Financial advisor Archives - Page 12 of 15 - Rocky Mountain Financial Solutions

Ripple Effect of the Blocked Suez Canal

jim Economy, Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market March 29, 2021March 29, 2021economic outlook, Economy, financial advisor, market brief, Market Commentary, Market Outlook, Market Review, Stock Market

Despite the Suez Canal blockage, disrupting global trade, U.S. equity indices fluctuated between gains and losses throughout a volatile week. Month- and quarter-end flows hang over the market, but J.P. Morgan’s head quant expects flows to be net positive for equities, opposite of consensus. Also, the monthly jobs report is Friday.

Last Week

U.S. equity indices fluctuated between gains and losses throughout a volatile week but surged in the final hour of Friday’s trade. The Treasury yield rally consolidated amid technical headwinds and dovish Fed comments. The re-opening trade took a deep breath but is still +35% since the November 9 Pfizer vaccine announcement. The Nasdaq Composite failed to finish higher, but it did close notably off the lows. Energy dropped precipitously early on but sharply retraced losses after a cargo ship completely blocked passage in the Suez Canal.

Fed Chair Powell’s testimony reiterated the FOMC’s belief that inflationary pressures would only be temporary. Treasury yields began the week dropping significantly on Monday and Tuesday, as Fed Chairman Powell confirmed the Fed’s commitment to loose monetary policy. He insisted that the he does not believe a surge in inflation this year will be persistent or large. Powell believes that the Federal Reserve has the tools necessary to deal with higher inflation.

Existing home sales fell 6% in February, and new home sales dropped 18% Month-over-Month. However, new home sales are up +8.2% Year-over-Year. Durable goods orders fell for the first time in 10 months. Services activity came in at an 80-month high, supported by the steepest increase in new business in 3 years. Backlogs increased though, while prices surged on unprecedented supply chain disruptions. European PMIs came in much better than expected as well, returning to manufacturing growth for the first time in 6-months. The services sector remains in contraction, hampered by the COVID-19 related lockdowns.

Week Ahead

Month- and quarter-end flows hang over the market this week. The shortened holiday week features a docket full of Tier 1 economic data. Revisiting Friday’s bewildering market movement is critical. Shares of some media and technology companies were cut down significantly. Weekend reports tie this to an over-levered fund’s liquidation. The technology-heavy Nasdaq’s ability to rally sharply in the face of higher yields seems notable too. As the calendar turns, April offers investors a potential seasonal tailwind. Historically, it’s been the strongest month for the S&P500, higher 74% of the time since 1964 by an average +1.7%. Rebalancing could create a few speedbumps though.

Over the last 3 months, 10-year yields have risen 74 basis points, while the major U.S. equity indices have climbed modestly. The S&P 500 and Nasdaq Composite are +5.82% and +1.92% respectively, but equal weight S&P500 is +11.52% as the median stock has performed better than the market-cap behemoths. The monthly jobs report is on Friday, but markets will be closed in observance of Good Friday. Next Sunday’s futures opening could be chaotic as global investors react to our labor market situation, but they also may place more weight on the ADP report mid-week. Both are expected to show solid job creation, but the Fed remains focused on the slack in the labor sector, which is illustrated through the underemployment rate. Tuesday’s consumer confidence is poised to jump sharply given the stimulus deployment and vaccine progress.

Year-to-date index performance; Dow up 8.06%, S&P up 5.82%, and Nasdaq up 1.94% through the close on Friday.

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.

Despite Rising Yields, the Economy is Marching Forward

jim Economy, Financial advisor, Investing, Investing Strategy, Market Brief, Market Commentary, Market Outlook, Market Review, Retirement Planning, Stock Market, wealth management March 8, 2021March 8, 2021financial advisor, Investing, Investing Strategy, market brief, Market Commentary, retirement planning, wealth management

Let’s do a reality check. With tax season in full swing, markets doing their day-to-day dance and winter weather still causing havoc, it’s sometimes hard to know what’s going to happen next. In light of the events of 2020, some may be carrying added anxiety into this time of year. Spring and brighter days are on the way as the nation continues marching forward.

