Home|Who We Are|Our Services|Resources|News Center|Contact Us|Client Access
More Articles  Printer Friendly Version

 

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, January 3, 2020, 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.


1 For each period, the median is the middle projection when the projections are arranged from lowest to highest. When the number of projections is even, the median is the average of the two middle projections.

3 The range for a variable in a given year includes all participants' projections, from lowest to highest, for that variable in that year.

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.


Email this article to a friend


Index
Stocks Dropped Last Week But Data Confirmed Economic Recovery
Amid A Mixed Week For Stocks, A Strong Recommendation
Is A Stock Bubble Bursting?
S&P 500 Breaks Record For A Second Week
S&P 500 Breaks New Record; Small Business Picture Is Different
As If Coronavirus Never Hit, Retail Recovers
Confirming Recovery Is Under Way
Despite Grim Headlines, Stocks Rose Sharply -- Why?
The Paradigm Shift In Valuing Stocks
Retail Sales And Housing Starts In June Reveal Recovery's Shape
Keeping Perspective In An Unreal Environment
Economic Fundamentals Recovering As Stocks Surged For the Week
Stocks Swing Wildly As Economic Recovery Begins
Dog Days Of Summer In The Economy
V-Shaped But Full Recovery Is Long Off
Covid-19 Causes A Good Surprise

This article was written by a professional financial journalist for Responsive Financial Group, Inc and is not intended as legal or investment advice.

©2020 Advisor Products Inc. All Rights Reserved.
© 2020 Responsive Financial Group, Inc | 204 W Wing St, Arlington Heights, IL 60005 | All rights reserved
P: 847-670-8000 | F: 847-590-9806 ben@rfgweb.com |
Disclosure | Contact Us
Responsive Financial Group, Inc. is a fee-only registered investment advisory firm in the State of Illinois. Information on this site is compiled from multiple locations and is believed to be accurate. Incorrect information may come from these outside sources. Should you notice anything please notify us immediately. Thank you!