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, 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.

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