The vast majority of financial analysts, business owners, and retail investors had their hopes up for economic recovery to overcome the current slowdown and emerge even stronger with a second wind nearing the tail-end of summer. However, we’ve encountered nothing short of a rocky start to September, with most positive outlooks and forecasts now losing out to not-so-pleasant news and graphs foretelling a much more disastrous future looming ahead of us.
As a result, overall economic confidence is falling in proportion with the current bearish momentum of the market, and if conditions show no signs of improving, then the possibility of further drawdowns increases. And so, to help entrepreneurs navigate current market circumstances and safeguard their long-term investments, we’ll be going over the indicators that led to today’s outcomes and the workarounds available at their disposal.
What’s Holding Back Economic Recovery?
While numerous factors can be traced back as reasons behind the current slowdown and bearish pivots of the global economic recovery, such as supply chain disruptors and fiscal policy, there is three most recent news that can be highlighted as the most impactful. Namely, (1) the extremely disappointing August jobs report released last Friday, (2) the surge in Covid-19 delta variant cases, and (3) falling consumer confidence due to the end of federal unemployment benefits.
- Extremely Disappointing August Jobs Report: Last month reported a very positive increase in the number of jobs added onto the economy, and many financial analysts forecasted that the same bullish momentum would be carried over for the August jobs report. However, the numbers came in worse than expected, with only 235,000 added, which is an extreme shortfall from the outlook of 720,000. And while average hourly earnings did report much better and also unemployment rate hitting the estimate, the impact of NFP change paints a bearish outlook for the labor market.
- Covid-19 Delta Variant Surges: Vaccination efforts have been relentless the past few months; however, the sudden surge of Covid-19 delta variant cases all throughout the country threatens the significant progress made so far. And while the vast majority of people support the movement for easing restrictions and less strict measures toward going outside, the risk associated with the delta variant challenges any practical action to do so. What’s worse, this will only magnify the already devastating pandemic slump and can bring us back to square one of transitioning to a proper new normal.
- Falling Consumer Confidence: Last but not least, overall consumer confidence drops to another month low due to the prevailing bearish market conditions, not to mention the disruptive impacts of inflation on rising consumer prices. Furthermore, with several people’s federal unemployment benefits ending within the next week, many families are scared of what comes next without the support provided.
Needs Over Wants To Secure Financial Stability
Given the circumstances mentioned above, we strongly recommend everyone to stand firm on the principle of placing needs over wants to secure long-term financial stability, especially on the off chance that more drastic market corrections happen in the weeks to come. In addition to this, we also suggest that you consider the following: (1) restructuring your current savings plan, (2) pursue any appropriate business opportunities in your locale, and (3) limit your risk in speculative investments.
- Restructure Your Current Savings Plan: Although a three-month safety cushion might seem more than enough to safeguard any expenses for whatever’s to come, we recommend that you recalculate how much you might need given the changes in market conditions. In fact, you might find it a lot more reasonable to have half a year’s worth of spending save up just in case circumstances turn for the worst.
- Highlight Business Opportunities In Your Locale: Market corrections and drawdowns are always followed by a bounceback and recovery, so while you safeguard your capital, don’t forget to highlight any business opportunity in your locale that you could pursue. And with a good eye for business, you might just find printing franchise opportunities or the chance to step into the local restaurant business once a boom follows.
- Limit Your Risk In Speculative Investments: Lastly, while many speculative investments like high-risk call options and cryptocurrency have been hitting it off, try to limit your exposure. There’s no telling what new market conditions will do to their technicals, and it puts you at direct risk of volatility. Of course, if you observe responsible stop losses, then you can consider yourself safe, but it never hurts to be even safer and risk-averse than usual.
Expect Financial Turbulence In The Coming Weeks
In conclusion, financial turbulence and economic instability are expected in the coming weeks, so safeguard yourself from any sudden crashes that could hurt your savings. Play it safe, and don’t be too optimistic with forecasts that say otherwise.