Market Brief – New rules in this economy

Expectations about the financial landscape are shifting beneath our feet in this economy. With talk of higher-for-longer interest rates and now possibly stagflation, it’s clear that the old playbook might not cut it anymore.

But here’s the silver lining: changes in this economy present an opportunity to work together to adapt and thrive. Ensuring you can manage your day-to-day expenses, without compromising the life you envision for your future. Helping you understand and adjust to these “new rules” is what I’m here for. As we all know, it’s not always just about tightening the belt. It’s about smart strategies that balance current needs with future goals, making your money work harder for you in the current environment.

Together, we can navigate changing expectations, identifying opportunities to optimize where we can, prioritize, and invest in your future. All while maintaining the lifestyle you value – like a nice dinner out, if that’s what you like. Let’s talk about any ideas or life changes that may affect your finances.

Market Brief – This Economy

Inflation appears stalled, but at a low level near the Fed’s 2% target. The headline signal of a cooling economy, 1Q24 GDP growth, may not be so true, as other economic data has been strong. As April finished and turned to May, investors appeared ready to get back into the stock market, driven by a familiar driver: earnings reports. For companies that have reported to date, just over 80% have exceeded expectations. This is better than the five-year trend of 77% and the 10-year trend of 74%.

new economy

One feature of the current environment is the cycle composed of the housing industry, interest and mortgage rates, rents, and Fed policy. Activity in the housing market is below prior year and prior two-year levels due to higher prices and higher mortgage rates. To get housing moving again, rates have to come down. To lower rates, the Fed has to be confident inflation is in fact declining so it can lower the fed funds rate.

Currently, inflation has stalled. The biggest culprit is shelter, one-third of consumer inflation, which in the March CPI was up 5.7% annually. Rents are high and rising because few people can afford to buy homes at current price/mortgage levels. These people are now competing for the low supply of rental units. Both the supply-demand imbalance and higher home prices are pushing landlords to keep raising rents at three-times the underlying level of all other inflation. That in turn keeps overall inflation too elevated for the Fed to lower rates.

A frustrated Fed is now contemplating two or fewer rate cuts in the second half of 2024. This is down from projecting three or more cuts just a few months ago. As long as inflation remains above the Fed’s comfort zone, we expect volatility to continue in the stock market. Regardless of changes in this economy, reach out to discuss whatever financial concerns you may have at this time.

Independent, fee-only, fiduciary standard | Erie CO Financial Advisor serving greater Denver/Boulder | Investment Management, Retirement Planning, Wealth Management 

Click here if you would like to learn more about your options. And if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers. This is not a solicitation or offer of service in states we are not licensed in.

New Year, New Rates? Market Brief February 28 2024

Given the choice between more time or more money, which would you pick? This question is not just a thought experiment but a reflection of the trade-offs we make daily in our pursuit of happiness and success. How you answer can significantly impact your saving, spending, and goal setting.

Research shows that our sense of happiness and fulfillment is directly linked to how we spend our time and money. When we prioritize time over money, we may find more joy and satisfaction in our lives but may have less financial security. On the other hand, prioritizing money may leave us feeling unfulfilled and stressed.

new year new rates

Since 2024 is a leap year, you’ll have an additional day. Why not spend some time on that day considering one practical action to optimize your resources?

Onward to rates… Interest rates affect us all. Whether you’re seeking the highest rate for your savings or the lowest for your mortgage or credit cards, knowing how to manage this aspect of your finances is increasingly important in an ever-changing environment.

Though most forecasters expect the Fed to cut a benchmark short-term interest rate soon, rumors of “higher for longer” rates persist. And although we can’t predict the future, we can prepare for it. Are you ready for when this change happens?

Understanding key financial concepts is important to maintaining not just your financial health but also your financial confidence and happiness. And interest rates are more than just numbers in the news; they’re the heartbeat of your financial wellness. More on the current interest rate environment in the Market Brief below.

Feel free to share if you know someone who could use guidance. As always, I’m available for any questions or ideas you have regarding financial strategy.

Market Brief – New Year New Rates

Another week is behind us in 2024, while stocks have seen more recovery highs and the major indices have seen more all-time highs. The week ending Feb 23 saw the S&P 500 rise 1.7%, the Nasdaq added 1.4%, and the Russell 2000 lost 0.9%. For the S&P 500 and Nasdaq indices, last week was the 15th of 17 on the upside. During the 17 weeks, the S&P has gained 23.6%, and Nasdaq is up over 26%. Those are great returns for a full year!

In other news, Amazon.com replaced Walgreens Boots Alliance in the 30-stock Dow. New home sales in January 2024 rose 1.5% from December to a seasonally adjusted annual rate of 661,000 units. The median sales price was $420,700 and the average sales price was $534,300.

As for a recession, it is likely that the U.S. economy will avoid one into 2025. The Federal Reserve will likely start to lower interest rates later this year, and earnings growth is poised to accelerate over the next few quarters. There are fundamental risks to be sure, such as geopolitical developments (Russia, Mideast, China), high interest rates (the Fed hasn’t cut yet), the chance of recession (always a possibility), not to mention the upcoming 2024 U.S. presidential election.

