Market Recap and The Week Ahead | RIP TINA

CLEARLY, adv. Unclearly
Analysts and pundits using the word “clearly” are either (1) pretending, without any evidence, that they know what is going to happen, or (2) describing what already happened and declaring, after the fact, that they knew it would happen when at the time they had no idea (see HINDSIGHT BIAS)” - The Devil’s Financial Dictionary, Jason Zweig

Last week's market recap:

The S&P 500 was down -4.73% for the week. Year-to-date the index is down -17.80%.

Large-Cap Value leads performance YTD at -10.98%

NASDAQ closed the week down 5.46% and is down -26.40% YTD.
10-Year Treasury Rate increased, ending the week at 3.45% from 3.33% the prior week.
- Fed Funds Target rate is 2.50%
The 1-Year Treasury is yielding 4.03%
A 6 Month Treasury is yielding 3.86%
- What is your savings account rate? If it didn’t increase recently, you may want to find a new savings account.

The week ahead:

Housing Data
Fed Meeting

Quick Comments:

Last week’s inflation data came in hotter than expected, especially in shelter inflation. Now the Fed is expected to be more aggressive and raise rates even higher. The terminal rate is now estimated to be around 4.25%. Recession risks have increased with expectations of a more aggressive Fed.

For investors; however, the silver lining is over time, it could result in a return to the slow-growth, low-inflation, low-interest rate environment that has supported both the bond and stock markets for many years.

Anxiety triggered by real global problems is being amplified by cable channels and social media outlets. They attract viewers by appealing to fear and outrage. Something that isn’t being amplified… TINA (There is no alternative) to stocks is over! The 1 year treasury is yielding 4.03%, and many other bonds are showing attractive yields. There is an alternative to stocks! This is a step in the right direction. Let’s see what the Fed says this week and dismiss any talking heads using the word “clearly.”

Source: BLS, J.P. Morgan Asset Management

Don’t lose sight of your long term goals!

Short term volatility vs long term past performance:

S&P 500 Performance over the past 3 months:

S&P 500 performance during the past 20 years:

Please reach out to us to discuss in more detail.

Best,

CRA Investment Committee

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP®

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP®

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