It’s difficult predicting anything in this mile-a-minute, digitized world we live in, but Infinity Financial Services in Oakland has put its collective heads together, analyzed countless financial trends, and developed several predictions for the financial industry in 2018 that we feel comfortable providing to you, the reader.
The S&P 500 Will Cross 2,900
Stocks have posted gains for eight straight years (2010 - 2017), key indices have broken numerous records, and we’re clearly residing in what has become a bull market for the ages. In December the S&P 500 was up 19.5% year-to-date (YTD), an all-time high, and it more than doubled its historical annual average.
Bond prices and interest rates are low, corporate earnings are strong, and the Tax Cuts and Jobs Act could considerably boost bottom lines in the corporate world, especially with certain restrictive regulations being rolled back.
Consumer Credit Scores Will Peak
In 2017, the average consumer credit score increased 10 points, from 669 to 679. Our financial services company in Oakland foresees continued growth in 2018. Consistent economic growth and low unemployment, two main influencers on credit scores, are trending nicely, and negative credit records generated during the Great Recession are disappearing from a growing number of consumers’ credit reports.
Despite Higher Rates, Home Sales Will Top 5M
90% of mortgages have a 30-year term and fixed rates, and the average APR on a 30-year fixed mortgage has decreased over the last two years. Also, the majority of mortgages don’t feel the direct effect of Federal Reserve rate hikes, which is not the case with credit cards. Even though existing home sales were around 9% lower than in 2016, that year still saw around 5 ½ million homes sold, with a strong finish in November and December. Therefore we feel comfortable setting a 5M threshold, especially with burgeoning home sales in markets that are just starting to recover from the 2008/09 crash.
For the Fourth Consecutive Year, American Auto Sales Will Exceed 17M
The post-recession car-buying boom that many people thought would end has done anything but, fueled in large part by technological advancements, especially those related to semi-autonomous and autonomous systems. One unfortunate contributor to strong car sales has been the large number of natural disasters that have forced car owners to scrap their damaged vehicles and buy new. But on a brighter note, landmark vehicles like the 2019 Audi A9 should generate huge interest in the next generation of intelligent automobiles.
Unemployment Will Hover Around 4%
In November 2017, America’s unemployment rate was 4.1% - the lowest it’s been since 2000. Many economists and investment banks, as well as the Federal Reserve itself, are projecting a 3.9% unemployment rate for 2018, with some very optimistic folks believing the rate could drop as low as 3.5%, a number the country hasn’t seen since 1969. We’ll err on the safe side and say the unemployment rate will hover around 4%, with many businesses hiring new staff this year.
If you’re ready to begin your 2018 financial planning in Oakland, the experienced professionals at Infinity Financial Services are the ones to call.