This week in the markets
- Concerns about a US-China trade deal pushed most major market indexes lower on Tuesday.
- The world said farewell to former President George H.W. Bush as he was laid to rest on Wednesday.
- On Tuesday, news about the future of Amazon Air had other air delivery services, like UPS and FedEx, nervous about revenue loss.
Concerns about a US-China trade deal helped push markets down
Last week, many investors were enthusiastic about the possibility of a trade deal between the US and China, which helped increase most major stock indexes. On Tuesday, however, that enthusiasm seemed to diminish. The Dow Jones Industrial Average (DJIA) dropped 3.1%, the Standard and Poor’s 500 Index (S&P 500) fell 3.3%, and the Nasdaq tumbled 3.8%. This sharp fall erased a chunk of the previous week’s gains and left some investors frazzled.
So what exactly happened on Tuesday?
- Announcements from President Trump may have helped rouse US-China trade worries on Tuesday. The President said he would be happy to sign a “fair” trade deal with China, but also left open the possibility that talks between the two nations could fail to bring a definitive agreement.
- The announcements also sparked concerns from companies, such as Boeing and General Motors, about the consequences of continued trade tariffs on steel and aluminum, which have increased the cost of some raw materials in recent months and caused volatility in the markets.
- Additionally, the bond market reflected some investor worry this week. The difference between the 10-year and two-year Treasury bond yields (which is the return investors realize on bonds) decreased. This means that the return an investor gets from a bond doesn’t vary much depending on the length of time it’s held -- which could make bonds less attractive to investors. Some experts consider this a sign of an economic slowdown.
As MoneyLion investors, it’s important to realize that market swings are normal. In fact, all three major market indexes still remain positive for the year (as of 12/6/2018). Those who stay in the investment game have a much greater likelihood of portfolio gains, so hang in there. Remember: Historically, the markets have always recovered and gained new ground over the long haul.
Rest In Peace, George H.W. Bush
The 41st President of the United States George H.W. Bush passed away on Friday, Nov. 30, 2018, at his home in Houston, TX. Bush served as vice president for two terms under Ronald Reagan and then as president of the United States from 1989 to 1993. The New York Stock Exchange ceased trading on Wednesday to mark the National Day of Mourning for the late President.
Amazon Air has UPS and FedEx SHOOK!
Amazon Air, which is the cargo airline name for Amazon’s freight delivery service, announced Tuesday its plan to use $1.5 billion to build a hub on more than 900 acres of land and eventually have more than 100 planes handling much of Amazon’s air deliveries. These plans could really hurt UPS and FedEx, which some experts estimate could lose up to 10% of their revenue to the tech giant by 2025. UPS and FedEx both saw stock price drops of more than 6% at Tuesday’s close. What will Amazon do next? Space travel? 🤔
And now for your weekly Lionomics wrap-up. 🤓
Lionomics: Finance made easy
This week, Lionomics taught you about the power of the Federal Reserve. Much like a superhero uses her superpowers to save humanity, the Fed has a few tricks up its sleeve to help protect us from economic distress. You also learned about the difference between the economy and the markets. It’s true, the economy and the markets are like two peas in a pod -- closely related and often considered inseparable -- but they’re not exactly the same. Learn why.
Not a member of MoneyLion yet?
MoneyLion helps you manage your finances effortlessly by offering a Zero-Fee Checking℠ account with 0% APR Instacash℠ cash advances, a Zero-Fee Managed Investment℠ account, 5.99% APR Credit Builder Loans℠*, free credit monitoring, and more. Come check it out in the MoneyLion app, or learn more at moneylion.com.
MoneyLion Banking account provided by partner bank, Member FDIC. Cash Advance requires MoneyLion Bank Account and Direct Deposit. See Banking and Cash Advance FAQs for more information.
MoneyLion Checking Account and Direct Deposit required.
Investment Accounts Are Not FDIC Insured • No Bank Guarantee • May Lose Value. For important information and disclaimers relating to the MoneyLion Investment Account, see Investment Account FAQs and FORM ADV. Broker-Dealer charges a $0.25 withdrawal fee.
*MoneyLion membership required. View full terms and conditions here.