Don’t let volatility get you down.
Global selloff. Quick comeback.
Investors boomeranged from stocks to safe havens and back as trade tensions between the United States and China intensified last week. The Economist reported:
Tariffs strike again.
The Federal Open Market Committee completed what it called ‘a mid-cycle adjustment’ with a quarter-point rate cut last week. Some investors were unhappy when Fed officials implied there would not be another reduction this year. They’d been hoping for at least one, reported Barron’s.
It has been said there are two sides to every story. Just look at world financial markets. Stock markets and bond markets are telling very different stories.
In the United States, stock markets were blue ribbon winners last week.
Did last week mark the start of a new policy for the Federal Reserve?
The U.S. Federal Reserve has a reputation for providing little transparency about the timing and direction of potential rate changes. That reputation was challenged last week.
The bulls are running.
Last week, the Standard & Poor’s 500 Index set a new record, closing above 3,000 for the first time. Other major U.S. stock indices also finished at record highs, reported Barron’s.
What will the Federal Reserve do now?
In the infamous words of Mortimer Snerd, “Who’d a thunk it?”
Everything went up – and that’s unusual.
Randall Forsyth of Barron’s explained, “Like our major political parties, the stock and bond markets seem to live in two different worlds these days. The former sits at record levels, suggesting we live in the best of all possible worlds. The latter sees things as bad and only getting worse.”
Are we on the cusp of change?
The United States is doing quite well. Randall Forsyth of Barron’s reported: