Written by Chris Fasciano, Chief Market Strategist in the Investment Management and Research Group at Commonwealth Financial Network.
The first half of the year has left investors with many questions about the path ahead for the economy and markets. Unfortunately, there haven’t been many concrete answers. Tariff announcements and trade negotiations have commanded the room. Then there is the budget bill, which includes tax and spending cuts. It’s also being negotiated at a time when concerns about the country’s deficit have grown, given Moody’s downgrade of the U.S. government’s credit rating. Last but certainly not least, the Fed has yet to lower rates this year.
Turning to the markets, we saw equity markets rally to start the year—and then sell off 20 percent, led by the leaders of the past several years (i.e., the Magnificent Seven). Just when concerns reached their peak, the markets rallied more than 20 percent. While also volatile, 10-year Treasury yields began the year at 4.5 percent but remain in about the same place now.
Given this backdrop, the key question remains: where will the economy and markets go from here?