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Invasion Continues – Market Brief March 7, 2022

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management March 7, 2022March 7, 2022financial advisor, investment management, market brief, retirement income planning, retirement planning, wealth management

The Russian invasion of Ukraine extended the stock market’s losing streak last week. The invasion intensified, sending global commodity prices soaring and sustaining volatility. Uncertainty is mounting. With the spike in commodity prices, global central banks’ mission to curtail inflation becomes more difficult. For the week ending Friday, Nasdaq fell 2.75%, S&P 500 down 1.24%, and the Dow Jones down 1.23%.

The last two weeks, the world changed. As we watch the horrifying events unfold in Ukraine and the political and economic fallout, it’s hard not to worry. One thing that can help when you feel worried is to identify and take small steps to create positive results. For example:

– review your portfolio, we can look for ways to diversify your investments if needed to help reduce risk and renew your confidence that we continue on the path to help achieve your long-term goals
– don’t forget about other money deadlines, like your tax preparation for filing this year
– take time to recognize signs of burnout and focus on your personal wellbeing

Last Week – Invasion Continues

With geopolitical tensions rising, investors ignored highly positive economic data in the U.S. last week. The S&P 500 hit an all-time closing high on the first day of trading this year. Since then, the index reversed and is down 8.94% year-to-date as of last Friday. Crude oil closed at $115.68 per barrel on Friday, rising 26.30% for the week. Crude hasn’t seen per barrel prices of $100 or more since 2014.

The jobs report released last week showed the U.S. added 678,000 jobs in February, which was well above expectations. The unemployment rate fell from 4.0% in January to 3.8% in February. Slightly above the 3.5% rate from February 2020. Both readings of the February ISM Manufacturing and Non-Manufacturing Indexes continued to indicate expansion. Supply chain issues and labor shortages remain a headwind for both. However, this comes amid strong demand as the economy continues to reopen.

On Wednesday, Federal Reserve Chairman Jerome Powell confirmed rate hikes were coming, while acknowledging uncertainty related to Ukraine. He also said he would support a quarter-percentage-point rate hike at the Fed’s upcoming meeting on March 15-16. This is the Fed’s first rate increase since 2018. Powell also said the Fed will tread carefully given geopolitical turmoil and its uncertain impact on the U.S. economy. The comments all but end speculation that the Fed would raise interest rates by 0.50% at the March meeting. Larger rate hike are not ruled out for future meetings if inflation doesn’t come down from current four-decade highs.

Week Ahead

Uncertainty is only mounting. The spike in commodity prices is making the global central banks’ mission to curtail inflation increasingly more difficult. Inflation data will dominate investor headlines this week. On Tuesday, the NFIB small business optimism index for February is forecast to hold in the high 90’s range. Small business sentiment, already hurt by wage inflation, could worsen as the Ukrainian invasion further pushes up gas prices. On Wednesday, weekly mortgage applications are expected to extend recent declines. Largely thanks to the February surge past 2.0% in the 10-year Treasury yield.

In addition to weekly initial unemployment claims, Thursday brings the consumer price index report for February. The all-items CPI is forecast to rise 0.7% on a month-over-month basis and 7.9% year-over-year. Wrapping the data week on Friday is University of Michigan consumer sentiment. The reading is expected to drop to 61.7 for March from 62.8 for February. The war in Europe adds to consumer worries. Year-to-date, the Dow is down 7.5%; the S&P 500 is off 9.2%. The Nasdaq is now down 14.9% year to date.

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.

Starting Now – Market Brief February 28, 2022

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management February 28, 2022February 28, 2022financial advisor, investment management, market brief, retirement income planning, retirement planning, wealth management

Starting now, when is the best time to plant a tree? According to the old Chinese proverb, the best time was 20 years ago, but the second-best time is now. There’s such great wisdom in that proverb when it comes to your financial strategy, especially when you consider the bumpy start the economy has taken so far this year. Volatility can cause anxiety. Maybe you’re worried you aren’t on track for the retirement you envision. Maybe you think it’s too late to start. I’m here to tell you that it’s not.

Starting now, we can work together on a strategy that puts you in the best path possible to pursue your long-term goals. We can modify our existing strategy to meet new economic realities or as your goals evolve. Starting now, we can build your confidence in the financial future you want for yourself and your family. Let’s keep the conversation flowing, schedule a time to talk, and reach out with your thoughts.

Last Week – Starting Now

The S&P 500 and Nasdaq indexes both gained on the week after being down more than 5% at the week’s lows. The large focus last week was on the Russian invasion of the Ukraine. Despite the invasion and following sanctions against Russia, the Fed is likely to remain focused on inflation, and sticking to the plan to raise rates.

Consumer spending, wages, and durable goods orders all surged higher. Rising home prices and and higher mortgage rates led to a 4.5% decline in new home sales. Pending home sales also dropped 5.7% in January. The Dow down 0.03%, S&P up 0.84%, and Nasdaq up 1.1%.

