INVeSTOR rESOURCES

Market Currents

 

The advisors at River Wealth are committed to enriching investors by sharing their insights and understanding of the market by regularly publishing the Market Currents in our quarterly Currents Newsletter.


Second Quarter 2018

Domestic financial markets expanded modestly during the second quarter of the year, while broad international markets reclaimed some of the ground lost during the first quarter. The persistent news, regarding the escalation of trade tension and their potential economic impact, has kept markets jittery. Nevertheless, domestic economic indicators remain positive, and the Federal Reserve appears steadfast in their plan to normalize (raise) short-term rates. In addition, in the early stages of earnings reporting season, the majority of reports have been positive with upside surprises.     

Global Economic ConditionsClouds have rolled in recently over the global economic situation. Any progress in North Korea has been offset by increased trade friction. The implications, thus far, have primarily surfaced in foreign equity and currency markets. Losses in international equities, which are partially a function of an appreciating U.S. dollar, have also been fueled by declining market sentiment, as investors remain concerned about the outcome of trade discussions

Corporate Earnings ­– Corporate earnings growth has accelerated largely boosted by the recent U.S. tax overhaul, which significantly reduced corporate tax rates. Expectations for 2018 remain optimistic as analysts project double digit earnings growth to continue. Thus far, the majority of companies reporting second quarter earnings have provided shareholders with positive reports. Improved earnings numbers have kept fundamental valuation measures steady, giving the market room to expand

Domestic Policy Activity Leading up to the November elections, it does not appear that any policy activity will occur domestically with the capacity to materially impact financial markets.

Central Bank Activity, Rates and InflationThe Federal Reserve is on track to increase short-term interest rates four times this year. Despite an expanding economic and employment situation, rates remain relatively low and modest inflation numbers have given the Fed room to act gradually. There is a widely held expectation that rate increases will continue over the next few years

Financial market conditions have become considerably more volatile this year, and we are starting to see divergent returns across different investment asset classes. Although it has been a while since we last observed a divergence of returns, it is a fairly normal condition over relatively short time periods. From a longer term perspective asset returns are more consistent with risk. We encourage you to remain focused on long-term objectives.  


Important Disclosures:

Please note that it is the intent of your Plan to be 404(c) compliant.  This means that you will receive sufficient information through various documents to make initial and ongoing investment decisions and that Plan fiduciaries are relieved of liability for losses resulting from participants’ investment decisions.

In addition, fees shown on your brokerage account statement listed as “Other Plan Fee” are administrative fees.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.  The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

Please note that this content was created as of the specific date indicated and reflects the author’s views as of that date. It will be kept solely for historical purposes, and the author’s opinions may change, without notice, in reaction to shifting economic, market, business and other conditions.

Any information contained herein obtained from third-party sources is believed to be reliable, but its accuracy or completeness is not guaranteed. 

Indices are unmanaged, do not incur fees or expenses and cannot be invested in directly.

 

 

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The advisors at River Wealth are committed to enriching investors by sharing their insights and understanding of the market by regularly publishing the Market Currents commentary and the quarterly Currents Newsletter. Sign up for your complimentary subscription today.

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