By Don Schreiber, Jr. – WBI Founder and CEO
We’re about to take off into 2019 and it’s looking like a bumpy ride. In order to avoid market turbulence, what could make 2019 great again? Here’s a best and worst case scenario, as excerpted from our latest Bull|Bear Radio podcast episode.
After the Fed raises rates in December, they stop, they pause, they don’t put any more interest rate pressure in the system. If we get a complete stand-down on trade and tariff potential economic fallout – not only reconciliation with China but Europe, Japan, everywhere – that will add to the positive. And then what we need is another massive fiscal stimulus program. Infrastructure spending could drive the economy to a sustained 3% or 4% level. That will get the market rocking and rolling.
Maybe it’s not 2018, maybe it’s early 2019, but if the Fed peels it back and we get an infrastructure spend plus a resolution of trade wars, the market could respond well. That’s our best-case scenario.
Worst-case scenario would be the Fed staying on the gas pedal, and not providing a clear indication that they’re going to stop hiking interest rates. And if nothing happens in terms of an infrastructure bill, that’s not going to be good for markets. What would be worse is if the political dynamic in the United States gets even more toxic. If there are no trade deals, no regulation, no reduction – the markets are toast next year.
For more on this topic, listen to Bull | Bear Radio #52: Exercise Caution and Buckle Your Seat Belts
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