Economic & Market Updates

Economic & Market Updates Written by Timothy Davis, CFP®

Market Update - February 14th, 2024

This week on Tuesday, February 13, 2024, we saw the biggest decline in the Dow Jones Industrial Average since March 2023 (per CNBC). The cause of this decline was a disappointing CPI report released in the morning.

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Market Update - February 1st, 2024

Yesterday, January 31, 2024, marked the final day for trading in the first month of 2024. It also ended with the worst day of the short New Year but we did manage a gain for the month which bodes well for the rest of the year. In fact, according to Tom Lee at FS Insights:

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Market Update - January 25th, 2024

I would like to present my observations of the markets starting with my apologies for being radio silent in the New Year, it has been a busy start to January! The same goes for the U.S. stock market as we suffered a bit of a New Year's Hangover in the first week of trading which shouldn't come as a major surprise since Q4 2023 was so good and many investors were waiting to take their profits in January and make any realized gains a 2025 tax problem. So where do we go from here, now that the S&P 500 and the Dow Jones Industrial Average have both made new highs?

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Market Update - December 21st, 2023

I hope you are having a great holiday season so far. Here in the Northeast, we just had what I would describe as a nasty combination of a Nor'easter & a tropical storm. The flooding in some parts of Northern New England (look up Sunday River) was pretty severe. It could be a little while before some of the ski mountains regain their footing. Too bad since this was a great start to an industry that has had a tough go of things in the past few years.

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2024 Outlook - December 4th, 2023

Good morning. It is the time of the year when various investment firms start to put out their 2024 Predictions, hoping the roll of the dice lands remotely in their favor. As is normally the case with our group, we simply try and look at what the data is telling us to help us have the best odds of a consistent and somewhat predictable outcome. To us, managing risk is the main objective. If you do that, you can control the volatility of your portfolio which helps to keep ret urns within an acceptable range

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Market Update - November 20th, 2023

The markets over the past year have been supported by the so-called 3 Pillars of Support (thank you Tom Essaye) supporting stocks over the past year. As long as these Pillars remain in place, the markets should be somewhat impervious to a significant pullback that would bring the S&P 500 to a level below 4000.

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Market Update - October 3rd, 2023

As you may recall, in our Portfolio Management Accounts, last month we reduced our Small and Mid-Cap exposure from Overweight and moved back to an Equal Weighting in that position. We moved the proceeds of that trade into a Market Neutral fund as we were concerned about the direction of the market and the possibility of a pull back.

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Market Update - September 28th, 2023

Good morning. Given the backdrop of interest rates rising faster than most money market funds can keep up, rates on Treasuries and CD’s are now the most competitive they’ve been in years. If you have any excess cash generating little to no interest, a CD may make sense for you:

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Market Update - September 27th, 2023

Good afternoon. According to Tom Essay at The 7’s Report, the S&P 500 saw its worse one-day drop yesterday, September 26, 2023, since March with a drop of 1.47%. Some tech stocks were down as much as 4+%. So, what exactly happened?

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Market Update - September 13, 2023

We wanted to provide you with a brief update to our portfolio that I manage on a discretionary basis and a change that I made to them on September 7th. On 9/7 we decided to trim back our overweighting to the small and large cap space and reallocate it to the Calamos Market Neutral Fund (CMNIX). After the rally that occurred during the summer months followed by the subsequent pull back that we’ve seen over the last few weeks, we decided it was appropriate to bring those two areas to an equal weighting.

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CPI Report - August 2023

I want to pass along a quick update on the monthly CPI (Consumer Price Index) report that was released yesterday. The report largely met the market’s expectations which is why you didn’t see a an overly volatile reaction from the market.

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Technical analysis is the study of past price and volume trends of a security in an attempt to predict the security's future price and volumetrends. Its limitations include but are not limited to: the lack of fundamental analysis of a security's financial condition, lack of analysis ofmacro economic trend forecasts, the bias of the technician's view and the possibility that past participants were not entirely rational in theirpast purchases orsales of the security being analyzed.

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As a follow up to our previously published article, What Is Going On With The Stock Market – Part I – we are going to cover what we believe investors need to worry about in the second half of 2023 and in to 2024.

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Every now and then you run across an article that really hits home with explaining things in a very clear and concise manner. I often quote Tom Essaye in my updates (he has a daily update I subscribe to) and this morning he had a great summary of How To Explain This Market.

