Inflation is a topic that is on the radar of some because the rate is struggling to increase. Not only that, but the government needs to unwind their bond buying program, which will take a good amount of time. There is a variety of topics on the plate for the Fed, but if all continues as is, we should be seeing a rate increase in December.
If the rate does increase, you can expect loans to cost more and returns on products such as CD’s and bonds increase. There is a sweet spot and once we find it, it will allow for other aspects of the market to grow. Keep an eye to on the European Union as well because they have lagged behind in recovery.
Walmart
With the latest news of Toys R Us filing for bankruptcy, this could open the door for other retailers and Walmart is certainly one of them. Toys R Us did say they are going to try and keep open some stores, turning them into a whole different experience. They have not said what stores they are closing, but this is going to allow Walmart to gain some market share in the toy space.
Walmart has had some tough competition with Amazon making toy shopping a breeze. Not only that, the company has beefed up their online presence and this could be occurring at just the right time. If Toys R Us plans to get back on their feet, they will have to grow their online sales and update their stores to be an extremely welcoming environment.
Wells Fargo’s Credit Downgrade
We are all too familiar with big banking doing unethical transactions and Wells Fargo is that face right now. With their recent crime of opening accounts using existing customers data, they have been tackling a public relations nightmare. Now, their credit has been lowered and that will certainly have an impact on the company going forward.
The company is still in investment grade territory, but this will still be taken into account from an ethics standpoint. Common sense says you wouldn’t lend to someone who is going to take that money to do something unethical with it, and it is that same thinking that will be discussed from creditors now. Of course they are still going to get money but they may have to pay a higher interest rate as a consequence for their actions.
Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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