues in life are well lit. It is because of this that we must take matters into our own hands. Do not sit and wait for the financial channel to tell you that the economy is doing good, or bad, or anywhere in-between. Use your time wisely and make sure that you and your finances are prepared for whatever turn the economy and market could potentially take, for better or for worse. Remember, Plan Smarter Live Better.