The Markets

Markets were tuned to the signals coming from Jackson Hole, Wyoming.

During World War II, United States armed forces often relied on high-powered radio sets to communicate. When determining whether transmissions were garbled by static or obscured by the sounds of battle, the sender would ask, “Do you read me?” If communications were easily understood, the answer was, “Loud and clear.”

Last week, markets heard U.S. Federal Reserve Chair Jerome Powell loud and clear. He spoke at the Federal Reserve (Fed)’s policy forum in Jackson Hole, Wyoming, and said:

“The U.S. economy is clearly slowing from the historically high growth rates of 2021, which reflected the reopening of the economy following the pandemic recession. While the latest economic data have been mixed, in my view our economy continues to show strong underlying momentum. The labor market is particularly strong, but it is clearly out of balance, with demand for workers substantially exceeding the supply of available workers. Inflation is running well above 2 percent, and high inflation has continued to spread through the economy. While the lower inflation readings for July are welcome, a single month’s improvement falls far short of what the Committee will need to see before we are confident that inflation is moving down. We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2 percent.”

It wasn’t the speech stock market bulls had hoped to hear. They were anticipating the Fed would take a doveish policy turn, and would soon begin to raise rates less aggressively, according to sources cited by Lu Wang and Elaine Chen of Bloomberg.

Following Chair Powell’s remarks, major U.S. stock indices headed south.

“The Dow Jones Industrial Average declined 3% on Friday…while the S&P 500 index fell 3.4%…the tech-heavy Nasdaq Composite took the brunt of the damage, falling 3.9% on Friday to end the week down 4.4%. That makes sense, given that expensive growth stocks are most sensitive to rising interest rates,” reported Ben Levisohn of Barron’s.

Data as of 8/26/221-WeekY-T-D1-Year3-Year5-Year10-Year
Standard & Poor’s 500 Index-4.0%-14.9%-9.2%12.1%10.7%11.2%
Dow Jones Global ex-U.S. Index-1.1-18.6-19.42.1-0.22.4
10-year Treasury Note (yield only)3.0N/A1.
Gold (per ounce)0.0-3.8-
Bloomberg Commodity Index1.925.631.217.78.4-1.6

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch;; U.S. Treasury; London Bullion Market Association. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.


You may never have heard of him, but Joss Naylor might be one of the greatest endurance athletes of all time. He’s a sheep farmer and a fell runner whose nickname is the Bionic Shepherd. “Fell” is British for hill or mountain. At the age of 50, he climbed 214 peaks, covering 520 miles of mountainous terrain, in seven days, one hour and 25 minutes.

Mildred Ella “Babe” Didrikson Zaharias was one of the first female athletes to gain recognition. Babe won accolades in golf, where she won 10 LPGA championships; basketball, where she led the Amateur Athletic Union Golden Cyclones to a championship; and track and field, where she earned two gold medals in the 1932 Summer Olympics. She also pitched four innings during three Major League spring training exhibition games in the 1930s.Last week, you may have heard about a relatively unknown economic statistic that rarely receives recognition. It’s called Gross Domestic Income or GDI. Analysts and economists have been wondering why GDI is outperforming Gross Domestic Product, or GDP, which is a better-known economic indicator.
In theory, the performance of GDP and GDI should be about the same, according to Reade Pickert of Bloomberg, which may explain why GDI is often overlooked. Recently, however, the performance gap between the two has been significant.

  • GDP measures the total value of all of the goods and services produced by the economy. Last week, the Bureau of Economic Analysis (BEA) reported that, after inflation, GDP declined 0.6 percent annualized from April to June, after declining 1.9 percent from January to March.
  • GDI measures the total value of all of the income generated from producing goods and services. It includes compensation and company profits. After inflation, GDI was up 1.4 percent annualized from April to June, after rising 1.8 percent from January to March.

“GDP figures suggest an abrupt slowdown in economic momentum in the first half of the year…The back-to-back negative quarters, a common rule of thumb for recessions, have not only fueled fears of an imminent downturn but also led some to believe it was already under way…GDI, however, points to a more gradual cooling. It paints a picture of an economy supported by a robust labor market and resilient consumer spending, though one that’s starting to feel the pinch of the worst inflation in a generation,” reported Bloomberg.

The BEA will take another look and offer final revisions to GDP and GDI in September.

Weekly Focus – Think About It

“The way to catch a knuckleball is to wait until it stops rolling and then pick it up.”

—Bob Uecker, baseball player and broadcast announcer

Your Team at Wellspring Wealth

David GloverMark WinstonDennis WrightAndrew WrightValeri BishopDan O’Rourke