It’s just about time to sit down for a nice holiday dinner with friends and family. But if you work in financial services, that holiday dinner could be anything but warm and fuzzy.
Take it from someone — me — 15 years-plus into a career spanning financial analysis and business news reporting that holiday dinners are sometimes rough. First, there are the endless questions on what stock is going to go up 100%. Not over the next 10 years, try the next day. Everyone is looking for that quick pop, and they want to do little research work to find investing gems in the stock market. Moreover, any stock over $10 a share is seen as expensive — even if you try to explain to a relative that the stock price itself means nothing.
Valuation? Nah, who cares or understands that!
Then there are the inquiries into what XYZ CEO told you behind the scenes, as if you are going to share those confidential discussions. They all want the edge. And then the conversations turn to politics and who is doing a good job or a bad job and what it will mean to the markets tomorrow morning.
Exhausting. Aren’t these supposed to be the holidays? Not for us intrepid folks in the world of finance.
This year the questions are likely to hit a new gear of hysteria. The major stock indices have surged more than 25%. President Trump was just impeached by the U.S. House of Representatives. The U.S. trade war with China is over, but then it’s really not. Apple’s stock (AAPL) has skyrocketed 70% on the year. GE’s stock (GE) is on the comeback trail.
Again, serious hot button topics are teed up. Luckily Bank of America’s head U.S. economist Michelle Meyer has developed a list of 10 questions — and answers — on the economy and the markets you are likely to receive during holiday dinner.
“It’s always good to change the question to the extent that you can,” joked Meyer on Yahoo Finance’s The First Trade.
Today, we salute you Ms. Meyer for making it easier for all of us in finance to survive the dinner day discussion. The answers are short, perfectly designed to keep the conversation moving... hopefully on to sports or the weather.
Question #1: Is my job secure?
Meyer: The labor market is tight with minimal firings.
Question #2: Will my pay go up?
Meyer: Wage growth on aggregate should accelerate.
Question #3: Are rates going to stay at low levels?
Meyer: Yes, borrowing costs will be low.
Question #4: Should I buy a home?
Meyer: Housing is local but, on balance, conditions are supportive.
Question #5: Will I pay more for stuff?
Meyer: Yes, there will be inflation of about 2%.
Question #6: Why does the Fed want inflation?
Meyer: Looking to avoid deflationary spiral.
Question #7: Should I worry about the trade war?
Meyer: Yes, likely to persist in fits and starts.
Question #8: Does the election impact the economy?
Meyer: Yes, in part through uncertainty.
Question #9: Does the U.S. have a debt problem?
Meyer: The government does but households do not.
Question #10: Is a recession around the corner?
Meyer: No, the cycle looks likely to continue.