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Market Update - June 27, 2023

For those of you that follow our updates regularly, you may have noticed we have been quiet for most of the month of June. The end of Spring/beginning of Summer always marks a busy end of the travel season (closed out by catching ballgames in Allentown & Harrisburg, PA!) for my team and the end of school for my kids so I don’t have as many quiet mornings to myself to opine on what is driving markets. Well, thanks for a 4:50 AM thunderstorm overnight and the smoke detectors going off shortly thereafter, I have had the last couple of hours to myself to finally put some thoughts on paper.

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Market Update - May 31, 2023

The month of May has been dominated by fears of the federal government defaulting on its debt payments, Artificial Intelligence getting real, interest rates testing highs for the year and an economy that continues to chug along despite calls for a recession.

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Market Update - May 4, 2023

My update is a little off schedule this week as I was waiting for the Fed announcement yesterday and the market reaction. As expected, short term interest rates were raised by .25% to a “Terminal Rate” of 5.00%-5.25%. More importantly, the FOMC (Federal Open Market Committee) confirmed that it intends to keep rates at this level for the foreseeable future and not raise any further. So, barring any unforeseen data that would force their hand otherwise, they are done hiking for this cycle which means from here the direction is sideways or down.

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Market Update - April 25, 2023

Earlier this year, I discussed the Hard Landing/Soft Landing/No Landing scenarios for the stock market and economy as a whole. You can view that report here. Since then, there has been conflicting data that supports all of these outcomes, but the market has viewed things through the soft/no landing lens. Where are we now? Since the beginning of the year, market performance has been all over the place. The Russell 2000, which houses most small cap stocks, has had a tough time with just above a break-even return as of 4/24/23. Meanwhile, as of the same date, the Dow Jones is up around 3%, the S&P 500 is just shy of 8%, and the Nasdaq is leading the pack with almost a 15% return. The JP Asset Allocation Index* is up 5.1% YTD.

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I hope you and your family had a good Easter weekend. My kids (9 & 11) commented this morning that it was a “quiet Easter” and I just told them that they are getting older and it’s not as much fun when you know the Easter Bunny isn’t real. So my daughter quipped back, “I guess holidays are just boring the older you get”.

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Current situation - Three large banks failed in the last week and that resulted in major pressure on bank stocks. For now, contagion seems contained but banks still face structural headwinds.

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Market Update - March 9, 2023

To say the start to 2023 for the markets has been an emotional roller-coaster would be an understatement. At the beginning of the year, it seemed like The Federal Reserve was going to engineer a “Soft Landing”, rates would soon peak and then drop by the end of the year and inflation had been beat. Then came the data. As February progressed, the economic data began to reverse the belief that inflation would be so easily beat. This was not too surprising since inflation tends to stick around a lot longer than we want it to. Of course, this leads to the fear that the Fed will raise rates too much, choke off the economy and get us back to a “hard landing”.

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Market Update - February 27, 2023

It was school vacation for those of us in New England last week, so my family and I were able to go down and enjoy sunny and warm Charleston, SC which was a treat. Even though we own a home in Hilton Head, SC, where I am fortunate enough to visit more frequently thanks to remote work capabilities and more clients in the Southeast for our practice, I had not yet had a chance to explore Charleston and I was not disappointed! Even though I was out of the office, I was still checking in daily.

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Market Update - February 13, 2023

Every now and then you come across an article that does an excellent job of articulating where we are at in today’s economy and markets. Last week in February 8th’s edition of the Sevens Report, Tom Essaye did just that. As Tom puts it, the market loves analogies and one of the most popular analogies of late has been will the economy experience, through the actions of the Federal Reserve’s rate-hike campaign, a Hard Landing or a Soft Landing? One thing that has been rarely, if ever, mentioned is a No Landing scenario.

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Market Update - February 6, 2023

I would like to share my views on what transpired last week, it was by far the biggest week of this short year and probably one of the biggest weeks we have seen since the beginning of the Federal Reserve’s rate-hike campaign to stamp out inflation. As we mentioned in our note to investors on 12/27/22, this market will be driven by economic data to start off 2023 and last week is when we got a ton of it.

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Market Update - January 23, 2023

We are now in our third week of the New Year and the markets have been positive all-around to start the New Year. This is important because of the so-called "January Effect" where the performance for the first month of the year can dictate how the rest of the year will play out.

