An Economic Forecast After A Positive First Quarter

The Means Report: Fehrman Investment Group Economic Update Graphic
The Means Report: Fehrman Investment Group Economic Update Graphic
The Means Report: Fehrman Investment Group Economic Update Graphic
The Means Report: Fehrman Investment Group Economic Update Graphic

We have finished out the first quarter and tax time.  What do you feel like are some positives for the economy?
Low oil prices continue to help the consumer, continued job growth, slight wage growth, and consumer spending continues to be a positives for the US economy.

It would be nice to focus on only the positives, but unrealistic.  What are some of the potential issues facing the economy?
Global economic growth is still slow, potential Federal Reserve mistakes, and earnings growth for the market are potential issues to derail the economy.

We are a global world what is going on in overseas economies?
Latin America and China continue to be a relative drag on the global economy and I believe these emerging markets will continue to be volatile in the near term.  Europe has seen some positive movement, but is in a slow growth mode ongoing.

We continue to see low gas prices.  What affect is this having on the economy?
I believe that low prices at the pump continue to help the consumer and put extra money in their pocket.  Low prices and struggling energy companies continue to be a drag for the stock market and earnings in the energy sector.

What are the recent trends in the real estate market?
Housing has continued a slow recovery nationally with some slow price appreciation.  I believe that tight credit for mortgages has hampered a quicker recovery in real estate.  I do think locally we have had better real estate bounce back with new companies coming to Augusta and the Cyber Command Center at Fort Gordon.

The election has been interesting so far.  How do you think the election in fall will impact the stock market?
The markets hate uncertainty, and one area that has been uncertain has been this election cycle.  I think that the uncertainty around the election is one reason for increased volatility.  This might impact businesses being more cautious and taking a wait and see attitude toward expansion.

What are your expectations and thoughts on the stock market for the balance of 2016?
We believe we will continue to see higher volatility and bigger swings in the market.  We still see a low probably for a recession this year and would expect mid-single digit returns in 2016.  While all investors have different goals, we would tend to err on the side of being more cautious this year and not overly aggressive.

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