Stock Market Recession Talks Back-Off

January 11, 2019 5:34 am
stock market

stock market

As the new year is off and running, the stock market has been showing signs for one local economist to not be heading into a recession.

Certified Financial Planner Tim Heisterkamp with Journey Financial says there was a possibility that 2019 may be headed into a recession due to what’s called the “inverse curve,” where the short-term interest rates were going to be higher than the long-term interest rates.

“That’s since corrected itself. The interest rate curve has normalized, where the five year and the ten year are higher than the two year and that is a good thing for us. So we have a normal interest rate curve going on right now.”

As for the partial federal government shutdown that is rounding off it’s third week, Heisterkamp doesn’t believe that has had any impact on the stock market.

“I just look at and I think, ‘You know people believe what they want to believe. The government’s been shut down now for a couple of weeks now and when I look back at what the market’s done since Christmas, it’s actually been a pretty good market. In that case maybe the government shutdown hasn’t had any effect on the stock market.”

Heisterkamp still believes in historical figures that the year following a midterm election, the stock market typically sees about a 15 to 17-percent increase, due to not having political uncertainty.

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