Weekly Market Commentary

8 08, 2022

Weekly Market Commentary – The strength of the United States economy continues to surprise.

2022-08-08T14:27:11-04:00August 8th, 2022|Weekly Market Commentary|

The Markets The strength of the United States economy continues to surprise. If you have ever been camping, you may have banked your campfire by covering the hot coals with ash. It’s a process that keeps the coals burning low so the fire can be easily rekindled. The U.S. Federal Reserve has been trying to bank the fire of U.S. economic growth – and it’s proving to be challenging. There are signs that U.S. economic activity is burning less brightly. For example, economic growth declined during the last two quarters, the U.S. housing market appears to be cooling, and [...]

1 08, 2022

Weekly Market Commentary – Investors thought they heard a dovish note from the Federal Reserve and markets rallied.

2022-08-01T13:57:47-04:00August 1st, 2022|Weekly Market Commentary|

The Markets Investors thought they heard a dovish note from the Federal Reserve and markets rallied. Last week, we learned from the Bureau of Economic Analysis (BEA) that economic growth in the United States slowed for the second consecutive quarter. Economic growth is measured by gross domestic product, or GDP, which is the value of all goods and services produced during a specific period. GDP includes household, business and government spending, as well as exports and imports. Before inflation, the U.S. economy grew by 6.6 percent in the first quarter of 2022 and by 7.9 percent in the second [...]

25 07, 2022

Weekly Market Commentary – A lot of people are worried that a recession may be in our future. Some think it may already be here.

2022-07-25T13:03:35-04:00July 25th, 2022|Weekly Market Commentary|

The Markets A lot of people are worried that a recession may be in our future. Some think it may already be here. Unemployment is low (3.6 percent), and inflation is high (9.1 percent). Both tend to occur when an economy is experiencing strong growth. That makes it difficult to believe the United States is in a recession, but some data is pointing that way. Last week, the Atlanta Federal Reserve’s GDPNow estimated that economic growth in the United States was -1.6 percent for the second quarter of 2022, after adjusting for inflation. They measured economic growth using gross [...]

18 07, 2022

Weekly Market Commentary – Nobody is happy, but Americans are feeling more optimistic.

2022-07-18T17:20:49-04:00July 18th, 2022|Weekly Market Commentary|

The Markets Nobody is happy, but Americans are feeling more optimistic. Last week, headlines blasted the new inflation numbers. Prices were up more than 9% year-over-year in June, according to the Bureau of Labor Statistic’s Consumer Price Index (CPI). When you dig into the numbers, energy prices were up 41.6 percent year-over-year and food prices were up 10.4 percent. “Prices are rising just about everywhere in the world, in part a consequence of Russia's invasion of Ukraine, which has elevated energy and food prices, and in part because of the supply chain bottlenecks that have driven U.S. prices up,” [...]

11 07, 2022

Weekly Market Commentary – Rising inflation is a bit like a child throwing a temper tantrum in the grocery store.

2022-07-11T12:47:40-04:00July 11th, 2022|Weekly Market Commentary|

The Markets Rising inflation is a bit like a child throwing a temper tantrum in the grocery store. The red-faced parent, in this case the U.S. Federal Reserve (Fed), tries to calm the child. Sometimes, it works and the child calms down (soft landing). Other times, the child won’t settle, and the parent takes more extreme action, like leaving and coming back for groceries later (recession). The Fed is laser focused on calming inflation. At a June press conference, Fed Chair Jerome Powell said, “We have both the tools we need and the resolve that it will take to [...]

5 07, 2022

Weekly Market Commentary – The first six months of 2022 have earned a place in history books.

2022-07-05T12:53:10-04:00July 5th, 2022|Weekly Market Commentary|

The MarketsThe first six months of 2022 have earned a place in history books.2022 is likely to become part of the lore passed from generation to generation. Stories will be told about this bear market, as well as the remarkable political and social events that have occurred in the United States and elsewhere. Here is a brief look back at the last three months.Will the real inflation please stand up? Prices continued to rise during the second quarter, although there was a significant difference in inflation readings. The Consumer Price Index (CPI), which reflects price changes in cities, showed inflation [...]

27 06, 2022

Weekly Market Commentary – Last week, bad news was good news.

2022-06-27T21:09:58-04:00June 27th, 2022|Weekly Market Commentary|

The Markets Last week, bad news was good news. Consumers were feeling blue in June, according to the University of Michigan Consumer Sentiment Survey. The survey scored sentiment at 50, which was the lowest level on record. Surveys of Consumers Director Joanne Hsu reported that 79 percent of consumers anticipate business conditions will decline during the next 12 months, and almost half indicated they are spending less because of inflation. Consumer pessimism was reflected in the S&P Global Flash US Composite PMI™. The Index measured that manufacturing growth was at the lowest level in almost two years. “Declines in production [...]

21 06, 2022

Weekly Market Commentary – The fight against inflation intensified.

2022-06-21T13:56:01-04:00June 21st, 2022|Weekly Market Commentary|

The Markets The fight against inflation intensified. Last week, the Federal Reserve (Fed) delivered a message that it is serious about fighting inflation. The Federal Open Market Committee (FOMC) lifted the federal funds target rate by 0.75 percentage points. The fed funds rate is now 1.50 percent to 1.75 percent. The Fed also has begun to shrink its $9 trillion balance sheet by selling Treasury securities and agency mortgage-backed securities, a process known as quantitative tightening (QT), reported Kate Duguid, Colby Smith, and Tommy Stubbington of Financial Times (FT). The Fed’s balance sheet expanded greatly during the past few years [...]

13 06, 2022

Weekly Market Commentary – Inflation is proving to be far more tenacious than markets had hoped.

2022-06-13T17:03:00-04:00June 13th, 2022|Weekly Market Commentary|

The Markets Inflation is proving to be far more tenacious than markets had hoped. The idea that inflation peaked in March was put to rest last week when the Consumer Price Index (CPI) showed that inflation accelerated in May. Overall, prices were up 8.6 percent last month, an increase from April’s 8.3 percent. It was the highest inflation reading we’ve seen since December 1981. The most significant price increases were in energy (+34.6%) and food (+10.1%). That’s unfortunate because the War in Ukraine has a significant influence on food and energy prices right now, and no one knows how [...]

6 06, 2022

Weekly Market Commentary – How strong is the United States economy?

2022-06-06T14:27:07-04:00June 6th, 2022|Weekly Market Commentary|

The Markets How strong is the United States economy? That’s the question investors were mulling after last week’s jobs report. More jobs were created in May than economists expected, and the labor force participation rate rose, meaning even more people are returning to work. Overall, the unemployment rate remained at 3.6 percent. However, unemployment rates varied by age, sex and race: Adult men: 4 percent Adult women: 4 percent Asian: 4 percent Black: 2 percent Hispanic: 3 percent White: 2 percent Teenagers: 4 percent From an inflation perspective, there was some good news in the employment report as earnings [...]

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