Market Brief

The Grass Isn’t Always Greener – Market Brief October 9, 2024

jim Financial advisor, Investing, Investment Management, investment strategy, Market Brief, Retirement Income Planning, Retirement Planning, wealth management , , , , , ,

Hurricane Helene has left a mark not just on the landscape, but also on the lives of countless people across the southeastern U.S. And Hurricane Milton is about to reach land today, wreaking havoc again on an already damaged area. If you’ve watched the news coverage, or know people it’s affected personally, it’s easy to see the massive impact this storm has had. It’s during times like these that our priorities will suddenly shift in unexpected ways.

As we journey through the ever-changing financial landscape, it’s easy to become distracted by the dazzling allure of foreign opportunities and the seemingly effortless successes of others. The age-old adage “the grass is always greener on the other side” can often tempt us to cast our gaze outward, pondering possibilities that seem perpetually just beyond our grasp. But in doing so, you risk overlooking the fertile ground upon which you currently stand.

Amidst the daily din and ceaseless wave of headlines, it’s crucial to resist the fallacy that fulfillment lies somewhere other than in the present. True prosperity stems not from flitting from one external opportunity to another but from deeply understanding and nurturing your own immediate situation.

Your financial journey is unique and deeply personal, based on an array of circumstances, opportunities, and challenges. Never forget the powerful potential that resides in careful planning, thoughtful action, and a dedicated commitment to improvement. Contentment and prosperity are born from making informed, deliberate choices within the framework of the present. All in order to benefit the future for you and your loved ones. Having a plan in place before disaster strikes can make all the difference in your day-to-day and overall sense of security and well-being. Preparation can be a powerful tool in managing stress and uncertainty effectively.

What’s the first thing you think of when a storm threatens your household? Reconnect with the potential that lies right where you are. Together turning the dream of what seems greener elsewhere into your own thriving present and future reality.

Last Week – Hurricane

U.S. equity indices clawed back earlier losses, and interest rates jumped after Friday’s much stronger-than-expected jobs report calmed recession fears. The S&P 500 and Nasdaq indices ended slightly positive for the week ending October 4. September’s non-farm payrolls came in well above expectations. The unemployment rate dropped down to 4.1%, and wage growth topped estimates. A slower pace of interest rate cuts may be a likely result of the stable jobs report. Investors were reassured that the U.S. economy remains on solid footing. On Monday, Fed Chair Powell said the committee is not in a hurry to cut rates quickly. He continued adding that the FOMC will let the data guide its decisions. Weekly jobless claims remain low. However, the data may be distorted in coming weeks due to Hurricane Helene, Hurricane Milton, and the strike at Boeing.

This Week

Thus far, the Middle East conflict has only materially impacted energy markets. But investors are seemingly wary of any further escalation in tensions negatively affecting other global risk assets. There is some risk of an upside surprise in tomorrows U.S. CPI report. The ISM PMI services data showed prices charged by businesses rising at the fastest rate in six months. Such an outcome would reinforce the likelihood of quarter-point interest rate reductions going forward.

A slower rate cut pace has been the sentiment from Chair Powell and committee members who have spoken publicly recently. So today’s release of the minutes from that meeting may have little to reveal. Third-quarter EPS season is now underway and the next three weeks will be very heavy with earnings reports. Just prior to and just after earnings reports, companies are in a blackout period. During that time, a company cannot repurchase its stock. Large U.S. banks JP Morgan Chase, Wells Fargo, and Bank of New York Mellon kick off earnings season on Friday.

Have a great 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.

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

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.

The first half of 2024 is in the books – what vibe is ahead?

jim Financial advisor, Investing, Investment Management, investment strategy, Market Brief, retirement, Retirement Income Planning, Retirement Planning, wealth management , , , , , , ,

Happy belated 4th of July! Having recently come together to celebrate the spirit and freedom our great nation offers. I hope you took some well-deserved time to relax, recharge, and appreciate time with loved ones. Independence Day is a refreshing, early-summer break, lighting up not just the evening sky. As well as, reigniting our sense of balance, relaxation, and well-being. The hot summer vibe is here.