Week Ahead

Human and economic assessment is taken into account this week. Along with what actions world leaders take beyond the already imposed sanctions against Russia. From the economic standpoint, eyes are on the U.S. employment report coming out on Friday. Over 1.6M jobs have been created the past 3 months despite the impact of Covid variants, and another strong report may put further pressure on the Fed’s tightening schedule.

Year-to-date index performance; Dow down 6.3%, S&P down 8%, and Nasdaq down 12.5% 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.

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

Market Brief February 22, 2022 – Sloppy Spring?

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management February 22, 2022February 22, 2022financial advisor, investment management, market brief, retirement income planning, retirement planning, wealth management

Is a sloppy spring in store this year? Tax season is underway and it may be a little more complicated this year due to a backlog at the IRS. As we continue to recover from the pandemic’s effects on the economy and our individual finances, you may be facing some complicated situations or a backlog yourself.

Whatever questions you have, know you’re not going it alone. A problem shared is a problem halved. Together, we can tackle each issue you’re up against – whether it’s concerns about your tax return, an aging parent, or even strategies around how best to save for more of life’s unexpected changes. Even the most complicated situations can be simplified into actionable next steps. And I can be a great resource for you. Reach out and let’s talk about it.

Last Week

The stock market fell last week as the attention changed from inflation to the potential Russian invasion of Ukraine. The geopolitical uncertainty renewed investor interest in safe assets going into President’s Day weekend. The invasion does not necessarily impact corporate profits in the U.S. Therefore, a stock market drop due to the invasion could be viewed as a buying opportunity. For the week, the DJIA was down 1.9%, the S&P 500 was down 1.6%, and the Nasdaq was down 1.8%.

Trading remained volatile and inflation pressure remains. Amid supply-chain crisis and strong demand, January all-items producer price index was up 1.0% m-o-m and up 9.7% y-o-y. Consumer spending remains strong too. On Wednesday, January retail sales surprised with a 3.8% increase from December’s decline. And better than the 2.0% consensus estimate.

Also on Wednesday, U.S. Industrial production rose 1.4% following December’s decline. On Thursday, January housing starts slipped. Permits went the other way, rising to an above-consensus figure, suggesting that the spring building season may be strong. On Friday, existing home sales for January were also strong. Existing home sales were up 6.7% month-over-month, though down 2.3% year-over-year as available-homes inventory remains near record lows. Mortgage rates continued to rise, and new home construction fell 4.1% in January. Resulting from tight labor and materials but permits to build lifted to the highest levels since 2006.

Week Ahead – Sloppy Spring?

The current holiday-shortened data week kicks off today with the Case-Shiller home price index. Economists look for a 1.1% monthly gain. The Conference Board’s Consumer Confidence index expects a decline for February as inflation adds to consumers’ concerns. On Wednesday, the weekly mortgage application report expects to continue the downward trend. Rising interest rates are forcing more would-be homebuyers out of the market. Thursday brings the second (preliminary) estimate of 4Q21 GDP. The report expects the forecast to edge up to 7.0%. Thursday also brings January new home sales, which are expected at an 801,000. On Friday, U.S. durable goods orders and core capital goods orders are both forecast up 0.5% month-over-month. The industrial sector continues pushing out all the goods it can to reach high demand amid the supply chain crisis.

This week marked two years since the pre-COVID-19 market high and the stay-at-home trade may have finally run its course. Many pandemic favorites indicated slowing growth including Shopify, Etsy, and Roblox. Fun investment nugget, Hilton Worldwide is now outperforming Zoom Video Communications since the pre-pandemic market peak in February 2020. Year-to-date index performance; Dow down 6.2%, S&P down 8.8%, and Nasdaq down 13.4% 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.

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

Market Brief February 14, 2022 – Love & Money Connection

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management February 14, 2022February 14, 2022financial advisor, investment strategy, market brief, retirement income planning, retirement planning, wealth management

This week I couldn’t resist sending out a fun finance-related “Love & Money” market brief on Valentine’s Day. This particular holiday can be tricky, as many people tend to have mixed emotions about their love life at times – and you could say the same goes for how people feel about their financial strategy.

Sometimes the matters closest to our heart are the most difficult to discuss, and that’s all the more reason to address it. Working with a trusted financial professional can give some great insight on how to break through psychological barriers to understand what’s truly behind your money behavior. I hope it sparks that need-to-have talk with the someone you trust.

Last Week

The stock market returned to its bearish ways. January CPI posted its highest annual increase in 40 years. For the week, the DJIA was down 1.0%, the S&P 500 was down 1.8%, and the Nasdaq Composite was down 2.2%. The S&P 500 fell hard at the end of the week, falling on both Thursday and Friday. The two-day loss was 3.7%, the worst since 2-day’s since Q4 2020. Interestingly, the index fell 9.6% in 2020 while the current decline is 9.8%.

