Recap | Week Ahead | Pivot Party
I like large parties. They’re so intimate. At small parties there isn’t any privacy.” - F. Scott Fitzgerald - The Great Gatsby
Last week's market recap:
- The S&P 500 closed the week up 2.53%. Year-to-date the index is up 24.89%
- NASDAQ closed the week up 2.86%. YTD the index is up 42.70%
- U.S. Aggregate Bond index was up 2.16%. YTD the index is up 4.88%
- 10-Year Treasury Rate decreased sharply, ending the week at 3.91% down from 4.23% the prior week
- Fed Funds Target rate remains at 5.25-5.50%
- The 1-Year Treasury is yielding 4.97%
- A 6 Month Treasury is yielding 5.34%
- The bond market is expecting rate cuts to occur in 2024.
The week ahead:
- Q3 Real GDP
- Housing Data
- Corporate Earnings: Nike, FedEx, CarMax, etc.
- PCE (Inflation Date)
Quick Comments:
Last week, the Fed hinted at rate cuts and financial markets partied. Small caps ripped. The Dow is at an all-time high. S&P increased sharply. The Nasdaq popped. Bonds rallied. Wall St is feeling good going into year end, but there is a lot going on within this big party…
- The futures market is pricing in 1.75% of rate cuts in 2024. That seems aggressive. How will markets react if we don’t get as many cuts?
- The futures market has also increased the odds of a rate hike in 2024! So if/when we get rate cuts, the odds of hikes may actually increase.
- Even though inflation data is easing, is it too soon to claim victory on inflation?
- Did equities just pull forward 2024 returns? The S&P 500 is up over 15% in the past 6 weeks! Long term bond (TLT) is up over 21% in the past 6 weeks!
- Oil has been lower. This feels good at the pump, but is this a sign of global economic slowing?
We’re happy with the recent rally. Markets seem to be normalizing. Bonds have real yields. Cash may no longer be king. Equity leadership seems to be broadening. We’re closer to good news being good news.
Source: Blackrock – Student of the Market
As always, let us know if you have any questions.
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®
Phillip Tompkins, CFP®
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CRA Financial, LLC [“CRA]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CRA. Please remember to contact CRA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. CRA is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of CRA’s current written Disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.crafinancial.com. Please Note: If you are a CRA client, please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results. It should not be assumed that your CRA account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your CRA accounts; and, (3) a description of each comparative benchmark/index is available upon request.
Please Note: Limitations: Neither rankings and/or recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree, or license, or any amount of prior experience or success, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if CRA is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (to the extent applicable). Unless expressly indicated to the contrary, CRA did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of CRA by any of its clients. ANY QUESTIONS: CRA’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including the criteria used for any reflected ranking.