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

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From Halloween to Fall Back – Market Brief Nov 1, 2022

halloween

With Halloween behind us, I wanted to share some updates that I thought you’d enjoy. A mix of timely information about what is going on right now. Halloween is unique in that it’s filled with sights and sounds that try to tempt our fear. Sometimes it make us feel uncomfortable or afraid — with much of it staged. 

It reminds me of the acronym F.E.A.R.: False Evidence Appearing Real. Be on the lookout for F.E.A.R. because, while fun on Halloween, it has no place in your financial strategy. With the right planning, we can help put you on a well-lit path moving boldly toward your long-term goals. Even amid troubling economic changes. As always, I’m right here with you through it all.

The next big event coming up is when we fall back an hour. Are you planning on sleeping away the extra hour you gain during daylight saving time this weekend? If so, you’ve made a fantastic choice. Getting enough sleep is a key principle to enjoying good mental and physical health. According to the New York Times, more than a third of Americans are sleep-deprived, which can have detrimental effects on mood, memory, and health. Quite often, it’s the little things that we do that can make the biggest impact in our lives — particularly when it comes to our health — be it mental, physical, or financial.

The following market brief provides high level review of what happened last week, and what to expect the rest of this week.

Last Week. Despite disappointing earnings reports from large-cap technology companies, U.S. equity indexes finished higher after a stronger-than-expected GDP report. A modest deceleration in wage growth is positive but will not change the Fed’s path on rate hikes. The underlying picture highlighted slowing economic trends in key areas like consumer spending and investment. The S&P 500 Index rose nearly 4% solidifying two consecutive weeks of recovery from lows earlier in the month. The index currently sits almost 9% above the most recent bear market low. October finished as another whipsaw month returning nearly 9% as four of the last six months have seen the index move up or down greater than 8%.

Consumer confidence fell to a 3-month low in October as inflation and the economic outlook weighed. Sharply rising mortgage rates have crushed the housing market, as new home sales plunged 11% Month-over-Month in September and pending sales sank 10.2%. Home prices have started to come down but not nearly enough to offset higher borrowing costs.

This Week. A busy week looms with the U.S. jobs report due on Friday. A growing economy and continued low unemployment data leave the Federal Reserve primed to raise interest rates to fight inflation. A fourth straight 75bps lift from the Fed is priced into the markets. Investors will watch how Chair Powell might try to lay the ground for a change in pace going forward. Earnings season is winding down, but a handful of key releases will likely confirm slowing economic conditions. Year-to-date index performance; Dow down 9.57%, S&P down 18.15%, and Nasdaq down 29.04% through the close on Friday.

Investing in yourself isn’t indulgent — it’s mission-critical during these turbulent times. Please reach out if you feel inspired by what you’ve read or if I can be of further assistance in your financial strategy and goals. Hope you has a fun, safe Halloween. 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.

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

Market Brief – October 18, 2022

Last week, the S&P500 reached a new weekly closing low for 2022. U.S. equities finished a roller coaster week lower after a hotter-than-expected inflation report. This week, earnings season heats up. Earnings calls should discuss how corporations and consumers are holding up and if inflation is starting to relent. The Dow up 1.17%, S&P down 1.5%, and Nasdaq down 3.1%.

Last Week

In an up and down week, the gains were short lived, as September’s retail sales came in flat. The S&P 500 Index returned -1.53% last week. The previous weeks gain was eliminated. Which was only the second positive week out of the last nine weeks of trading. The index has trended down in 2022 and marked a closing low last Wednesday of 3,577.03. The last time the S&P 500 was in this range was late November 2020. Inflation expectations rose in the consumer sentiment report released on Friday.

Week Ahead

This week, earnings calls ramp up and how companies and consumers are dealing with inflation will largely be in focus. Goldman Sachs, Netflix, Tesla, Proctor & Gamble, and American Express are some of the key companies scheduled to report. Housing starts and existing home sales for September will be released as mortgage rates have surged to 20-year highs.

Year-to-date index performance; Dow down 18.45%, S&P down 24.82%, and Nasdaq up 34.03% through the close on Friday.

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

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.