Market update: Trade talks fuel continued volatility


This week in the markets

  • Trade talks between the US and China pushed stock markets slightly higher on Wednesday. However, market volatility continued throughout the week.
  • This week, global stock valuations were at their lowest levels in five years and may have some investors looking abroad for new opportunities.
  • More than 10,000 Verizon employees accepted a buyout offer on Monday, cutting Verizon’s workforce up to 7%.

Stock markets rallied slightly midweek

US stocks closed slightly higher on Wednesday after Chinese officials and the Trump administration made an effort to convince investors that trade negotiations between the two nations would soon produce an agreement. The Dow Jones Industrial Average (DJIA) rose 0.6%, the Standard and Poor’s 500 Index (S&P 500) increased 0.5%, and the Nasdaq was up 0.95% at Wednesday’s close. Market volatility, however, continued throughout the week.

The stock market has been volatile in recent weeks due to the unpredictability of US-China trade talks — which continue to have a significant impact on industries such as the automotive industry. American-made vehicles were previously burdened with 25% trade tariffs by China. Investors have been nervous in recent weeks that if the US and China do not agree on trade, it could lead to additional trade tariffs, resulting in decreased company revenues and lower stock prices. Naturally, investors were enthusiastic about the talk of a trade agreement, which helped drive up stock prices midweek.

Global stock valuations at five-year lows

Global stock valuations have dropped to a five-year low this week — this means global stock prices are currently cheaper than US stock prices. Stock valuation is the method of calculating the value of companies and their stocks. A low valuation means that a stock is undervalued, and investors predict stock prices will soon increase. In other words, investors believe it’s similar to finding a great deal at your favorite store — you think prices will soon increase, so you stock up on merchandise. With global stock valuations so low, some investors may start looking at international investment opportunities.

As a MoneyLion member, you’re invested in a portfolio composed of different weightings of asset classes implemented with carefully selected ==exchange-traded funds (ETFs)== based on your risk preferences. At MoneyLion, we understand when diversifying your portfolio it’s important to think globally. That’s why all MoneyLion portfolios have ==international equity exposure==. This allows you to take advantage of investment opportunities around the world while balancing out risk and return.

Verizon offers buyout to 44,000 employees

In an effort to trim its workforce, Verizon offered a buyout program to 44,000 employees back in September of 2018. The voluntary severance package included up to 60 weeks of salary along with bonus and benefits for eligible employees and managers. On Monday, the carrier announced that approximately 10,000 Verizon employees (around 7% of the company’s workforce) accepted the buyout offer. Verizon’s stock price was down 2.72% at Wednesday’s close.

And now for your weekly ==Lionomics== wrap-up. ?

Lionomics: Finance made easy

This week in Lionomics, we covered ==economic expansion== and how it affects your investment portfolio. Expansions happen when the economy is in recovery mode and are a vital part of a business cycle. We also broke down the ==yield curve== and how it represents interest rates across the US. The yield curve is a key indicator of the overall health of the economy, so it’s an important concept to understand.

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