Why Stocks Shrugged Off Iran Escalation
As the U.S. Government was reportedly sending additional troops to the Mideast, after killing a top Iranian leader, fear of Iran's asymmetric warfare tactics spread. The Standard & Poor's 500 stock index closed slightly lower than yesterday's 3,257.85 all-time high, ending on Friday at 3,234.85.
Here's why: The U.S. economy is expected to grow 2% after inflation in 2020.
That's not roaring growth, but the Fed's projections as of December 11th, 2019 were realistic and make it likely that the 10½-year old expansion will continue despite the new foreign crisis.
Although a war with Iran would present serious new risks, not to mention ethical questions, the evidence shows that the U.S. consumer's behavior is not much affected by foreign conflicts.
The U.S.-China trade war did not prevent the stock market from rising nearly 30% in 2019. Brexit did not stop the bull market. The bull market kept right on going.
The U.S. is exceptional among world economies because the consumer population makes 75% of U.S. gross domestic product and they keep growing in wealth by objective standards — despite foreign crises, politics, and ephemeral distractions.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.
© 2020 Advisor Products Inc. All Rights Reserved.
- Will M2 Be The Big Investment Story Of 2021?
- Test Your Knowledge Of Urgent Wealth Management Issues
- Neither Red Nor Blue, Tax Planning Is All About The Green
- Urgent Year-End Tax Planning Moves
- Investors Beware: SEC Is Struggling Amid Covid
- Food For Thought
- Starting A Business? Plan To Succeed
- Stock Market Rally Broadened In Past Three Months
- 3Q 2020 Wealth Management Report
- Income, Estate And Gift Tax Hikes Ride On Election Results
- 2020 Year End Tax Planning For Retirees, Business Owners, And Families
- Set Your Financial Priorities Right Now
- Poor Bond Outlook May Herald A New Stock Valuation Regime
- Family Wealth Transfer Opportunities Spawned By Covid
- A Five-Point Covid Diagnostic For Family Wealth Management