Economic and Stock Market Commentary 08/19/2019
Stepped-up volatility has become the order of the day on Wall Street, something that had not been the case for much of this year. Indeed, stocks had risen steadily through the opening half of 2019 and into the first weeks of July on the strength of further economic growth, solid earnings improvement, the likelihood of additional interest-rate relief from the Federal Reserve, and some comparative calm on the global front. Recently, though, that calm has been shattered, and the market has gone into an alternating, and unsettling, pattern of sharp declines, subsequent recoveries, and further
Offshore issues account for much of this seesaw action, with the back-and-forth in our country’s trade rift with China and mounting protests in Hong Kong
The seas are less turbulent on the home front, where the economy continues to press forward, if unevenly; the Federal Reserve appears bent on fully supporting the business upturn; and earnings still
All eyes will soon be on the central bank again. To wit, the Fed, which cut interest rates at its July FOMC meeting (for the first time in more than a decade), seems likely to do so again at its gathering next month. There also is a good chance—with heavy buying of
At such times, it is best to keep calm and carry on, to paraphrase the motivational poster employed by the British government during World War II. Clearly, the last few weeks have been unsettling, but as this long bull market has shown, panic selling on market declines has been ill considered.
Conclusion: We continue to believe that investors should exercise steadfastness in their equity market strategy.