Because anxiety can lead to irrational money decisions, the best way to fight it is to take a deep breath, focus on your goals and then take the next step forward — no matter how small. Before long, you’ll find yourself “marching” forward with momentum and greater confidence.

Last week

Fed officials failed to settle concerns over rising yields. Major equity indices rallied sharply into the weekend after the positive February non-farm payrolls report. The Johnson & Johnson’s vaccine approval propelled the early week rally. The rally fell as Fed chair Powell reiterated the FOMC’s view that rising price pressures are likely transitory. The rates market viewed this “do nothing” attitude as a reason to dump bonds. The tech-heavy Nasdaq losses captivated investors’ attention. This mark the third consecutive weekly decline. The growth index markedly underperformed value as that reopening rotation continued.

Week Ahead

The U.S. Senate passed the $1.9 trillion COVID-19 aid package, so the bill now will go to the House. That said, Friday’s plunge and reversal has elicited calls of surrender, but most technical metrics failed to reach such levels. The indices’ quick rebound should be a warning to the bears, but neither party seems to have the upper hand when looking at the technical charts. This fight is likely to continue, leading to elevated volatility levels. The darling high-growth names have not recovered anywhere near the extent that big tech companies have. And the easing of yields is likely needed to boost them. The weak Treasury auction two weeks ago sent yields sharply higher, so this week’s demand for government paper will be closely watched. The Federal Open Market Committee’s next policy meeting is on March 17 and will provide updated economic projections.

Despite what happens to the economy, you have the right to be confident — you have crafted a plan and I’m here for you each step of the way. As Warren Buffett famously said, “I don’t try and guess interest rates, I just buy businesses I like.” Maybe your next step is to set up some time to talk about your options for marching forward? I’d welcome that! Year-to-date the S&P 500 is up 2.29%, Dow Jones Index is up 2.91%, and the Nasdaq up 0.25%.

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.

Financial Advisor Erie CO focus on investments, wealth management, retirement in Boulder, Louisville, Niwot, Lafayette, Windsor, Berthoud, CO

Rising Yields and Impact for your Money

jim Economy, Financial advisor, Market Brief, Market Commentary, Market Outlook, Market Review, Stock Market March 1, 2021March 1, 2021economic outlook, Economy, financial advisor, market brief, Market Commentary, Market Outlook, Market Review, Stock Market

Treasury yields rose significantly over the course of last week. The rising rates spooked equity investors, reaching the highest levels since February 2020. And the highest one month gain since November 2016. Yields ended the week down from the high on Covid-19 vaccine optimism, a recovering U.S. economy, and massive stimulus deal near completion. For the week, major indexes finished down; Dow down 1.9%, S&P down 2.41%, and Nasdaq down 4.9%.

Rising Yields

The high yields lead to concern for inflation. With inflation, comes demand for higher yields. Higher yields are passed down to corporations by way of borrowing. If companies have debt or increase their debt, than in return, they will pay higher interest payments. Higher interest payments cut into their profits, therefore, companies report lower earnings and their overall valuation declines. Rising rates are not all doom and gloom. Fed Chairman Powell made this statement regarding higher yields last week, “statement of confidence on the part of the markets that we will have a robust and ultimate complete recovery.” Regardless, interest rates remain the focus of market stress going forward.

Week Ahead

Last week, U.S. jobless claims of 730K were lower than expected, and lower than the previous week. The Johnson & Johnson vaccination news helped travel stocks jump. The J&J vaccine approval increases the push to vaccinate 100m people in the U.S. by the end of June. Further supporting the recovery and investor perception of a likely economic boom. Housing report data was strong. The House passed President Biden’s $1.9T relief package over the weekend. Despite the rising rates, this is all positive news to support the market. For the year, Dow is up 1.06%, S&P up 1.47%, and Nasdaq up 2.36%.

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.