The Fed’s next rate decisions come at the end of March and May. For March, odds of a rate cut are only about 4%, according to the CME Fed Watch. For May, odds go up to 26%. That’s also much lower than was the case over in last few weeks. Year-to-date the S&P is up 6.8%, Nasdaq up 7.9%, and Dow up 2.9% through intraday today.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers. This is not a solicitation or offer of service in states we are not licensed in.

Financial Advisor Erie CO focus on investment and wealth management, retirement planning; Boulder, Louisville, Niwot, Lafayette, Windsor, Berthoud, CO

Markets reach All-time Highs

all-time highs

Happy New Year, happy January, and welcome back to All-time highs! As we embark on this fresh chapter, consider this, it has been two years since we last reached this threshold. A lot has happened since then. In some areas of life, value is unlocked by starting, while in others, it’s found in the finish. What’s your focus for 2024 and beyond? Whether you need to kickstart new financial habits or follow through on existing plans, I’m here to help you navigate the journey.

Financial success often hinges on effective beginnings and successful completions. Starting on the right foot positions us for a year of financial achievements. This year let’s work together to initiate valuable habits like automatic savings, strategic budgeting, and a tailored financial strategy aligned with your long-term goals. If there’s anything left unfinished from 2023 – unsure what changes to make, coverage to put in place, accounts to contribute to, when to save, etc. – let’s tackle it head-on for a more financially fulfilling year ahead. Even minor adjustments to your financial strategy today can make a big difference over time.

The second Friday of every January is infamously known as “Quitter’s Day.” It’s the day on the calendar by which most people have already abandoned their freshly made resolutions. Hopefully you powered through and are still on track with your 2024 goals. Truthfully, it’s not hard to believe. As we’ve all experienced at one time or another, it’s easy to get discouraged with our goals, especially after the initial enthusiasm starts to fade. The secret to staying power is breaking down your long-term goals into smaller, more manageable milestones. What can you do today that will improve your situation by December?

As always, if you have questions any day of the year, reach out to me. Together, we can create an action plan tailored specifically to you. As the saying goes, winners are not people who never fail, they are people who never quit. Here’s to unlocking value and achieving financial success in 2024!

Market Brief – All-time Highs

This is a huge earnings week, with many big-name companies reporting. The week also features important inflation data, and talk about the Fed’s next rate move will heat up ahead of the rate meeting next week. The FOMC decision on January 31 is widely expected to result in unchanged interest rates, while future rate-cut expectations have become less optimistic. Last week, the Dow Jones Industrial Average was higher by 1%, the S&P 500 up 1.2%, and the Nasdaq up 1.6%.

Mortgage rates dropped slightly last week, to 6.6% for the average 30-year fixed-rate mortgage. Gas prices fell a penny to $3.06 per gallon for the average price of regular gas. The Atlanta Fed GDP indicator is forecasting for 4Q and calls for expansion of 2.4%.

Stocks headed higher today with the S&P 500 on track to hit another all-time high. The stock market blasted off late last week, propelling the S&P 500 to an all-time high. It has been a long recovery (over two years) for the index, as its last All-time high was on January 3, 2022. The Nasdaq still has work to do to reach their all-time high from late 2021 and early 2022. Year-to-date, the DJIA is now up 1%, the S&P is up 1%, and the Nasdaq is up 1.6%.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers. This is not a solicitation or offer of service in states we are not licensed in.

Erie CO Financial Advisor; investments, wealth management, retirement income planning; Boulder, Broomfield, Louisville, Niwot, Windsor, Berthoud CO

#investing #marketbrief #stockmarket #retirement #wealthmanagement #financialadvisor #retirementplanning #investmentmanagement #retirementincomepla

Best Way to Spread, or Keep, Holiday Cheer

‘Tis the season! And with it comes the age-old quandary: what do we give our loved ones? While traditional gifts such as toys and games, gift cards, and vacations are popular choices, consider giving a financial-related present. It could be the best gift of all, one that keeps on giving long after the holiday is over.

Financial gifts have the power to positively impact the recipient’s future. For younger people, contributing to a college fund or opening a savings account in their name can help set them up for success. For seniors, gifting shares of stock or a contribution to retirement savings can make the golden years even more enjoyable. Now is an opportune time to make your tax-deductible charitable donations as well.

Let’s discuss the possibilities, which can be tailored to suit each person’s age and needs. Whether it’s teaching kids about the importance of saving or helping adults invest in their future, these gifts can make a lasting difference. Who knows, you may just find the perfect gift that makes you unforgettable in someone else’s eyes.

And what about you this holiday season? We all love a good secret, one that positively impacts others. And this time of year is chock full of them. Whether it’s wondering who’s on Santa’s nice list, to choosing the perfect gift for a loved one and brimming with anticipation while you wait to see their face light up as they open it. The element of surprise brings such joy during the holidays.

Now there’s research that backs up the secret sentiment. In the New York Times article “The Quiet Thrill of Keeping a Secret,” researchers found keeping positive secrets to yourself has an energizing effect. Similarly, the same can be said for the anticipation you can feel striving for your longer-term financial goals. Think about it: envisioning your dreams – like a secure retirement, destination vacation, or new car or home – and taking definitive steps to turn your dreams into reality ignites the same sense of excitement, just for longer.

