This month, Jason Weaver discusses the election year, geopolitical risks and real estate.
Election Year
During an election year, the stock market typically rises no matter which party is in office. And on average, the S&P 500 has a gain of 6%, which has been the case since World War Two. Typically, investors will focus on same election-year issues, including the candidate’s tax and fiscal policies. Wall Street is currently expecting a Trump re-election in 2020.
Geopolitical Risks
Historically, the average market response to unexpected shocks has been modest and short lived. However, the reaction can be more severe when the economic environment is weak. In 2020, the attention to geopolitics in high and the attention to global trade is elevated. The frictions between the U.S. and Europe have been rising. The U.S. and China signed phase 1 of their trade deal. However, further developments are uncertain.
Real Estate
Real Estate is expected to be a bright spot in the 2020 economy. The rates are remaining low, which should keep refinancing unabated. Home buyers could expect to see affordability remain constant or even improve this year. With that, consumer sentiment towards buying a home has become more positive. Also, building permits have recently exceeded expectations.
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December 2019 – 3 in 3 Market Update