Much like a holiday provides solace from your daily grind, a financial sanctuary offers peace in our economic landscape. It’s a place where you can rest easy, knowing your finances are secure, allowing you the freedom to rejuvenate without constant worry.

1. Safety Nets: As your home shields you from the elements, an emergency fund protects against unforeseen financial storms.

2. Growth Spaces: Just as gardens bloom with care, diversified investments foster growth and long-term security.

3. Withdrawal Zones: Contributing to a Roth IRA now can allow you some well-timed tax advantages later when relaxation requires spontaneity and indulgence.

Let the summertime vibe propel you into a continual journey towards stronger, smarter financial habits. As read on social media and media outlet headlines, it seems every week there’s a new acronym to label the US economy. The “vibe” of the general population, this week it’s FOGO: The Fear of Getting Old.

But the movement gained traction years ago with FOMO, created to describe millenials’ (or anyone’s) fear of missing out. Then the pendulum quickly swung in the other direction as JOMO, the Joy of Missing Out, took over during the pandemic. You may also have heard of DINKs (double income, no kids), FIRE (financial independence, retire early), and HENRY (high earner, not rich yet). How about HIFI (high income, financially insecure)? Or ALICE (asset limited, income constrained, employed)?

Acronyms distract from the core issue: How to cope with the natural fears that arise when taking risks and living life to the fullest. The good news is you don’t have to fear aging or missing out. Together, we can assess the level of risk you’re comfortable with when pursuing your financial goals, leaving you with a sense of faith and freedom. Here’s to creating your sanctuary of financial well-being!

Last Week

As for last week, the Dow Jones Industrial Average was up 1.6%, the S&P 500 gained 0.9%, and the Nasdaq was higher by 0.3%. Year to date, the Dow is higher by 6%, the S&P is up 18%, and the Nasdaq is higher by 23%. Also, last week included good inflation news. CPI was 3.0% for June, down 0.3% from May. Core CPI dropped 0.1% from the prior month. Mortgage rates fell to 6.89% for the average 30-year fixed-rate mortgage. Gas prices rose a penny to $3.49 per gallon for the average price of regular gas. The Atlanta Fed indicators are forecasting growth of 2.0% for the 2Q.

The Week Ahead – Earnings Vibe

Wall Street and the rest of the nation will continue to monitor developments regarding the attempted assignation of former President Trump. Wall Street will continue to ponder whether an interest rate cut is likely in September, as a case for a cut seems to be building. Chairman Powell speaks on today in Washington, D.C. and his remarks will be telecast live. Though he spoke on Capitol Hill last week, but those comments were before key data showed consumer inflation slowing. Tomorrow, Retail Sales data is released. Then housing data and industrial production later in the week.

Earnings reports kick into high gear this week, starting with financials. Today, Goldman Sachs and BlackRock report. Tuesday it’s Bank of America, Morgan Stanley, and PNC Financial. Only 5% of S&P 500 companies have reported so far. General expectations are for 8%-12% earnings growth for 2Q. This follows 8% growth in 1Q and 10% growth in 4Q23.

The next Fed rate decision comes on July 31, with odds at 6% for a cut. Not very likely at the moment. By mid-September, there is a big jump in the odds to 96% for a rate cut. Accordingly, this spike follows the good news on inflation last week and the jobs report the week prior. For the November meeting, the odds are 99%, according to the CME FedWatch Tool.

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.

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

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.

Market Brief – New rules in this economy

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management , , , ,

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

jim Financial advisor, Investing, Investment Management, Market Brief, retirement, Retirement Income Planning, Retirement Planning, wealth management , , , , , , ,

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

jim Financial advisor, Investing, Investment Management, Market Brief, retirement, Retirement Income Planning, Retirement Planning, wealth management , , , , , , ,

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

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