From the desks of Stanley Katz & Lauren Madera
STAY SAFE & HEALTHY!
All three major US stock market indices posted gains for the four-day holiday week (i.e., DJIA: +2.02%, S&P 500: +1.83%, Nasdaq +2.04%). As is the case in much of life, there is good news, and there is bad news. The debt ceiling deal signed into law on Friday night provided a sigh of relief to the US stock and bond markets. Alongside that event, employment figures and a subsiding inflation report boosted markets throughout Friday’s session.
Now for the bad news. Although inflation seems to be abating (down to 4% annual), we’re still above the Federal Reserve’s target of 2%. In addition, the US Treasury must replenish its depleted cash reserves by selling US Treasury securities. By selling bills, notes and bonds, investors should receive higher interest on those investments. Take a shallow dive into this topic by clicking the J.P. Morgan Asset Management link below.
When interest rates are higher on US Treasuries, investors may consider selling stocks and reinvesting proceeds in USTs to capture those higher interest rates. As stated in recent H&Cs, the US stock market year-to-date has been driven up mostly by the large tech names (like MSFT, AAPL, NVDA, META, AMZN). Read the Schwab commentary below titled, “Total Concentration: Mega Caps Reign.” It has some very interesting insights.
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.
J.P. Morgan Asset Management:
James Investment Research:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
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