Don’t like the direction of stock market averages?
Don’t like the direction of stock market averages or interest rates. Wait a day. This week's news on inflation discouraged analysts and markets from expectations that the Federal Reserve will lower interest rates this year. Markets still expect at least one possibly two rate decreases this year but not until the end of 2024. Facebook announces huge expenditures on LLM, or large language models related to artificial intelligence. Although the revenues and earnings met market expectations, the exceedingly large spending on artificial intelligence tools led investors to sell Facebook or meta. A 10% decline in share price was the result the next day and that news caused market declines across all stocks. The higher-than-expected consumer price data the next day also contributed to declines with interest rates heading higher as well. Just wait a day until Google or Alphabet and Microsoft report earnings on Thursday and we have a reversal with markets heading higher, especially the NASDAQ and interest rates heading lower. To add to the positive earnings of both Google and Microsoft, Google is paying its first dividend of $.20 per share. Advertising revenue at Google increased and Microsoft reported demand for its cloud services related to Artificial Intelligence was above capacity.
At the same time as inflation news, Gross Domestic Product first reading for the 1st quarter indicated a growth slowdown. With inflation remaining higher than the Fed goal of 2% and economic growth slowing down many of us remember stagflation. Too early to come up with that conclusion because there are some indicators of economic activity slowing down as credit card balances are growing and consumer spending is slowing down. But still no indications of a recession.
At SAS our clients are as diverse as our team. We are proud that our goal is to provide financial planning to any person or family that wants to engage in our process with no minimum income or assets necessary as a qualifier. We view our first task as assessing a client's entire life far beyond financial data and decisions. Only after developing their financial plan do we make recommendations in regard to decision making and investments. Investment management is only discussed at the end of the financial planning process. There is no obligation to use our investment management services after the planning process is completed. If we manage assets for our clients, then ongoing financial planning is included as part investment management. One financial planning issue that is inevitable with all clients is the aging process. Either directly for our clients or for our clients' parents. We will be offering more resources going forward to help our clients with this inevitable challenge. I am one example as I am 73 now and worked with my parents in the last years of their life. We are here to bring up the difficult but necessary decisions.
In the News
Death doula Alua Arthur says life is better if you 'get real' about the end : NPR
New FAFSA rules opened up a 'grandparent loophole' that boosts 529 plans
This website is informational only and does not constitute investment advice or a solicitation. Investments and investment strategies recommended in this blog may not be suitable for all investors. SAS Financial Advisors, LLC and its members may hold positions in the securities mentioned within this newsletter. SAS Financial Advisors, LLC is not responsible for any third-party content referenced.
The SAS Newsletters are posted on the SAS Blog weekly:
