Today’s 3rd quarter revised GDP numbers were raised from 4.9% to 5.3% causing the equity markets to rally early in the morning, bond prices to rally because the Fed signals rate increases might be over. Economy grew third quarter more than first estimated The inverted yield curve slope is declining although still inverted. We were discussing investing with a client this week and we described an environment as kind of a “Goldilocks” market environment. However...
The big news this week was the decline in inflation numbers: Inflation was flat in October from the prior month, core CPI hits two-year low The annual inflation rate measured 4% and the monthly increase was .2%, the lowest increase since September 2021. Markets reacted with a steep drop in interest rates as well as the largest gain for averages this year. Also, any anticipated rate increases from the Fed for the last meeting of...
Feels like we are on a Treadmill with markets going nowhere. After a winning streak of 8 days, markets declined on Thursday. There was a 30-year Treasury auction that was received by higher yields than expected. Much of the recent gains in the stock market were influenced by a steadily lowering yield on long term treasuries. In fact, this week the 30-year mortgage rate dropped for the first time in a long time. Cold water...
Today, Friday, the employment report reported fewer jobs than expected. OK, we want employment numbers to be strong because that means the economy is strong right! In today’s and I do mean exactly today, not tomorrow or yesterday, weaker than expected employment numbers mean that perhaps, and I say perhaps, this means that the Federal Reserve could be done raising interest rates. Therefore, stocks rallied yesterday and today to reverse a September and October decline...
The Nasdaq index has entered correction territory with a big decline on Wednesday this week and it looks like the downward trend will continue tomorrow with a disappointing outlook from Meta ( formerly Facebook) after the market closed today. Yesterday, it was the results from Alphabet ( formerly Google) from their cloud division that led the market lower today. On the other hand, Microsoft offered markets good earnings results with a favorable outlook. Thes technology...
As I am watching President Biden addressing Americans and the world from the oval office talking about our overseas crises. This is the worst job in the world or at least the 2nd worst with the Speaker of the House of Representatives taking first place. No denying we have more than our share of challenges at home and abroad. Politics does affect economies but investing based on politics is a very unreliable combination. Part of...
Back to the yield curve. The severe inversion during the last year and a half is reversing. The yield curve is still inverted but it is becoming less steep. The 10-year yield closed at 4.73% up from 3.79 % a year ago and the same rate on January 1 , 2023 . Intermediate and long-term rates are higher across the board. Short term rates are higher across the yield curve as well but the increase...
A looming government shutdown is causing concern among investors with the shutdown scheduled for midnight Saturday. It will have an impact on various sectors of the economy including airline and transportation services, goA looming government shutdownvernment services including publishing the social security increase for 2024, economic statistics from the labor and commerce department, and more. Government Shutdowns Q&A: Everything You Should Know | Committee for a Responsible Federal Budget How a government shutdown could impact...
The Fed keeps interest rates unchanged but states one more rate increase in 2023 and two rate reductions in 2024. Market reaction so far is muted but mostly declining. The bottom line is the Fed is saying interest rates will remain higher for longer as markets expected 3 rate reductions in 2024. Again, the Fed wants to position itself as aggressive in fighting inflation as inflation expectations are a major factor in actual inflation rates...
The House has two weeks to pass 12 spending bills. This could be a problem. So far, markets are sanguine as are interest rates. Despite the slightly higher inflation numbers for August rates have been stable at high levels. Gasoline prices seem to be the problem. Recession fears have abated, and economists do not expect the Fed to lower rates until the 3rd or 4th quarter of 2024. Economists expect GDP growth for the rest...
September begins as August began for markets. There are various concerns cited as markets sell off only after markets sell off. Predictions about market movements over the short term before they happen over the short term are pretty useless. They are right in direction 50% of the time and only because of the natural odds. It is true that historically September and October are months when the stock market declines. Of course, that is true...
It feels like we have been in the process of transition for a while now, but the time has come we will fully be over to Schwab as of September 5th. Starting at the end of today TD Ameritrade will be accessible for reading only. Here are some reminders of what to expect as we become part of Charles Schwab & co. Today, Sept 1st, is the last day to initiate and Move Money, deposit...
