By Peter Wechsler
President & Co-Founder, Franklin Retirement Solutions
[email protected]
The stock market has been on a roller-coaster for the past five weeks. It will most likely continue.
I just looked at the headlines in Yahoo Finance as I started to pen this column. Here’s what I see:
- Powell flirts again with a dangerous way to describe inflation: Transitory
- US growth forecast slashed over Trump ‘uncertainty’
- Fed Dims Economic Outlook, Citing Uncertainty Over Tariffs
- Dovish Fed Sees Slow Growth, ‘Transitory’ Tariff Inflation
- Stocks waver as Fed-fueled rally loses steam
- Wall Street is starting to shed thousands of jobs
- Short sellers have made $15B betting against Tesla and Nvidia
The market closed yesterday with the S&P 500 down 3.7% and the tech-heavy Nasdaq down 8.2% year-to-date. Not the end of the world but no fun either. After two excellent years in the market, a little drawdown could be expected.
From everything I’ve read, the two biggest issues weighing on the market are tariffs and inflation… along with layoffs, both in the government and in industry. For many economists and analysts, tariffs are the major concern. The fact that the president keeps changing his mind on the tariffs is frustrating the markets as investors hate chaos.
If Mr. Trump imposes the tariffs in April that he has repeatedly outlined, it could really ruffle investors and maybe send some shockwaves through the economy. And if the promised tariffs are imposed, look for inflation—the price we pay for goods and services—to jump in price.
The Fed would love to keep inflation in check and thereby be able to lower interest rates. But Jay Powell says the Fed won’t be able to lower interest rates if inflation increases. Quite a quandary. Could this lead to a recession? Questions there are no answers to.
Too much money at risk in the markets? We have several ways to lower your risk, both short- and longer-term options. All you have to do is match up calendars and come in with your concerns. Give us a call at 215-657-9200 or use the links below to find a time that works for you.
Until then, enjoy the first weekend of spring…
Peter