"(The Fed is) Navigating by the stars under cloudy skies.” - Jerome Powell: Fed Chairman at the Jackson Hole Symposium in August 2023
Last week's market recap:
- The S&P 500 closed the week down -.12%. Year-to-date the index is up 17.30%
- NASDAQ closed the week down -.37%. YTD the index is up 31.78%
- U.S. Aggregate Bond index was down -.33% for the week. YTD the index is up .26%
- 10-Year Treasury Rate increased, ending the week at 4.33% up from 4.26% the prior week
- Fed Funds Target rate is currently 5.25-5.50%
- The 1-Year Treasury is yielding 5.45%
- A 6 Month Treasury is yielding 5.52%
The week ahead:
- Fed Meeting
- Housing Starts and Permits
- Earnings: FedEx, General Mills, AutoZone
The S&P 500 has been relatively flat since July. U.S Treasuries and Corporate Bond Yields have climbed to 15 year highs. These two data points suggest the realm of extremely low interest rates is probably over for the foreseeable future. Therefore… many are expecting, “Higher for Longer.”
Fed Funds Rate Expectations:
Markets expect the Fed to keep rates unchanged this week. Consumers are resilient but their spending seems to be slowing. Higher oil prices are a concern to the overall economy. The labor market is slowly deteriorating. Utilities have outperformed the S&P 500 this September. Small-Caps have underperformed. This is usually consistent with a growth slowdown. The Fed is “data dependent.” Data continues to dictate the Fed’s decisions. Markets are not expecting a change in the Fed Funds rate this week.
Source: BlackRock Student of the Market: www.blackrock.com/us/financial-professionals/literature/investor-education/student-of-the-market.pdf
As always, let us know if you have any questions.
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®
Phillip Tompkins, CFP®
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