Wall Street in 2019: A Look Ahead to the 2nd Half
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What is the main topic discussed in this episode?
Here's your money briefing. I'm J.R. Whelan at The Wall Street Journal in New York. At halftime of a football game, the coach and players often shuffle their resources and efforts to make up ground, score points and win. In a moment, we'll ask the chief equity strategist to look ahead to the stock market in the second half of 2019. and see if investors should shuffle their resources. First, these money and market stories you should know.
What housing affordability trends are affecting renters in mid‑2019?
A new survey released by mortgage finance giant Freddie Mac says that more American renters believe home ownership is financially out of reach. Only 24% of renters said it was extremely likely they would ever own a home, 11 percentage points lower than four years ago. And 82% of renters said that renting was more affordable than buying, 15 percentage points higher than February of 2018. Meanwhile, rising rents also are creating hardships. Of the renters who moved in the last two years, 44% said they did so because they could no longer afford their rent. The biggest obstacle preventing renters from buying was the difficulty in saving for down payments and closing costs. The crunch is being felt by about 80% of millennials and members of Generation X. Those are people born between 1965 and 1980.
That, along with 71% of baby boomers who rent. And someone who did not have many affordability issues when it came to real estate was former First Lady Jackie Kennedy Onassis. The Wall Street Journal Real Estate Bureau reports the 6,400-square-foot house on Martha's Vineyard that she bought for just over a million dollars 40 years ago is on the market for $65 million. The main house includes four bedrooms with a formal sitting room with a fireplace, a drawing room, living and family rooms, a library, a dining room and a large kitchen.
How big is Jackie Kennedy Onassis's Martha's Vineyard property and why does it matter to the market?
There are also two outdoor decks, a den and two offices that could also be used as art studios. All rooms except the dining room overlook the ocean, and with the main house, which sits on 300 acres... Also comes a guest house with four additional bedrooms. Onassis' daughter, Caroline Kennedy, is listing the compound, and if it sells for close to the $65 million asking price, the deal would mark a record for a single-family estate on Martha's Vineyard. The current record set in January is $32.5 million.
We're at the halfway point of the year, a year so far that has seen steep market gains and some whiplash along the way. But it's time to look ahead to the second half of the year. So let's bring in Federated Chief Equity Market Strategist Phil Orlando. So, Phil, the S&P 500 is up nearly 20 percent since the start of the year. The markets have mostly cast aside spurts of bad news. with the exception of uncertainty over trade.
I think we're looking at sort of a barbell-shaped year. There's no question we've had a great start to the year. We have every confidence that we're going to end the year on a high note, with the S&P probably breaking the 3,000 level. But we are bracing for some chop over the summer.
Why is the S&P 500’s 20% gain so far in 2019 important for investors?
And some of that chop is domestic and some of that chop is international. And on the domestic side, the things that are worrying us is Fed policy. What is the pace and timing of potential rate cuts that they are contemplating? And then what is the status of this ongoing U.S.-China trade negotiation? We may know more about that with the G20 meeting coming up this weekend. So internationally, there are three issues that are hanging out there that will be resolved around Halloween, ironically enough. One is the Brexit deadline was moved out to October 31st. Second is Draghi's term, eight-year term as the head of the ECB expires on Halloween. We don't know who's going to replace him yet.
What domestic risks like Fed policy could create summer market volatility?
And then the Japanese are contemplating a third increase in their consumption tax on Halloween. And the last two times they've increased the consumption tax, the Japanese economy went into recession.
That's like a triple witching day, literally and economically.
It could very well be. So again, I think when the dust settles at the end of the year, all of these issues will be resolved.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–0:29
2
What housing affordability trends are affecting renters in mid‑2019?
0:29–1:54
3
How big is Jackie Kennedy Onassis's Martha's Vineyard property and why does it matter to the market?
1:54–3:14
4
Why is the S&P 500’s 20% gain so far in 2019 important for investors?
3:14–4:06
5
What domestic risks like Fed policy could create summer market volatility?
4:06–5:46
6
How could U.S.‑China trade talks and the G20 meeting influence Fed rate decisions?
5:46–8:05
7
Which international events around October could trigger global market shifts?
8:05–8:44
8
What asset allocation strategies—bonds, dividend stocks, gold—does Phil Orlando recommend?
8:44–9:34
Speakers
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