The tech sector continues to inspire confidence while automation technology could threaten conventional jobs. Read more in this week’s Steady Investor’s Week…
Are Robots Coming to Take Your Job? – Eric Schmidt, the Executive Chairman of Google, doesn’t think so. In a recent interview and in response to a research report issued by the McKinsey Institute regarding automation, Schmidt said he thinks there will be more jobs as a result of advancing technology and automation, not less. We tend to agree. Throughout history, the rapid onset of automation technology has – many times unpredictably – led to the creation of new jobs and even new industries. A basic example is the ATM machine. When ATMs hit the market, many feared that would be the end of the bank teller, a then very sought-after position. And while there are certainly less bank tellers today as a result, there are more bank employees working in higher margin businesses for the banks, i.e., writing mortgages, managing investments and retirement, issuing credit cards, and so forth. The need for service employees increased as a result of automation, not to mention the jobs created for building, maintenance, and new technology for the machines.
A Tale of Two Brexits – Brexit negotiations finally got underway this week, in what is almost certain to be a long, windy, and tense divorce proceeding. There appear so far to be two voices amongst those leading negotiations in Britain. On one hand, U.K. Brexit Secretary David Davis is taking a softer line to negotiations, emphasizing the shared values of Europeans and Brits and striking an optimistic tone that the two parties will strike a deal “like no other in history.” On the other hand, head of the U.K. Treasury Philip Hammond appears to be playing the ‘bad cop’ in negotiations, taking a more hardliner approach in talks, indicating early that Britain is holding ground on not paying the estimated 60 billion euro exit bill and will leave the single market. He also indicated Britain’s intent to leave the customs union. The two-year divorce process is due to end by March 2019.
Tech Remains on a Tear – technology stocks have been topsy-turvy of late, with some pronounced selling last week followed by the best day of the year for the NASDAQ this week. Strong earnings and dominant positions, like Amazon’s takeover of Whole Foods, inspire confidence that the future belongs to the technology sector. We have written quite a bit on technology’s surge, which we think has room to continue. We would urge investors however to watch valuations and be selective. This is not 1999, in our view, but the tech sector also isn’t exactly a place to find deals in this market.
Crude Oil Bear Market? – we’ve said for some time now that oil should settle around the $40-$50 range, and that’s where it appears to want to stay. Some additional selling this week had crude oil settling around $43 per barrel, which marks a nine-month low. The recent decline in crude oil prices has put it back into bear market territory, which is not actually an unusual metric for crude oil (historically volatile). In spite of production cut promises coming from OPEC, the production of shale gas continues to put pressure on the supply and demand equation for crude oil.
As this week comes to a close with the Brexit facing a two-year divorce and constant changes surrounding tech, news stories leave us with more unanswered questions than answered ones. With that, it can be very time-consuming for investors to keep up with shorter-term trends, news and events that could impact their investments. To help give you a leg up, we’ve laid them out for you in our newly released Zacks’ Stock Market Outlook report. This exclusive Report is a quick read but contains predictions that can help you assess your portfolio. Learn more by clicking on the link below. And if you are looking for help managing your investments, talk with one of our Investment advisors today at no cost to you. Call us at 1-888-600-2783.