Originally published on NewsWire.net
We’re currently in what many people describe as the longest-running bull market in history. It started in March of 2009, in the aftermath of the global financial crisis. Just over ten years later people are still bullish on the market. However there are a number of situations that can be seen as a drag on the market, and it could well be that this bull market may be on its way out.
J.D. Perry of Baton Rouge, LA oversees ViaCap Partners, the parent company of Moss Point Financial and affiliated Moss Point companies. He is a results-driven leader with over 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate. Mr. Perry analyzes the market with tenacity as well as enthusiasm and focuses on minimizing risks and building relationships to drive continuous growth and profitability.
The U.S. China Trade War
The current trade war between the U.S. and China is adding quite a bit of weight to the economies of both countries. Both individuals and companies are feeling the pinch as the prices of commodities and manufactured goods escalate as a result of soaring tariffs.
Many investors fear that a long term trade war could have ramifications not only for the two countries involved but also for the entire global economy. There is an enormous amount of interdependence between the world’s economies and a slow down in the two biggest could have global implications.
We’ve already started to see this play out. The stock market has suffered with each escalation of the trade war, most recently on August 23rd of this year, when the Dow dropped 600 points as President Trump tweeted that he wanted American companies to pull out of China. If the trade war continues, and particularly if it continues to escalate, the market may not be able to withstand the weight.
The Bond Market
In recent months investors have been flocking into the bond market. This often occurs when investors are spooked by stock market performance and feel the need to move money into safer, government fixed income. In fact, we’re seeing the most interest in bonds since November of 2008, during the financial crisis.
Another development that bodes badly for the economy is the recent inversion of the yield curve. The yield curve shows the yield of various U.S. bonds plotted against the time until they reach maturity.
Normally investors expect higher yields for longer-term bonds, due to the fact that their money is tied up longer. So the yield on the ten-year treasury is normally higher than the two-year treasury. The yield curve is said to invert when the opposite becomes true, and the two-year treasury has a higher yield than the ten. This event has been an early signal of a coming recession for every recession since 1955. While the lag between an inversion and a recession can last quite a while, the accuracy of the indicator has a lot of investors worried.
Is the Bull Market Ending?
Of course, we can’t know for sure, but there is certainly ample reason to think the longest-running bull market in history is losing steam and could be on its last legs. What happens over the next year or so could keep the market going or sound its death knell.
About J.D. Perry:
J.D. Perry of Baton Rouge, LA is a results-driven leader with over 20 years of experience in financial analysis, corporate cash management, asset management, environmental mitigation banking, and real estate. He is the former Chief Executive Officer of JP Global Capital Management, and the founder and President of ViaCap Partners, the parent company of Moss Point Financial and affiliated Moss Point companies. Before settling in Baton Rouge, J.D. Perry graduated from Lamar University with a Bachelor’s Degree in Finance and received a Masters of Business Administration from the University of Houston. Notably, he is also the holder of the Certified Trust and Financial Advisor (CTFA) certificate among others.