Market Update

December 2023 - Market Update In their final meeting of 2023, the Federal Reserve signaled a dovish pivot by updating their interest rate projections, indicating multiple rate cuts for both next year and 2025.1 The updated forecast suggests a lower path for the federal funds rate, with the Federal Reserve expecting multiple rate cuts in 2024, 2025, and 2026.1 During the press conference, Federal Reserve Chair Jerome Powell acknowledged potential discussions about rate cuts, leading to a market-friendly tone. The market reacted as if the Fed had eased policy, with the S&P 500 gaining nearly 1.4% and [...]

October 2023 - Market Update September proved challenging for global stocks and bonds... It marked the worst month for stocks in a year, with the S&P 500 down 5%, and the weakest performance for bonds since February. This was spurred by news that the Federal Reserve plans to keep monetary conditions tight for an extended period.1 In the first week of October, yields on 30-year US Treasuries reached 4.97%, the highest since 2010, while 10-year Treasuries hit 4.80%, the highest since 2007.x Unfortunately, September inflation did not subside as the Consumer Price Index (CPI) showed prices rose 0.4% [...]

September 2023 - Market Update Despite recent optimism about declining inflation... The Consumer Price Index (CPI) recorded its largest monthly increase this year, up 0.6% in August.1 On an annual basis, prices rose 3.7%, compared to 3.2% in July.1 Core inflation, which excludes more volatile food and energy prices, rose 0.3% in August, marking the first acceleration in six months.1 Since February, year-over-year core inflation has consistently outpaced headline inflation, however, the silver lining is that core inflation continues to improve by falling to 4.3% in August, from 4.7% in July.1 Transportation-related items replaced shelter as the [...]

July 2023 - Market Update Stocks surged in the first half of the year driven by mega cap technology, or technology-adjacent, stocks. These top stocks have been dubbed the “Magnificent 7” by the media and include Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla. Together, those firms contributed nearly three-fourths of the S&P 500’s gains1. While headlines are telling the story of artificial intelligence fueling the surge of tech stocks, there are two additional storylines to consider. First, most of the “Magnificent 7” had a rough 2022. As fears of rapidly rising interest rates have subsided, technology [...]

June 2023 - Market Update Year-over-year inflation has improved in each of the last 11 months.While prices are still increasing faster than the Fed is comfortable with, as headline prices rose 4.0% over the last year through May, the rate of those increases continues to come down1. Core inflation, which excludes the volatile food and energy components, rose by 5.3%, marking the slowest rate since December 2021. Although the significant improvement in headline inflation provides some flexibility for the Federal Reserve, stubborn core inflation may significantly push out any easing the Fed may have been previously debating. While [...]

April 2023 - Market Update Consumers are the largest and most important part of the US economy, and their ability to drive it has been critical over the last year or so.Sentiment data has shown pessimistic views of the economy, but the tight jobs market has been a key point of the consumers’ resilience in the face of continuously rising prices. While jobs have continually grown over the last two years, the pace of growth has been slowly cooling. In March, over a quarter million new jobs were added to the economy1, though job openings fell below 10 [...]

March 2023 - Market Update Silicon Valley Bank (SVB) collapsed over a five-day period starting on March 8, 2023. The events were triggered by a run on the bank after it announced that it had sold securities at a loss and needed to raise $2.25 billion to plug the hole in its finances. SVB's bond portfolio, heavily invested in US government bonds during the era of near-zero interest rates, suffered when the Federal Reserve hiked interest rates aggressively to tame inflation. Rising borrowing costs for tech startups, which make up a majority of SVB’s depositors, forced them [...]

November 2022 - Market Update Recent positive economic developments include third quarter GDP rising at a 2.6% annualized rate.1 Also, inflation is showing some signs of slowing, with the yearly change in the Consumer Price index falling from 8.2% to 7.72%. The GDP report essentially puts to bed the discussion of currently being in a recession, though risks remain for next year as the impact of the Fed’s actions can take a while to ripple through the economy. Within October’s inflation report, goods prices fell by 0.4% over the month, while services prices continued to rise.2 The [...]

October 2022 - Market Update Another hot inflation report from September shows the Fed has a long road ahead to get inflation under control. The Consumer Price Index rose 0.4% for the month and 8.2% over the prior year1. While the annual increase is slightly slower than the 8.3% in August, there weren’t many silver linings in the report. Core inflation, which excludes food and energy, has grown 6.6% over the past year, the most since the early 1980s. The fact that inflation isn’t slowing down makes it increasingly likely the Federal Reserve will hike 75 basis [...]

September 2022 - Market Update August’s inflation surprised economists and the markets, and not the good kind of surprise. Lower gas prices helped somewhat, but the overall Consumer Price Index rose 0.1% over the month and 8.3% over the year1. A Bloomberg survey showed economists had expected prices to fall 0.1% and the direction of the surprise sent markets tumbling, with the S&P 500 falling over 4% the day the report was released. Lower gas prices were just about the only glimmer of good news since prices rose on most other major items and core prices, which [...]

July 2022 - Market Update Inflation ticked up once again in June, with the Consumer Price Index increasing 9.1% from the year prior, up from May’s 8.6% increase.1 Price increases were spread broadly across the economy, though surging energy prices accounted for almost half of the overall increase. Pain at the pump in June drove headlines with gasoline up 59.9% and overall energy up 41.6% over the year. If there is any silver lining, core inflation, which excludes food and energy, slowed for the third month, rising “only” 5.9% over the year, down from 6.0% in May [...]

March 2022 - Market Update Inflation has yet to show signs of slowing as February’s Consumer Price Index notched another multi-decade high with prices increasing 7.9% over the last year and 0.8% since January.1 Largely due to ongoing supply chain issues, energy was a massive contributor to the increases - and that was before the oil and gas prices shot up in early March! Housing also continues to be a large contributor. In response to the inflation data, the Federal Reserve held its policy meeting last week and as expected, lifted short-term rates by 0.25%. The next [...]