So, this holiday season, reflect not only on the short-term secrets that will soon end, but on your long-term aspirations as well. Build up and savor that excitement. Remember, if you’d like assistance navigating these topics or help otherwise managing your finances, don’t keep that a secret – let’s talk!

Market Brief: Fed on Tap

On tap this week is the Fed’s rate decision, some key inflation data, and retail sales figures for November (including Black Friday results). As well, discount giant Costco reports earnings for last quarter. On the economic calendar, the Fed has its two-day meeting with an interest-rate decision coming on Wednesday. No change is expected and, as usual, analysts will be focused on Chairman Powell’s comments following the rate decision.

On the earnings calendar, a few final key companies will report. Monday, Oracle weighs in, on Wednesday, Adobe and on Thursday, Jabil, Lennar Corp, and Costco. As of last Friday, 497 of the S&P 500 companies have reported. So far, earnings are 7.2% above the same quarter last year – which is better than expected.

Last week, the November jobs report got a lot of attention when it came out on Friday. It showed Nonfarm Payrolls increasing by 199,000 for November. The report also showed a surprise drop in the Unemployment Rate to 3.7%, from 3.9%. The general takeaway is that the labor market is still strong but showing signs of softening. Checking on the consumer sector, mortgage rates last week declined to 7.03% for the average 30-year fixed-rate mortgage. Rates are still near their highest level in more than 20 years. Gas prices dropped a penny to $3.23 per gallon for the average price of regular gas. That’s the lowest price since mid-January and down 15% since the recent high in August.

Year-to-date through end of day last Friday, the S&P 500 is up 19.92%, Dow Jones up 9.35%, and the Russell 2000 up 6.79%.

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers. This is not a solicitation or offer of service in states we are not licensed in.

Independent, fee-only, fiduciary standard | Erie CO Financial Advisor serving greater Denver/Boulder | Investment Management, Retirement Planning, Wealth Management 

#investing #marketbrief #stockmarket #retirement #wealthmanagement #financialadvisor #retirementplanning #investmentmanagement #retirementincomeplanning

You snooze and win – Market Brief November 6, 2023 Financial Advisor

It’s that time of the year again when we bid farewell to longer daylight hours and welcome the coziness of fall. And as daylight saving time ends, it’s an opportune moment to examine the daily habits that affect overall success.

Wondering how sleep and your money are related? New research found that people performed better on cognition tests when they were allowed to snooze for an additional 30 minutes (New York Times), and those who employ a budget tend to be more optimistic and have better overall mental health (Forbes). Also, you don’t have to be a genius to know that establishing valuable routines – like those of CEOs and top industry thought leaders (Wall Street Journal) – can ultimately lead to better decision-making, too, both financially and in other areas of your life.

Remember, taking care of your health and financial wellness isn’t a one-and-done. It’s in the continual small steps you take every day. And the great news is you’re not going it alone. Speaking of which, if you need that extra push to update an allocation or set new goals for 2024, now’s the time to talk!

Sometimes, when the world seems chaotic, spending as little money as possible can feel like the only thing that makes sense with our finances. But is that the right approach for right now? When it comes to your overall wellness, it’s not just about pinching pennies. True success encompasses achieving a well-balanced and fulfilling life. Saving and investing are to help you pursue long-term goals. It’s equally important to consider your emotional goals along the way.

Life is meant to be LIVED, after all.

If you’re considering a change that may not make financial sense right now. Whether it be a sabbatical or other type of leave, a dream vacation, or undertaking a home renovation. Consider it an aspiration that may be worth it in the grander scheme of things. Remember, not every decision needs to revolve solely around numbers and spreadsheets. Working together, we can better understand your aspirations, habits, and tendencies. So you can identify moments when taking a risk could be beneficial – in more ways than money.

Market Brief

The stock market is coming off its best week of 2023. But it is also coming off its first three-month losing streak since the first three months of 2020.

Earnings reports should be the main driver of stock prices this week, as there are no top-shelf economic reports due. The highlight of the week will be when Fed Chairman Powell speaks to the IMF on Wednesday and Thursday. Mortgage Rates softened to 7.76% for the average 30-year fixed-rate mortgage. Rates are still at their highest level in more than 20 years. Last week was the best week in 2023.

Last week, the Fed kept interest rates steady, as expected, and employment data boosted stocks. Dow was up 5.1%, S&P 500 up 5.9% and Nasdaq up 6.6% for the week. Year-to-date, all indices are in the positive.

Independent, fee-only, fiduciary standard | Erie CO Financial Advisor serving greater Denver/Boulder | Investment Management, Retirement Planning, Wealth Management 

#investing #marketbrief #stockmarket #retirement #wealthmanagement #financialadvisor #retirementplanning #investmentmanagement #retirementincomeplanning

Click here if you would like to learn more about your options and if we can assist you with your wealth management, investment, and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers. This is not a solicitation or offer of service in states we are not licensed in.