2018 Second-Half Outlook: More Market Volatility?
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What is the main topic discussed in this episode?
Your Money Briefing. Money and Market Stories from The Wall Street Journal. Welcome. This is Charlie Turner in New York. Does Wall Street expect markets to break out of their volatile ways in the second half of 2018? In a moment, J.R. Whalen speaks with Jeff Kleintop, Chief Global Investment Strategist with Charles Schwab. First, these money headlines. You're in the market to buy a home. No savings? No problem. The Wall Street Journal says there are a growing number of services that help borrowers cobble together the funds to buy homes. These companies, startups, and established players in the housing market alike say they're offering options for borrowers who have good credit and income but are struggling to save.
For example, there's HomeFundMe, an online site launched by GMC Financial where users can crowdfund donations. One startup, Loftium, will supply up to $50,000 for a down payment if the home buyer agrees to rent out a room on Airbnb and share the income. A few organizations like Unison Agreement and Landed offer shared equity contracts through which buyers get money for their down payments in exchange for pledging part of the home's future value to investors like pension funds or foundations. And some banks, including Bank of America and Morgan Stanley, have programs through which young adults can get a mortgage with nothing down if their parents pledge investment assets as collateral.
How does trade uncertainty shape the market outlook for H2 2018?
A big concern by some observers is that programs like these that help borrowers could actually worsen the housing shortage. The Wall Street Journal's Moneybeat team says the world is still awash in easy money. A decade after the financial crisis, major central banks are still injecting a heavy dose of stimulus into the global economy. The European Central Bank will continue its bond-buying program until at least December and could further delay its conclusion.
What short-term market headlines and housing funding trends should investors know?
The Bank of Japan's program is still firmly in place. And though the U.S. Federal Reserve has trimmed its bond holdings, its balance sheet has only shrunk slightly. All told, the three central banks had balance sheets worth $14.6 trillion at the end of last month, according to Haver Analytics. That's up from $13.7 trillion a year earlier. Money Beats says fast economic growth and stimulative policies are a combination that should support financial markets. But throwing in tax cuts and higher spending, there's also a risk of creating conditions in which the economy gets too hot and could help speed up the Federal Reserve's schedule for raising interest rates. Coming up, J.R. Whelan will talk with Jeff Kleintop about what the second half of the year may look like for financial markets.
This is your Money Briefing from The Wall Street Journal.
Welcome back, everybody. We're at the midpoint of the year, and whether it's consumer confidence, record low unemployment, the threat of tariffs, or the economic health of Europe and Asia, there are myriad factors and moving parts that cause question marks to emerge in terms of what we can expect from the U.S. economy in the second half of the year. For some answers, we're joined by Charles Schwab Chief Global Investment Strategist, Jeff Kleintop. So, Jeff, let's start with the stock market. Still at historic highs, but we often see dramatic swings in response to U.S. domestic and and foreign policy. Should we expect more of the same going forward?
The trade issues are clearly the number one risk for the second half. Absent those issues, the economic and earnings picture should look pretty good. We've got a backdrop of broad global economic growth. There are 189 global economies. Right now, 185 of them are growing, including the U.S. That breadth of growth is should be a resilient anchor to help continue to drive earnings growth. Of course, trade presents a pretty significant issue. We see it in some of the PMI data. So the purchasing managers' indices, we just got them for the month of June. And I think it's interesting because the manufacturing components of those indices, for example, in Europe or Japan or even the U.S., continue to slide.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–1:23
2
How does trade uncertainty shape the market outlook for H2 2018?
1:23–1:49
3
What short-term market headlines and housing funding trends should investors know?
1:49–6:37
4
Which global central bank policies are still affecting markets a decade after the crisis?
6:37–9:40
Speakers
3 identifiedMore from WSJ Your Money Briefing
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