Financial Advisor Erie CO focus on investments, wealth management, retirement planning in Boulder, Louisville, Niwot, Lafayette, Windsor, Berthoud, CO

Transfer Your Values Alongside Your Wealth

jim Estate Planning, family wealth, family wealth management, Financial advisor, Protection Planning, wealth management, wealth planning strategies February 24, 2021February 24, 2021estate planning, family wealth, family wealth management, strategic wealth management, wealth, wealth management, wealth transfer

There’s this lingering myth of “old money families” where wealth is easily passed from generation to generation. But studies have shown wealth attrition to be more common, as bad investment decisions, mismanagement and dilution of assets between heirs eats into the family fortune.

Overcoming the challenges that plague wealth stewardship comes down to two core elements – strong communication with your next generation and putting a proper wealth transfer plan in place. We’re here to guide you.

The Family Roundtable

One of the most common barriers in wealth transfer is a lack of transparency between generations. In higher net worth families, often the older generations will shield the scope of wealth from other generations to prevent them from abusing their inheritance. But early communication with your adult children about family wealth is key.

Having us as an independent voice to shepherd the conversation can help you and your heirs talk about transfer of wealth on equal footing. It gives you a chance to discuss your financial strategies, your plan for specific family assets including the family business, and any philanthropic goals or values you would like the next generation to steward.

It also provides a forum for the next generation to discuss their own aspirations, to share any fears, and, most importantly, to feel like they play a role not just as an inheritor of the family wealth but also as an active player in the preservation of that wealth.

We can act as an independent voice for the family roundtable, someone who can guide the conversation and ensure all questions are asked and answered. We can also pinpoint challenges and help both you and your heirs come up with strategies to navigate those challenges.

Formalizing the plan

In addition to guiding the conversation, we can also play a critical role in structuring your wealth transfer plan.

We can walk you through the different vessels for protecting wealth in the transfer, advise you on the different structures for trusts, identify assets to include in your will, outline the pros and cons of transferring wealth during your lifetime versus after death, and help you balance personal preferences with tax efficient strategies.

Estate plans are far from static; the wealth transfer process is an evolving discussion, one that we can help you navigate as life events like marriages and remarriages, births of children and grandchildren, significant health issues and death, change your family and your needs.

Amidst the change, it’s good to have a constant – who better to play that role than your financial advisor?

Contact me to learn more about transferring wealth.

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.

How Quickly Will the Economy Recover

jim Economy, Financial advisor, Investing, investment strategy, Market Brief, Market Commentary, Market Outlook, Market Review, Retirement Planning, Stock Market, wealth management February 8, 2021February 8, 2021financial advisor, Investing, market brief, Market Commentary, Market Outlook, Market Review, retirement planning, Stock Market, wealth management

Now that the great short-squeeze has lost most of it’s air, it’s back to business as usual. The indexes shook off the weak job numbers and are looking ahead to the economy recovering and growing. Last week all indexes finished up.

Last Week

January jobs created less than 50,000 new jobs. On the positive side, unemployment fell from 6.7% to 6.3%. The number of Americans filing for unemployment also declined for the 3rd straight week. Most of the Nasdaq’s gains were attributed to good earnings reports, surpassing estimates. And the volatility index dropped back into the 20’s, calming the fears of an immediate 2021 correction. Readings from the ISM report were above 50, signaling expansion. This is good news when trying to grasp how quickly the economy will recover.

The Week Ahead

The economy is continuing to recover, both at home and abroad, as vaccination efforts spread. When a stumble comes, fiscal and monetary policy will undoubtedly offer an arm to stabilize or stand up. That remains supportive to equities, government bond yields, and credit markets. Roughly 59% of the S&P500 has reported earnings, and 81% have beaten EPS estimates. Per FactSet, the blended EPS growth rate is +1.7% y/y versus December 31’s estimate of -9.3%. For now, investors will continue economic implications of the race between widespread vaccination and virus mutation, the resumption of consumption, and the likelihood of higher prices or inflation across the economy.

Total after tax income was up 7.2% in 2020, the most in any year since 2000. Right now, there is plenty of demand for goods. Incomes and savings are up year-over-year. While production is not. It is supply that is hurting. The perfect recipe for inflation. A very real threat to the long-term health of the US economy. This we will keep an eye on. Year-to-date index performance; Dow up 1.77%, S&P up 3.48%, and Nasdaq up 7.51% through the close on Friday.

Have a safe week!

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.