key economic events of 2019

Four Key Events that will Shape the 2019 Markets

Happy New Year to everyone in the Home At 30 community! After a few weeks of rest and relaxation with family, it’s time to get back into it as we start 2019. The past year has been a fun and challenging time creating content and ideas for our readers, and I’m sure this one will be the same!

There is a lot to be excited about this year, and also a lot to be aware of. As we all know, the past few months saw a steep stock market decline, government shutdown, and talks of a full-blown recession coming for 2019. What actually ends up taking shape this year is anyone’s guess. We can, however, look at a couple of key events that will shape the 2019 markets. These events will dictate how we save money and grow our financial independence. It’s never easy in a down market, that’s for sure.

Let’s have a look at some dates and events to have circled on your calendar this year. Your wallet and bank account will thank you for it.


Brexit

Brexit (Britain Exit), for those unfamiliar, is the referendum the UK voted on in the summer of 2016 to separate from the European Union. So, why is a British vote from two and a half years ago important now?

The UK is currently on schedule to leave the EU at 11:00pm GMT (that means London time), on Friday, March 29th. This means for the next three months, the entire world is watching in a “countdown mode” of sorts. There is plenty of opposition to leaving the EU – the original vote was 51.9% to 48.1% in favor. This opposition gets louder every day we get closer to 3/29.

While the original vote was a groundbreaking moment for the Eurozone, the fallout was never going to be immediate. Now that we’re on to 2019, Brexit takes a front seat once again.

Brexit news will continue to be a major trigger sending financial markets either up or down. It’s all based on the decision making of the UK government, which isn’t easy to predict. There is now talk of a second referendum vote, citing that the country’s opinion has shifted since the original vote.

A key date in the near-term to watch – the British Parliament is scheduled to vote on January 15th. This vote, called the “meaningful vote” by the press, is to accept or reject a plan for what the post-Brexit UK will look like.


Government Shutdown

I won’t get political with this one, I promise. The fact is that our government is currently in shutdown mode, primarily over the funding of a border wall in the south. As of today we are 18 days in, tied for the second longest shutdown in United States history. The record is 21 days, set back in 1996.

Outside of the financial markets, the shutdown has little effect on those of us working in commercial, non-government jobs. For the millions of folks working government jobs, however, the daily consequences are many. It’s in the best interest of ALL Americans that this dispute is resolved in Congress ASAP.

Every day that the shutdown continues, the financial markets become more and more unsteady. It is extremely difficult to put money into a growth stock ETF, only to have negative news out of Congress send the DOW down 600 points the next day. One thing we can predict though – as soon as the dispute is resolved we should see a huge day for equities. Until then, the shutdown is a giant question mark in an already uneasy market.

A key event to watch for: President Trump is scheduled to address the nation tonight at 9:00pm with a special announcement on the shutdown. The fallout of this speech will influence the markets for the rest of this week and possibly next!


The Mueller Report

Another momentous political event that we should see in 2019 will have massive market impact – the Mueller Report. Putting political affiliations aside once again, the fact is that we will see a huge swing once this report is released to the public. Which way it swings is anyone’s guess.

There is no set date for the release. It could come in February or it could be July. There might be some leaks here and there, but the report will likely hit the public one day randomly like a tidal wave.

One thing we can keep an eye on that will affect the global economy (as it relates to the Mueller Report) is the US House of Representatives. In January, power was handed over from the Republicans to the Democrats. This gives them the leverage they need to initiate impeachment proceedings against the POTUS if they choose to.

The Senate remains under Republican power, so it remains unlikely the POTUS will ever actually be kicked out of office. Any impeachment-related proceedings will have a huge impact on the financial markets, however, regardless of the outcome. An initial impeachment by the House could shave 1,000 points off the Dow in a day easily. From there, it could drag on for months of uncertainty. The POTUS being kicked out of office would send it even lower. Time will tell how 2019 goes with the Democratic Party in charge of the House.


(FOMC) Federal Reserve Meetings

We’ve done an in-depth piece on the Federal Reserve before. Their power over the US (and world) financial markets is unrivaled. It outstrips that of any politician or big bank out there, regardless of what you might hear from the MSM.

The FOMC is a series of eight meetings over the course of 2019. In these meetings, the Fed makes decisions on economic policy, namely interest rates. The first FOMC meeting will take place on January 29-30th. The markets watch these meetings like a hawk watches its next meal. Back in October, we saw an 830 point drop in the Dow. A key catalyst of that abysmal day was a rumor that the Fed would keep interest rates the same. Not even a formal announcement! If that doesn’t show you the power they have to influence our wealth, nothing will.

The Fed’s decisions this year on interest rates will have major impact on how low or high or markets go this year. As we sit on the edge of a “recession”, the Fed becomes more important than ever. Stock indexes (S&P, Dow, NASDAQ) entered correction territory in December, and everyone hopes that the Fed will bail them out with lower rates and relaxed policies.

The key metric to watch here is the movement on those rates. Interest rates staying the same or rising will see a sharp dip in the markets, at least initially. Any hint of lower interest rates will pump cash into equities and move the market back upwards. We need to wait and see what the Fed’s next move is.


Half the Battle

As we all know, it’s impossible to predict the market with certainty. There are plenty of bears calling for a recession. There’s plenty of bulls predicting a bounce-back year. What is possible, however, is having these key events in the back of your mind as you plan out a strategy for the year. Knowing is half the battle in this game.

It’s a very turbulent and risky time to be putting money in stocks, bonds, etc. Understanding the above key events for the 2019 markets, and how they will shape the year, helps us to make wiser decisions.


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Disclaimer:
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.

Author: Joe Savoia

Joe is a 2014 graduate of Northeastern University and currently works in a field sales role for technology company Acquia. He has worked internationally as one of Acquia’s earliest Australia-based employees and helped in the early stages to develop that region. Today Joe is based out of Boston and lives in Somerville, MA. Joe’s primary interests vary widely, including everything from robotics/AI to finance, blockchain, and the rapidly evolving world of tech we live in.
Four Key Events that will Shape the 2019 Markets was last modified: January 8th, 2019 by Joe Savoia

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