What Will 2014 Hold?

The year 2013 may be coming to a close, but investors are already looking toward the New Year. Even more so, wondering what 2014 crowdfunding real estate will bring. While the last few months have been rife with uncertainty, the recent decision by the Federal Reserve to begin cutting monthly bond purchases may well be a strong indicator that the economy is starting to gather upward mobility. As we move into a New Year. U.S. shares have also begun to shift into record territory.

While the Dow Jones industrial average saw an increase of 62.94 points, amounting to almost 0.40 percent with a record close at 16,357.55. Meanwhile, the S&P 500 saw a gain of 5.33 points, nearing 0.30 percent to find a record of 1,833.32. An additional 6.513 points were added to the Nasdaq Composite for a record finish of 4,155.417.

Anticipations Exceeded

Much of that transition was supported by manufacturing data that proved to be stronger than anticipated. In turn, U.S. Treasury yields made the leap to 2-½ year record highs. When placed into a cumulative total, it would certainly seem as though belief is running high that the economy is on a course for what could be sustained recovery.

Further positive economy data influenced gains for the U.S. dollar against several trading partners, including Japan and the euro zone. Sales of existing homes did fall for the third consecutive month in November to reach an annual rate of 4.9 million. The decline in November was the largest in more than 2-½ years. In other housing news; however, October sales reflected the highest levels since July of 2008.

Personal Finances in 2013

Personal income was up slightly less than anticipated for the month of November. At an increase of 0.2% followed by a decline of 0.1% during the preceding month. At the same time, personal spending saw an increase of 0.5% during November. This increased represented the seventh consecutive monthly increase in personal spending. In the jobs market, the number of initial jobless claims rose, with another 10,000 claims added to the previous week’s leap to 64,000. We believe that this increase is likely due to continued seasonal adjustments.

Uncertainty Dissipates

Overall, uncertainty regarding both legislative and fiscal policies has begun to decline. In the past, increased levels of uncertainty have proven to weigh heavily on gains in the stock market. As result, it is our conclusion that U.S. equities should prove to be positive over the course of the next few months. It would certainly seem that investors have staked their positions for the coming year.

Like most other investors, we have been keeping a close eye on interest rate movements. With the Fed including, for the first time, a specific lower boundary for inflation under which rates will not be raised, we expect that 10-year yields will likely remain within range and will certainly be less volatile.