Weekly mortgage applications tanked 8.1% last week thanks to rising interest rates. With the 10-year yield rising, stocks’ forward 12-month P/Es have been falling. On Thursday, the January all-items CPI was up 0.6% month-over-month and 7.5% year-over-year. Core CPI was up 6.0% from a year ago. That represented the greatest increase in annual core CPI since 1982. Used-car prices jumped 40% from last January and were a major contributor to the overall increase.

The rising price news puts additional pressure on the Fed, as markets are now pricing in a better than 50% probability of a 0.50% rate hike in March and creating whispers of an inter-meeting move. Some analysts are anticipating up to seven 0.25% increases for the year.

In a market looking for good news, weekly initial jobless claims came in at 223,000, below the 230,000 consensus; continuing claims continue to set new post-pandemic lows, at 1.621 million. Consumers confidence is down, pointing to one major concern – inflation… superseding any good news, wages, or Omicron.

Week Ahead

Kicking off with V-day today, bulls will be anxious to see if investors can rediscover their love for stocks. Unfortunately, Tuesday brings the January PPI. In this period of supply-chain crisis, expectations are for an annual change of 9.2% in all-items producer prices.

The Fed also has a scheduled “closed-door” meeting today focused on the “advance and discount rates”, fueling speculation of potential action between scheduled meetings. Whatever the outcome, it seems the only certainty is continued volatility, especially with the Russia-Ukraine situation sparking additional fears late last week. A Russian invasion on the Ukraine would likely set off a rush to lower-risk assets. However, it does not change the outlook for corporate profits over time, so any drop in equities will likely be temporary.

The end of the week presents housing data with existing home sales and construction spending. Some home buyers have pulled back as mortgage rates have jumped to near 4%, with applications dropping last week. Year-to-date, the Dow is down 4.40%; the S&P 500 is off 7.29%; and the Nasdaq Composite is back in correction territory, down 11.85% as of last 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.

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

Market Brief January 31, 2022

jim Financial advisor, Investment Management, Market Brief, Retirement Income Planning, Retirement Planning, wealth management January 31, 2022January 31, 2022financial advisor, investment management, market brief, retirement income planning, retirement planning, wealth management

U.S. equities rallied late in volatile trading as investors worried over Fed policy, rising interest rates, and high inflation. Investors may be looking for some relief after a bumpy January. This week kicks off another busy week of economic data. Three central bank meetings are on the calendar along with the monthly U.S. jobs report.

Last Week – Fed & Inflation

Despite wild intraday gyrations in the stock market last week, the S&P 500, the Nasdaq, and the Nasdaq 100 were all basically flat for the week. But at the end of it all, that was an improvement relative to recent weeks. The market saw a huge rally on Friday, with the S&P 500 soaring 2.4%, while both the Nasdaq and QQQs rocketed 3.1% higher. It was the largest daily gain for the “500” since June 2020 and the biggest jump for the other two indices since March 2021.

The stock market finally had a winning week, the first of the year, though January remains deeply in the loss column. Equities are under pressure from inflation, supply chain, Fed decisions, and Covid-19 restrictions. Last week was one of the busiest of the 4Q earnings season. Earnings were overshadowed by the GDP data, which in turn was overshadowed by the Fed meeting. Last Tuesday, the Case-Shiller Home Price index showed unrelenting home-price inflation, with prices up 1.2% month-over-month for November and up 18.3% year-over-year. December new home sales on Wednesday came in at an 811,000 SAAR, topping expectations for 760,000.

The Federal Reserve’s policy statement from last week plus Jerome Powell’s post-meeting press conference made it abundantly clear it is ready to start raising short-term interest rates in March. The futures market is now pricing in 5 rate hikes in 2022, 25 basis points each. Some believe there could be more. This would not be surprising as the Fed is behind the inflation fighting curve. The December Consumer Price Index rose 7% in 2021, the largest yearly increase since 1981.

Week Ahead

The current week mercifully says goodbye to January, which has been the worst opening month for stocks since 2009. On Tuesday, the ISM’s manufacturing PMI is forecast to signal continued expansion. But, at a consensus 57.5 reading for January, this series is likely below the 60 level that prevailed for almost all of 2021. This results from the given current realities of inflation, supply chain, and COVID.

On Tuesday, construction spending is forecast to rise 0.7% for December. The JOLTs job openings for December is forecast to remain north of 10 million. On Wednesday, ADP’s private payrolls report is expected to come in at 225,000 for January. This is down from the prior 807,000 for December. On Thursday, economists will watch initial unemployment claims for signs that Omicron impacts are receding; from a prior 260,000, economists are looking for as few as 230,000 new initial claims. On Friday, January nonfarm payrolls are forecast up by 200,000, in line with December’s 199,000 gain. Unemployment is expected to hold steady at 3.9%. And hourly wages are forecast up 5.2% year-over-year.

Earnings season is under way and announcements expected this week include Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Exxon Mobil Corp, and many more. Year-to-date through Friday; the Dow is down 4.4%, S&P 500 down 7.0% and Nasdaq Composite down 12.0%.

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.