From the desks of Stanley Katz & Lauren Madera
STAY SAFE AND HEALTHY!
When there are more than two data points, it may indicate a trend! For the past three weeks (and a fourth for the DJIA), the US stock market indices have posted losses (i.e., this past week: DJIA -1.85%, S&P 500 -2.75%, Nasdaq -3.83%). Year-to-date results reflect the US stock market indices in correction territory of -6.95%, -10.37%, -17.93%, respectively. Most stock market pundits blame rising interest rates in the wake of the Federal Reserve’s efforts to combat inflation. At Friday’s close, the 2-year US Treasury (UST) yielded 2.713% with the 10-year UST at 2.905%. As interest rates on UST’s (so called “safe money”) approach or exceed the yield on the S&P 500, there may be a point where dollars flow out of stocks. For more on this, click the James Investment Economic Outlook link below.
However, rising interest rates and inflation don’t necessarily spell disaster for stocks. We just haven’t seen this movie for quite some time—like 40 years! Generally speaking, the initial shock of the stock market retreating feels terrible, but opportunities surface and these are the times to take advantage of them. Take a look at Capitol Group’s “Rotating into dividends in an inflationary world” research piece below.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
James Investment:
Capital Group:
BlackRock:
J.P. Morgan Asset Management:
Alta:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
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