Charts are in the GREEN this afternoon as Wall Street comes closer and closer to the end of yet another trading week.
Though the chance of investors ending this week with a glimmer of hope for the days ahead is currently high, this hasn’t lifted the spirits of several on Wall Street as discussions begin to weave their way in and out of trading rooms across the globe that another recession could be on its way.
Today, we take a look at what could be causing this alarm among investors and what we can do to prepare for what could turn out to be a rough few months.
An Uncertain Future
It was at the lowest points of the previous shut down that the U.S. government, under both the Trump and Biden administrations, decided to start handing out wads of cash to U.S. citizens, hoping that this stimulus would help give the country’s weakening economy just the boost it needed.
While there is no doubt that the intentions of these stimulus payments were good natured, in hindsight, we can’t help but wonder if they were all that effective at anything except helping the national deficit work its way to a whopping $3 trillion!
Despite multiple checks being deposited into millions of bank accounts across the country (and many Americans willing to take said payments) today we still find ourselves with a weakened economy and an uncertain future. And with tensions rising overseas, higher prices becoming the norm, the continued devaluation of the U.S. dollar and the threat of yet another mandated quarantine on the horizon, it could be just a matter of time before the U.S. economy falters once again, leaving its mark on not just the United States, but the global economy as a whole.
Just this week alone the U.S. yield curve fell to 110 basis points when measured by the five and thirty year yields. Experts will tell you that a flatter yield curve indicates growth is likely to slow in the months ahead and with the upcoming month of October being known as the most volatile of trading months, many traders may be hoping for the best but are still preparing for the worst!
A Global Concern…
Naturally, the side effects of the continued spread of Covid-19 and all its variants are not only felt within the U.S. borders, but all across the globe.
… And while the United States struggles with its own problems, other nations such as China are having their post-pandemic growth threatened as well as Chinese officials also mull over further lock downs aimed at slowing the virus’s spread. As a major exporter, relied upon by hundreds of nations across the world, a Chinese shutdown could have just as much an impact on the global economy as a U.S. shut down would. And when one domino falls, it’s just a matter of time…
Trade Smart!
While talking to Fox Business, Bank of America chief investment strategist Michael Harnett suggests that a lack of consumer confidence could be resulting in the “rising risk of an autumn flash recession that is likely to be revealed in a sharp drop in global purchasing managers indexes.”
Harnett goes on to warn investors of negative returns for stocks and says investors should own quality defensive names into year-end while continuing to stick to his overall long-term view that inflation will win out over deflation in the end.
With this news in mind, it’s clear to see that this fall could be a rough time for many traders, but should Harnett’s predictions be correct, loyal traders will be well rewarded as they make their way towards the glimmer of light at the end of their investment tunnel.
Learn More Here…
If you’re interested in learning more about future market health as well as today’s market updates, you’re not going to want to miss the latest episode of Ask the Pros where host Celeste Lindman sits down with some of her favorite market panelists to discuss these topics and more!
P.S. – If you’re interested in learning how a simple $5 investment could change your life, do yourself a favor and CLICK HERE NOW!