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A Very Positive Market Brief

A Very Positive Market Brief

A Very Positive Market Brief

The good market news keeps on coming, especially since we have just experienced the best quarterly start for the S&P 500 Index in 10 years. Further, the S&P had the best June return in 54 years, with a gain of about 7.2 percent. As for the Nasdaq Composite Index, June showed a 7.8 percent return, the best showing since the year 2000. For those still concerned about possible market effects from the U.S. and China trade clashes and new tariffs, there is some good news there, as well. The U.S. and China have declared at least a temporary truce to the trade war that threatened to upend world markets. And there’s more: At the end of July, it is highly possible the Fed will lower interest rates.

Here is what that might mean for you, the investor: If interest rates are lowered in the third quarter, it could affect your portfolio. In the short run, the stock market will be stimulated. But it also means that yields on bonds will be lower than if interest rates were going up. If you are a conservative investor with a lot of bonds, you will not have less per month than you had last year.

It is important to note than when rates go down, it signals that the economy is not in a strong position, even though your stocks go up in the short run. History shows us that over the next nine to 10 months, it is likely the stock market could show a downward trend. After we have a definitive answer from Federal Reserve Chairman Jerome Powell about interest rates, we will update you on how his decision will directly affect you and your portfolio. Our goal at JCN is to not only keep you informed about economic shifts that directly affect you, but always to communicate with you about the possible risks and rewards that are likely to present themselves.

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