We’ve certainly had an exciting few days in the markets. Yesterday, the stock market indices declined between 3 and 4%, with the Nasdaq dropping close to 4%.

The major reason for the drama was the Chinese government’s devaluation of the yuan, which they had not done in the past, along with reported difficulties in trade discussions.

There’s no way to predict the direction of the yuan over the next few days, but the U.S. dollar has strengthened significantly against other major currencies. This trend has the potential to depress domestic growth prospects and reduce GDP the remainder of this year.

If this strengthening of the dollar continues, it would not be unexpected for U.S. companies to lower revenue and profit projections going forward. This development would especially be true for any company with significant operations overseas.

In addition to trade and currency issues, the U.S. government will be trying to pass budgets for all federal agencies by the end of this fiscal year, in September. With a divided government, this will not be easy, and markets have tended to react negatively during this period, experiencing high degrees of volatility.

No one can predict the movements of the markets. By remaining focused on your goals, taking the appropriate level of risk, and investing in a diversified set of securities, you enhance the probability of achieving your goals.

If you are a client, please reach out to your advisor if you have any questions. We at Aspire remain committed to supporting you reach your goals.

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