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The Markets Optimism headed south on Friday. After rising for most of the week, stock markets lost momentum last Friday as economic data raised doubts about further Federal Reserve rate cuts, reported Rita Nazareth of Bloomberg. Late in the day, President Trump announced new tariffs would be imposed this week, and stocks dropped into negative territory. Consumer Sentiment Fell Sharply Last week, the University of Michigan Consumer Sentiment Index reported that consumer confidence, which tumbled four percent in January, fell another five percent in February. “Consumer sentiment fell for the second straight month, dropping about 5 [percent] to reach [...]

The Markets Wait! What just happened? Last week, investors were inundated with market-moving data and news. Stock markets gyrated as investors tried to process everything that was occurring. Here’s some of what happened: China surprised the artificial intelligence industry The week got off to a rough start with major United States stock indices declining sharply on concerns about competition from China in the artificial intelligence (AI) space. AI-related technology stocks sold off after a Chinese start up released a less expensive AI model, raising concerns that current tech stock valuations may be too rich, reported Rita Nazareth of Bloomberg. [...]

The Markets What moves financial markets? The short answer is: Lots of things! Almost one hundred years ago, Benjamin Graham and David L. Dodd wrote, “the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.” Today, the same holds true. Stock prices are influenced by many factors. Here are three examples: Market trends. Last year, companies with strong momentum characteristics—meaning their prices were trending higher—generally did well. “The main rationale behind momentum investing is that once a trend is well-established, it is likely to continue,” reported the [...]

The Markets As the markets turn. Last week, investors breathed a sigh of relief when the latest price data showed core inflation, which excludes volatile food and energy prices, moved lower in December. Investors has been worried because economists forecasted inflation would be stickier in December, reported Frank Lee of Morningstar. If that proved out, the Fed might have stopped lowering the federal funds rate, which would have had adverse implications for company performance and stock prices. So when core inflation dropped to 3.2 percent year over year, investors celebrated. Some think the celebration might be premature. Jacob Sonenshine of [...]

The Markets Bond yields are rising—and they have investors’ attention. Last year, the United States Federal Reserve (Fed) lowered the federal funds rate by one percent. (The federal funds rate is the interest rate the Fed charges banks. It influences other interest rates.) This shift in Fed policy made a lot of people happy. Companies, business owners, and consumers cheered because Fed rate cuts typically lower borrowing costs. As a result, rates on business loans, home equity loans, auto loans and credit cards tend to move lower. Stock investors were enthusiastic because lower borrowing costs can reduce companies’ expenses [...]

The Markets Hello, 2025! As we head into a new year, it can be helpful to look back at the previous year—and 2024 was a doozy. Stocks in the United States delivered a double-double—posting double-digit gains for a second year in a row. That kind of performance is a relative rarity and has only occurred nine times over the last 96 years, according to Tony DeSpirito of BlackRock. So, how well did U.S. stocks perform? Here are annual returns for major U.S. stock indexes over the past two years—plus the return for 2022 as a reminder that stocks don’t [...]

The Markets Consumers were more optimistic. Investors were less so. As we neared the end of 2024, U.S. consumers were feeling optimistic. Every month the University of Michigan Survey of Consumers conducts about 600 interviews with American households, asking interviewees about their personal finances, business conditions, and buying conditions. In December 2024, the Index of Consumer Sentiment was up 3.1 percent month to month, and 6.2 percent year to year. Consumer sentiment rose “for the fifth consecutive month…reaching its highest value since April 2024. Buying conditions exhibited a particularly strong 32 [percent] improvement, primarily due to a surge in [...]

The Markets But that’s not what I wanted! Last week, markets were about as happy as a toddler opening a gift they didn’t like. The first upsetting event followed the Federal Reserve (Fed)’s final policy meeting for 2024. The Fed met expectations by lowering its policy rate one-quarter of a percentage point, as many economists had anticipated. The federal funds rate is now a full percentage point lower than it was at the start of September. In later remarks, Fed Chair Jerome Powell confirmed the United States economy remained strong, the jobs market remained solid, and progress had been [...]

The Markets How high can U.S. stocks fly? The U.S. stock market has delivered exceptional performance over the past few years and remains on track to deliver solid returns in 2024. “It isn’t a secret that U.S. stocks have outperformed the rest of the world. Over the past decade, the S&P 500 returned 13 [percent] a year on average,* compared with less than 5 [percent] for the MSCI EAFE [Europe, Australia, and Far East] index of developed countries. Investors can thank the health of the U.S. economy and the remarkable growth of the tech sector. The downside: U.S. stocks [...]

The Markets U.S. stocks thrive amid turmoil. The performance of the U.S. stock market is striking. Last week, the Standard & Poor’s (S&P) 500 closed at a record high for the 57th time this year, reported Rita Nazareth of Bloomberg. Here are some of the notable factors that sent stocks higher last week: Political upheaval overseas. A declaration and cancellation of martial law in South Korea and the toppling of the French government roiled financial markets overseas, making United States markets attractive. “The political chaos spanning Seoul to Paris this week is reinforcing why many investors have chosen to [...]