What’s In Store For 2013
As we start the New Year there are many forces in play that can have an influence on the stock markets, not only in the United States but around the world
All eyes continue to be on Washington as the Fiscal Cliff issues continue to dominate the airwaves.
Taxes and tax rates have been established, however, the debt issues will remain in the headlines as Washington gears up for another round of budget talks and budget battles in February.
Everyone is hoping for a permanent solution that makes the government’s finances sustainable. The key decision makers will find it is better to determine a way to overcome an avoidable and unnecessary recession, buy time to actually propose and vote on competing long-term fiscal policies, and do something to help restore confidence in Washington.
The Federal Reserve will continue its bond buying program, Quantitative Easing (QE) for the remainder of 2013 buying the Fed more time to determine monetary policy and the health of the American economy.
On the interest rate front, the Fed will keep interest rates at their current levels through 2013.
Europe faces major hurdles in the progress towards a more fiscal European Union. Germany will continue to try leading Europe to a more balanced and stable economy and avoiding a possible European recession.
Globally, Asia may finally be picking up momentum as Japan’s economy is finally showing signs of a recovery. China remains the big question mark as they try to continue the remarkable growth rate that they have experienced over the past several years.
Closer to home Latin America looks to remain stagnate with gross domestic product growth around 2.5 percent.
At home, bright spots in the U.S. economy include stronger U.S. auto sales, a slow but steady improvement in the housing markets and lower oil and gasoline prices.
Consumer Credit is on the rise as well as Consumer Confidence. Employment numbers continue to improve showing a slow but positive recovery.
A slow start to the year may give way to stronger markets as we head into the summer. As always, a balanced well diversified approach tends to work the best in these uncertain times.
Editor’s note: Eric Loucks has more than 30 years of experience in the financial services industry, and has been an Investment Officer with the LANB Investment Group for the past six years. Loucks grew up in Los Alamos, spent the majority of his career with Charles Schwab in San Francisco and Phoenix and returned to New Mexico six years ago.
- Look for Money IQ every Wednesday in the Los Alamos Daily Post.