Eq: Total Market
One of the big worries that many analysts have about what could end this relentless bull market is the prospect of a global trade war. Nations may turn to constantly trying to undercut one another in a fruitless race to outcompete that could damage all economies involved. Well, the odds of that occurring are looking stronger today as President Trump has just issued a stark warning to China—the US’ largest and most contentious trading partner. The message was the president’s approval of broad tariffs on Chinese solar panels and washing machines. Beijing reacted angrily to the new tariffs, saying it had “strong dissatisfaction”.
FINSUM: We don’t know where to stand on this issue. On the one hand we firmly believe that countries need to and should protect themselves from unfair competition. However, in a larger scope, such efforts can seem more like winning a battle and losing a war.
With the stock market as nuts as it is, there has been preciously little talk about the real estate market. While housing did somewhat dodge a bullet because interest deductions were not entirely done away with in the recent tax overhaul, some think the market is ripe for a big fall. By some indicators, the market is overheated, with hefty price gains and wide optimism, leading some to hear echoes of 2005. However, generational factors seem likely to bolster the market as Millennials age into home ownership and Baby Boomers sell their homes and move into assisted and planned communities.
FINSUM: The market probably won’t fall legitimately until we have another recession. However, given the fact that Millennials (the largest generation) are just entering the home buying age, it appears there will be robust demand for years.