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26 12, 2023

Weekly Market Commentary – If all you wanted for Christmas was two percent inflation, you’re in luck!

2023-12-26T14:45:51-04:00December 26th, 2023|Weekly Market Commentary|

The Markets If all you wanted for Christmas was two percent inflation, you’re in luck! Barring unforeseen events, it appears the United States Federal Reserve (Fed) is on the cusp of accomplishing a feat many thought impossible – reducing inflation without causing a recession. From March 2022 to July 2023, the Fed raised the federal funds rate 5.25 percent – the most aggressive increases in decades, reported Felix Richter of Statista. There was considerable skepticism about the Fed’s ability to bring inflation down to its 2 percent target, especially as prices continued to rise, with inflation peaking at 9.1 [...]

18 12, 2023

Weekly Market Commentary – Have rates peaked?

2023-12-18T17:22:13-04:00December 18th, 2023|Weekly Market Commentary|

The Markets Have rates peaked? Last week, at its final policy meeting for 2023, the United States Federal Reserve indicated that rates may have peaked. After the meeting, Chair Jerome Powell said: “As we approach the end of the year, it is natural to look back on the progress that has been made toward our dual mandate objectives. Inflation has eased from its highs, and this has come without a significant increase in unemployment. That is very good news… “While we believe that our policy rate is likely at or near its peak for this tightening cycle, the economy [...]

11 12, 2023

Weekly Market Commentary – Still exceeding expectations.

2023-12-11T13:53:09-04:00December 11th, 2023|Weekly Market Commentary|

The Markets Still exceeding expectations. Last week, the United States Treasury market rallied. Yields fell and bond prices rose as some bond market investors enthusiastically embraced the idea that the Federal Reserve will soon change course. Michael Mackenzie and Rich Miller of Bloomberg explained: “Softening inflation and employment data in the past month have convinced investors that the Federal Reserve is done raising interest rates and ignited bets that cuts of at least 1.25 percentage points are in store over the next 12 months. Treasury yields, which touched highs of 5% as recently as October, have declined sharply, with [...]

4 12, 2023

Weekly Market Commentary – We’re cycling along.

2023-12-04T14:40:41-04:00December 4th, 2023|Weekly Market Commentary|

The Markets We’re cycling along. It’s easy to forget that economic activity tends to move in cycles. A full cycle, known as the business cycle, typically includes four stages: Contraction occurs when economic growth slows as an economy produces fewer goods and services. Economic contractions often include recessions. As productivity contracts, it can negatively affect the profitability of companies, as well as the number of jobs available and the income security of workers. The United States economy contracted during the first two quarters of 2022. Trough is the stage at which economic growth hits bottom for the cycle. It [...]

27 11, 2023

Weekly Market Commentary – In November, investors were more optimistic than consumers.

2023-11-27T17:19:12-04:00November 27th, 2023|Weekly Market Commentary|

The Markets In November, investors were more optimistic than consumers. At the start of November, investors were decidedly bearish. During the week of November 1, the AAII Investor Sentiment Survey found that about 50 percent of respondents were pessimistic about the prospects for stocks over the next six months, and about 24 percent were bullish. The current historic averages are 31 percent bearish and 37.5 percent bullish. (The remainder are neutral.) Many believe the survey is a contrarian indicator, meaning that stocks are likely to rise when investors are bearish and fall when investors are bullish. November offered some [...]

20 11, 2023

Weekly Market Commentary – Is it done? (We’re not talking about the turkey.)

2023-11-20T14:52:05-04:00November 20th, 2023|Weekly Market Commentary|

The Markets Is it done? (We’re not talking about the turkey.) Last week, investors enthusiastically embraced the idea that the Federal Reserve (Fed) could be done raising rates – and that it might even begin to lower them. As conviction about the possibility of rate cuts increased, stock and bond markets rallied, reported Koh Gui Qing and Dhara Ranasinghe of Reuters. The catalyst was easing inflation. Last week, the Consumer Price Index indicated that inflation in the United States was flat from September to October, and 3.2 percent for the preceding 12-month period. Core inflation, which excludes volatile food [...]

13 11, 2023

Weekly Market Commentary – Earnings grew in the third quarter.

2023-11-13T13:59:27-04:00November 13th, 2023|Weekly Market Commentary|

The Markets Earnings grew in the third quarter. Four times a year, during earnings season, publicly traded companies report how well they performed during the previous quarter. The strength of corporate earnings – also known as bottom-line profits – is one of the economic indicators that investors watch closely. When companies consistently grow earnings, investors feel confident they may continue to do so. Consequently, solid earnings can help lift a company’s share price. The opposite is also true. When earnings are lower than expected, investors may lose confidence in a company or look for better relative opportunities. As a [...]

6 11, 2023

Weekly Market Commentary – Will there be a year-end rally?

2023-11-06T17:00:24-04:00November 6th, 2023|Weekly Market Commentary|

The Markets Will there be a year-end rally? Last week, there was a lot of speculation about whether the United States will see a year-end stock market rally. Some say yes, and some say no. For example, at Bank of America, “Chief investment strategist Michael Hartnett broke from his usual bearish view to say technicals no longer stand in the way of a year-end rally for the S&P 500 Index. Savita Subramanian, head of U.S. equity and quantitative strategy and an optimist on stocks this year…[said] a contrarian indicator from the bank is also close to offering a buy [...]

31 10, 2023

Weekly Market Commentary – The Mark Twain Effect?

2023-10-31T10:32:10-04:00October 31st, 2023|Weekly Market Commentary|

The Markets The Mark Twain Effect? Historically, economic theory was based on the idea that financial decisions were grounded in rational thought. In recent years, behavioral economists have recognized that people don’t always behave rationally. In fact, research has found that investors like shortcuts that help simplify decision-making. While rules of thumb can be helpful, it’s important to use common sense. Some investment theories are a bit wacky, such as: The Aspirin Indicator: This theory holds that there is an inverse correlation between aspirin production and stock market performance. When aspirin production is down, markets are up (fewer headaches). [...]

24 10, 2023

Weekly Market Commentary – Stay calm and consider the big picture.

2023-10-24T09:57:41-04:00October 24th, 2023|Weekly Market Commentary|

The Markets Stay calm and consider the big picture. Today, investors have a myriad of worries that are creating tremendous uncertainty. A September Investopedia survey found investors are concerned about how their investments may be affected by: Inflation (59 percent), The upcoming election (52 percent), A possible recession, (51 percent) Higher interest rates, (51 percent) S.-China tension, (44 percent) War in Ukraine (35 percent), The United States’ credit rating downgrade (33 percent), Climate disasters (20 percent), and other issues. Now, they’re also concerned about war in the Middle East. Sometimes, in the midst of uncertainty, it can be helpful [...]

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