London, UK, ZEX PR WIRE – The financial world has been far more resilient than anticipated. This could be seen as a sign of strength within the economy and may show promise for short-term gains within stocks and shares of companies alike.
Wall Street’s roaring on despite the spread in the U.S. Delta variant, with many analysts predicting a downturn; it seems that this is not coming to fruition, with many major indexes currently holding steady at or near all-time highs. With an unemployment rate hovering around 5% since February 2017, most economists would agree that this is largely due to federal policies put in place by the Trump administration, which have lowered corporate taxes from 35% to 21%. It also helps when multiple countries continue to invest heavily into their economies, with many central banks having interest rates remaining at or near zero percent.
Ashford Capital Investments broker says, to make America great again, the newest Republican administration has enacted a variety of changes that have caused many American companies such as Pfizer Inc., Coca-Cola Co., Walgreens Boots Alliance Inc., and AT&T Inc. to bring their overseas operations back to the US, which has caused something of a boom within what is known as “inversions” – where a U.S. corporation merges with or takes over a smaller foreign competitor to re-domicile itself overseas and lower its tax bill.
What’s more, the Trump administration has encouraged deregulation, which has led to the investment world enjoying a record $1 trillion in new funds. With the stock market up more than 20% since Mr. Trump’s inauguration and several mergers and acquisitions topping that of any year since 2007, we may be witnessing the financial world going from strength to strength.
As well as this, there is still hope for infrastructure spending within the U.S., with an estimated total of $2 trillion required over 10 years if America wants to get back into shape, which many economists feel would create an even larger investment opportunity for investors looking at long-term gains. Despite all these things supposedly pointing towards our financial markets being resilient, some experts do predict that due to worries over inflation from increasing wages coupled with rising company debt levels reaching all-time and record highs within the last few months, as well as interest rates rising by another two to three 0.25 points in 2018 – there could be a storm on the horizon; potentially putting an end to this short-lived cycle of economic growth.
If these experts are right about inflation rising and central banks tightening monetary policy soon, we could see investors move from stock market cheerleaders into bearish naysayers more quickly than some may expect. While most economists would agree that if you have a diversified portfolio with stocks and bonds, you should be able to weather any financial storms which may arise in the future – likely, many will still have cause for concern.
This could be seen as a sign of strength within the economy and may show promise for short-term gains within stocks and shares of companies alike.
Many analysts have predicted a downturn in America’s markets, but it seems that the financial world has been far more resilient than anticipated. This could be seen as a sign of economic strength and may show potential for short-term gains within stocks and shares of companies alike.
Wall Street is roaring on despite the spread in the US Delta variant, with many analysts predicting a downturn; it seems that this is not coming to fruition, with many major indexes currently holding steady at or near all-time highs. With an unemployment rate hovering around 5% since February 2017, most economists would agree that this has helped fuel economic growth.
However, the U.S. Federal Reserve has announced that it will increase interest rates by another two or three 0.25 points in 2018 – which could potentially cause some investors to doubt their own financial position and even suggest that a recession is inevitable within the near future.
It seems as though there are still many doubters of this argument, with Wall Street feeling as strong as ever despite the rise in tariffs implemented with the US coupled with other nations around the world who have announced plans for higher taxes on imports from America due to Trump’s recent tax reforms and new tariffs being imposed on American goods entering certain countries such as Europe and Canada.
If this were not enough to worry about, many investors still worry that due to the rise in interest rates, bond yields will fall, which would mean a further investment loss is not out of the question.
In an economy as volatile and unpredictable as ours, it may be wise for investors to tread carefully if they decide to invest their hard-earned cash into higher-risk assets such as stocks and shares. A diversified portfolio with a variety of bonds and stocks seems to be the smarter way forward if you want to make sure your money is safe should anything untoward happen – however, despite all this doom and gloom – it seems that Wall Street still believes there are short-term gains to be had within the markets as we stand today.
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