Our Thoughts

FJY News to Know #3

It sure has been a crazy few weeks with a lot of topics to cover: China, the Stock Market, the shutdown, etc. While there are so many newsworthy pieces, here are the top 5 news stories that matter for your financial future.

China Matters

Keep your eyes peeled on the developments this story will bring. China matters significantly to the economy. Whether it’s Apple affected by lower sales or higher tariffs that are expected to reduce broad profits across many businesses, China is a major player for the long-term. Because this directly affects our market and decisions made, it’s a key story to keep tabs on from an investment and financial planning standpoint. The Fed realizes this and the market watches the Fed closely. Keep an eye on the next 90 days during the negotiating period, but do not hold your breath, as China may be able to wait Trump out. We will be watching this one closely! Article Source: Forbes – Kenneth Rapoza, Senior Contributor

Investment Consideration: High-Yield Savings Accounts

Something to consider when you’re stashing cash away for your Emergency Fund: High-yield savings accounts outperformed the stock market last year! Investors need to take advantage of this since rates can be as high as 2.4%. If you do not seek to make the most from your emergency fund reserves with higher interest-bearing accounts, banks will keep the spread, not you. Article Source: CNBC – Jessica Dickler

Market Watch Alert: Saudi Arabia is Cutting Oil Production

In hopes of bringing the price up, production of oil in Saudi Arabia will be reduced. Given the cost to get it is $4 a barrel, it will be a considerable move. Previously, they had increased production in October and November, causing the price to drop below $60/barrel. The goal? In an attempt to quell price volatility concerns, reduce production by almost 800,000 barrels a day to drive the price up to $80/barrel. Analysts project this is likely a temporary move. Predicting an increase in demand by the 2nd half of the year, there’s the potential for movement that could raise prices back to the $80 level, which Saudi needs to avoid dipping into reserves. Article Source: WSJ – Benoit FauconSummer Said

Taking a Look Back: Shutdowns & the Stock Market

Let’s go back in time. History sometimes repeats itself and we’ve seen stock market reactions to government shutdowns before. What do we observe when we look at past government shutdowns and how the stock market reacted (or didn’t)? Trends that might make us feel a little bit better about the financial outlook of our investments. Most might think the government shutdown is bad for the market; however, reviewing the data illustrates the opposite. Article Source: The Motley Fool – Jordan Wathen

Stock Market ShakeUp: New Exchange in the Works

Powerhouses, UNITE! Nine banks and investment brokerage firms (including Fidelity Investments and Morgan Stanley) are partnering to create a new Stock Exchange. What does that even mean? Opportunity. And of course, research. This news is still developing, so we’ll have more on this story coming soon. We’ve got a few resources in the works to help navigate this new space. Until then, here’s what we know so far:

  • The new market will be called Member’s Exchange, or MEMX
  • NASDAQ, ICE, CME (rival exchanges) all fell on the news
  • Incumbent exchanges are under fire for execution inefficiency, aging security, and inflated fees from SEC
  • This isn’t the only startup exchange, but this one has some pretty big names in it.

Article Source: CNBC – Thomas FranckKate Rooney