Today we have a guest post from Dave A. Isaacson, a senior investment strategist and senior vice president with Wells Fargo Private Bank. We asked him to take the temperature of the current market for investing now that we have entered the second quarter of 2015.
The first three months of 2015 have been very interesting for US and global markets. A majority of the volatility has been generated by oil, currency markets and the change of monetary policy in the United States and the Euro Zone. This has created more volatility in the markets, volatility which we expect to continue throughout the year.
For every $.01 drop in the price of gasoline, there are $1 billion in savings for Americans. The drop in gasoline prices from $3.70 (June-2014) to $2.41 per gallon at the end of March has saved Americans $129 billion at the gas pump. Naturally, we Americans cheer this savings … so why does the stock market go down when oil goes down? Isn’t the drop in oil/gasoline a good outcome? The markets have been trading oil as a proxy for global demand. As oil goes down, worries of a slowing global economy increase resulting in a negative impact on the markets. This worry of slowing economies is more specific to the Euro Zone and China.
Despite additional fluctuation in the equity markets, we expect 2015 will be a positive year. The US economy continues to make progress with unemployment, retail sales and housing, but we do expect to have a .25 to .50% increase in interest rates this year by the Federal Reserve.
Interested in learning more about the state of the market and how that is affecting housing in the US right now? We’d love to answer your questions, or put you in touch with one of our trusted advisers if we don’t know the answer. Questions like whether it is the right time to buy are sell will be different for each person, and we are here to provide you with honest, trustworthy information and advice. Contact us!
*Photo courtesy of Flickr user Vincent Lock.
File: first quarter of 2015