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