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Inflation - Data from late 2022 clearly shows inflation has peaked, but it mush decline much further from current levels for the Fed to pivot.

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Market Update - Year End 2022

This will be the final update of the year for me and what a year it has been! I am not sure I can remember a year when so many forecasters/economists/”experts” got it wrong as they did in 2022! The culprit: Inflation. Even The Federal Reserve didn’t see this coming as they thought the Fed Funds would be at .9% by the end of 2022 and instead here we are at almost 4.50%!

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Market Update - December 14, 2022

Good morning. Given yesterday's Consumer Price Index (CPI) inflation report, I thought I would put out a few comments and chime in on the Fed Meeting later today.

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Market Update - November 8, 2022

Good morning. As you may have noticed, I have been a bit radio silent lately as my travel schedule has kept me busy which concluded with an investor conference in Charleston, SC. Yes, coming back to rainy Boston was tough but I am happy to be back home.

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Davis Wealth Management reports on market influences and how different scenarios could impact the economy.

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Market Update - October, 31 2022

I would like to begin this week’s update by congratulating my team for the Davis Executive Wealth Management Group being named a 2023 Five Star Professional. This award is based on submissions from a designated professional’s client base. Financial Advisor’s such as myself must satisfy 10 objective....

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Market Update - October 26, 2022

Good morning. Given the backdrop of interest rates rising faster than most money market funds can keep up, rates on Treasuries and CD’s are now the most competitive they’ve been in years. If you have any excess cash generating little to no interest, a CD may make sense for you.

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Market Update - October, 24 2022

The market continued its “don’t look now but things just took another big swing” last week with the S&P 500 up 4.74% for the week according to Factset. What were the reasons for the move? One of the biggest pieces of news came on Friday when Nick Timiraos of the Wall Street Journal...

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Market Update - September, 22 2022

On Wednesday, September 21st, as expected, The Fed moved up the short-term overnight borrowing rate, The Fed Funds, by .75%. This was widely expected which is why the market initially bounced higher off the news. Then Powell’s Press conference came where the Fed announced...

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Market Update - September, 19 2022

I know it sounds cliché to say “the volatility & trading range continued last week” but that is exactly what happened. The main drivers of the markets being down so much last week (S&P 500 -4.77% Source: CNBC) were: 1) Core Inflation readings still high 2) Terminal Fed Funds (where they will stop) being raised to 4.25%-4.50% 3) Earnings Warnings from a few high-profile companies.

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Market Update - September, 12 2022

Good morning. A recent quote from Jeff Saut’s weekly publication caught my eye. Jeff was quoting a portfolio manager from Greenbrier Partners which involved timing the market. In times like these, clients often ask: Why don’t we just get out of the market until things settle down? Ah, if it were only that easy!

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Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. The resulting number serves as an indicator of a company's profitability.

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This brochure is for informational purposes only. The author(s) are neither employees of nor affiliated with Steward Partners Investment Solutions, LLC. We are not implying an affiliation, sponsorship, endorsement, approval, investigation, verification or monitoring by Steward Partners of any information contained in the presentation. The opinions expressed by the authors/presenters are solely their own and do not necessarily reflect those of Steward.

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Market Update - August 2022

Good morning. This past Friday, we saw another significant daily drop in the U.S. equity indices with the S&P 500 down by -3.37% and the tech-heavy Nasdaq by -3.94%. The 10 year Treasury closed at 3.03%. Sources: CNBC.

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This brochure is for informational purposes only. The author(s) are neither employees of nor affiliated with Steward Partners Investment Solutions, LLC. We are not implying an affiliation, sponsorship, endorsement, approval, investigation, verification or monitoring by Steward Partners of any information contained in the presentation. The opinions expressed by the authors/presenters are solely their own and do not necessarily reflect those of Steward.

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Market Update – July 2022

Good morning. As some of you may have noticed, the markets have finally found some forward momentum and this week as the major averages closed at 6-week highs. Also, worth noting that the S&P 500 closed above its 50-day moving average for the first time since April. The next challenge for the market would be for the 50-day moving average to break through the 100-day & 200-day moving average to set up what is known as a Golden Cross which usually marks the beginning of a Bull Market.

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Inflation Update – July 2022

Good morning. Yesterday, July 13, 2022, we received another upside surprise in inflation with headline inflation up 9.1% over June 2021. To the surprise of many, the equity markets, which initially were hit hard in the pre-market after the 8:30 AM announcement of the inflation numbers, held up remarkably well.

