All the major US stock indices are at record highs, but there are some investors on Wall Street who are worried the party is almost over. Ted Bauman, an editor at Banyan Hill Publishing, believes there are certain factors that will end this bull market. The factors that worry Mr. Bauman the most were the rising interest rates and the ongoing trade war with China. President Trump feels the United States is losing in terms of trade and feels that tariffs are the only way to even the playing field with its trading partners. Ted Bauman pointed out that many large US corporations do a lot of business with China. If China were to retaliate because of the tariffs placed on goods, corporations doing business in China would be hurt financially and it would eat away at their profits. Stocks on the major indices would be affected and the share prices would decline due to lower earnings.
Ted Bauman firmly believes that the federal reserve is to remain hawkish regarding interest rate hikes. Fed chairman Jerome Powell still believes the economy is doing well and expects further rate increases. If the federal reserve continues this path, this will put downward pressure on the stock market. There are many financial analysts who have been hinting to a fed funds rate of three percent being enough to cause a bear market. Ted Bauman believes that it is a four percent fed funds rate that will kill the bull market in equities and he believes that if the economy continues as it has been, this will happen in 2020. However, he feels the trade war is likely to bring the bull market to an end even quicker.
Ted Bauman is not a stock picker, but rather an economist who likes to take a look at the broader picture involving the markets. He earned his degree in economics from the University of Cape Town after he emigrated to South Africa. He specializes in low-risk investing strategies and asset protection. He feels now is the time for investors to start protecting their wealth because there are so many factors that are warning of a death to this current bull market.
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