Leo: Our money expert, Kurt Pearson, is here this morning.
Nancy: Yes, and now that the election results have come in, what impact do you think we will see on our bank accounts?
Kurt: It’s kind of hard to determine how much of that rally yesterday was actually because of the election results. There are also many corporations reporting earnings which boosted the market somewhat yesterday.
But there is a sense that the whole quagmire in Washington will continue the gridlock, now I’ll continue and the market is kind of interpreting that as positive news. So the one party doesn’t have all the control and can, you know, ramrod some of their policies and their ideas through, so that’s perhaps the positive spin.
Of course, we have to wait and see after the rhetoric mode winds down what the actual action would be. And there’s some definite hot buttons that I want people to keep their eyes on moving forward.
Leo: It’s only been one day but how is the stock market really kind of interpreting those results?
Kurt: Well, they’re taking a look at some of those key issues like the health care issue, like the corporate tax – that’s a big one because we continuously use corporations, taking a look at moving overseas. And our corporate tax structure probably does need to be revamped.
But now with two parties in power it’s going to be maybe too difficult over the next two years to actually get resolutions on some of those matters and that presents a degree of predictability that the stock market likes. The stock market says, “Hey, at least if we know what the landscape would be like we could make some good projections, and kind of know how to act.”
Nancy: And really quick, any impact on interest rates?
Kurt: Yeah, and that’s a big one because the employment, and the unemployment numbers, and jobs, and job creation were the feature of some of the campaigns. And of course, that’s what the Fed is really looking at; and if those unemployment numbers continue to drop like they have been, since is the economy is, you know, getting back on its feet, and that you can begin to see an uptake on the interest rate.
So there’s a lot of moving parts here and it’s very important for people to keep on top of their investment portfolios, and keep monitoring how it impacts their direct net worth because there could be some surprises in the next three, six months for sure.
Leo: For sure.
Nancy: Close eye on it. Alright, Kurt Pearson, great tips, as always, and if you have any questions you’d like Kurt to answer you can contact him at Compass Financial, the number is 515-327-1020.