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Quarterly InsightsWritten by Timothy Davis, CFP®

Quarterly Insights - Q4 2023

Markets staged an impressive reversal in the fourth quarter thanks to a surprise dovish pivot by the Federal Reserve, which combined with solid economic activity and declining inflation to push stocks sharply higher and send the S&P 500 to two-plus-year highs, resulting in the best annual return since 2021.

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Quarterly Insights – Q3 2023

The S&P 500 rose to the highest level since March 2022 early in the third quarter but rising global bond yields, fears of a rebound in inflation and concerns about a future economic slowdown weighed on the major indices in August and September and the S&P 500 finished the third quarter with a modest loss.

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Quarterly Insights – Q2 2023

The S&P 500 ended the second quarter and first half of 2023 at a 14-month high and most major stock indices logged solid gains in the second quarter following a pause in the Fed’s rate hike campaign, stronger-than-expected corporate earnings (especially in the tech sector) and the relatively drama-free resolution of the debt ceiling.

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Quarterly Insights – Q1 2023

The S&P 500 ended the first quarter of 2023 with a solid gain as hopes for an economic “soft landing” and the Fed signaling that their historic rate hike campaign is coming to an end helped offset two rate increases and the biggest bank failures since the financial crisis.

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Quarterly Insights – Q3 2022

Global markets declined again in the third quarter as inflation remained near multi-decade highs, geopolitical tensions escalated further, and the Federal Reserve continued to aggressively hike interest rates signaling future rate increases will be larger than previously expected.

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Quarterly Insights – Q2 2022

Good morning. Welcome to our Q2 Economic & Market Commentary. The S&P 500 continued to decline in the second quarter, hitting the lowest level since December 2020 as still-high inflation, sharp increases in interest rates, rising recession risks, and ongoing geopolitical unrest pressured stocks and other assets.

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Quarterly Insights – Q1 2022

After a historically calm 2021, volatility returned in the first quarter of 2022, as inflation surged to 40-year highs, the Federal Reserve promised to raise interest rates faster than previously thought, and Russia surprised the world with a full-scale military invasion of Ukraine, marking the first major military conflict in Europe in decades. Those factors fueled a rise in volatility and pushed stocks lower in the first three months of the year.

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Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.

Index Definitions 

Video Updates By Timothy Davis, CFP®

Davis Executive Wealth Management Call Series:  Featuring Kevin Simpson CIO Capital Wealth Planning

Timothy Davis and Kevin Simpson CO-Founder and Chief Investment Officer of Capital Wealth Planning LLC discuss Capital Wealth’s look back on 2023,  what went right and what went wrong.  Most Importantly, looking forward into the Investment Climate from 2023 and path to invest success.

Watch Video

Market Update Video - February 5th, 2024

As fans gear up for the big football game, investors are keeping an eye on several key factors:

He’ll also take a fun look at historical tidbits to help you appreciate the dynamics of the game.

 

  1. The potential earnings route as we head into 2024 as fourth-quarter earnings season winds down;
  2. Whether equities can continue to move the chains forward;
  3. Fed moves, as they look set to cut interest rates as they appear to have blocked inflation;
  4. If the tech-related sectors can score again this year.
  5. Watch Recording

Market Update Video - February 1st, 2024

Timothy Davis of Davis Executive Wealth Management and Gregg Cohen President of Campus Bound discussion on how to bring down the cost of college regardless of your eligibility for financial aid. Areas covered will include:

  • Planning considerations as you approach the college years
  • Maximizing merit and need-based scholarships
  • Explaining Important changes to the new financial aid formula
  • Review of the best ways to pay for college

 

Watch Recording

Market Update Video - March 13, 2023

Tim talks about the what is going on with the market and what to expect in the future.

Watch Recording

Davis Executive Wealth Management Call Featuring: Kevin Simpson CIO at Capital Wealth Planning

Recording of our call with Kevin Simpson Co-founder and Chief Investment Officer of Capital Wealth Plan-ning, LLC. Kevin and I will be discussing Capital Wealth’s look back on 2022, what went right and what went wrong. Most importantly, we will be looking forward in to the investment climate for 2023 and the path to investment success.

Watch Recording

Landing Scenarios - February 2023

Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.

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