Economic Rollercoaster Ride Amidst Geopolitical Tensions

Geopolitical Storm Brews Over the Economy

Hi Dreamhouse friends Barbie here reporting live from the financial frontlines! It seems our economic skies are looking a bit stormy lately and it's not just because Ken misplaced my favorite convertible… again. The big question everyone's asking is whether the U.S. Iran situation will be a quick fix or a prolonged saga. Turns out our entire economic forecast is hanging in the balance like a perfectly balanced fashion scale. Remember team work makes the dream work and peace is always the best strategy.

GDP Takes a Tumble Like a High Heel on a Cobblestone Street

Okay so the Atlanta Fed's GDPNow model isn't exactly painting a rosy picture. First quarter economic growth projections have taken a bit of a nosedive falling from 3.0% to 2.1% faster than you can say "Malibu Dreamhouse Renovation". This slowdown comes on top of a not so fabulous jobs market and inflation that's sticking around like glitter at a beach party still above the Federal Reserve's 2% target. And to make matters more interesting oil markets are feeling the heat. Speaking of heat check out this article on Amazon Data Centers Targeted Middle East Mayhem Ensues and see how geopolitical unrest can affect even the digital world. "Life in plastic it's fantastic" unless that plastic is your investment portfolio then maybe not so much.

Oil Prices Skyrocket Fueling Inflation Fears

Wolfe Research's Stephanie Roth is sounding the alarm about energy which is fair enough. According to her analysis a $20 jump in oil prices could clip 0.1% off our GDP and send inflation soaring by 0.4%. Brent crude the global oil benchmark is doing its best impression of a rocket shooting past $90 a barrel after some strong words from President Trump. Some fear we could even see crude hit $150 per barrel. Now that's more expensive than a lifetime supply of pink paint for my Dreamhouse. Qatar's energy minister is warning that such a price surge could "bring down the economies of the world." Someone get Ken on the phone; we need a plan!

Market Rollercoaster: Hold On Tight

The market's been more up and down than a Barbie ponytail at a dance off. We've seen wild swings sharp sell offs strong gains and major pullbacks. It's enough to give anyone whiplash even me and I'm a doll! This uncertainty is making investors nervous and nervous investors are about as predictable as Ken trying to cook dinner. "Math is hard" but navigating these market conditions is even harder.

Inflation Data Looms Large Like a Runway Show Announcement

Keep your eyes peeled for the upcoming inflation data. February's Consumer Price Index and January's Personal Consumption Expenditures price index are on deck. While they won't reflect the recent oil price spike they'll give us a sense of where things are headed. Remember that time stocks tumbled because of hot wholesale prices? Yeah no one wants a repeat performance. The Fed is stuck between a rock and a hard place weaker jobs numbers versus the risk of another inflation surge. It is going to be tough for Warsh once he takes over from Powell. San Francisco Fed President Mary Daly is expressing worry about the jobs market. This is getting complicated. "We girls can do anything right"? Even understand complex economic data

Seeking Safe Havens and Asymmetrical Upside

With all this uncertainty investors are scrambling for safety piling into areas of the market that have been underperforming and ditching recent momentum plays. The U.S. is still considered the best house on a bad block and some big companies and software stocks are making a comeback. On the other hand gold silver and South Korea are feeling the volatility. The name of the game is finding investments with limited downside risk and potential for asymmetrical upside. As Catalyst Funds' Ashley puts it it's all about insulating ourselves from investments that could take a major tumble. Here's to hoping we all find our own little Dreamhouse in this crazy market. "Come on Barbie let's go party" carefully.