facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Recap | Week Ahead | "The Places You'll Go" Thumbnail

Recap | Week Ahead | "The Places You'll Go"

On and on you will hike.  And I know you’ll hike far and face up to your problems whatever they are.”  - Dr. Seuss: Oh, the Places You’ll Go

Last week's market recap: 

  • The S&P 500 closed the week up 1.64%.  Year-to-date the index is up 7.86%
  • NASDAQ closed the week up 3.33%.  YTD the index is up 14.77%
  • U.S. Aggregate Bond index was up .03% for the week.  YTD the index is up 3.02%
  • 10-Year Treasury Rate increased a basis point, ending the week at 3.53% up from 3.52% the prior week.
    • Fed Funds Target rate is 4.75%
  • The 1-Year Treasury is yielding 4.87%
  • A 6 Month Treasury is yielding 4.86%  
    • The 9 month Treasury has a higher yield vs the 1 year Treasury bond and beyond.  This is the bond market telling the Fed, “The economy is not strong enough to sustain these higher rates much longer.”
    • If your savings account is still under 1%, you should probably find a new savings account.  

The week ahead:  

  • Earnings season continues: Disney, PepsiCo, Paypal, Uber, Toyota, etc.
  • Fed Chair, Jerome Powell will be speaking at the Washington Economic Club
  • Consumer Sentiment Index


Last Week the Federal Reserve hiked interest rates by .25%.   

This was the Fed’s eighth rate hike in a row, but it’s smallest since last March.  Chairman Powell declared, “the disinflationary process has started.”  The drop in inflation over the past three months allowed the Fed to slow their tightening.

While Powell acknowledged there was still more work for the Fed, and there are probably more hikes to come – in March and maybe even May – they are getting close to their stated target interest rate of 5% to 5.5%. 

The terminal rate seems to be within reach.   

The light at the end of the tunnel is looking a bit brighter.  Both stocks and bonds reacted positively to the news, adding to the strong performance that stocks have seen since the start of the year.

Does this mean the bear market is over?  

It’s too early to say.  Corporate earnings are down, and the yield curve remains inverted.  These are signs of a pending recession, but the job market is strong.  Chairman Powell believes growth will slow, and we’ll avoid recession.  Many economists disagree with Jerome Powell.  If we do go into a recession, it will be the most anticipated recession of all-time.  

Isn’t a slowdown already priced into the market?   

Economic growth estimates and corporate earnings projections have been lowered.  The bar has been low for companies to meet or exceed expectations.  Stocks are forward-looking and they seem to be looking past the effects of rate hikes.   Is it possible that Powell may successfully orchestrate a “soft landing”?  The Bond Market doesn’t think so.  The Bond Market’s inverted yield curve is basically saying…

Rate hikes take time to work through the economy and the Fed may eventually “face problems whatever they are.”   


Jerome Powell and the Bond Market disagree.  They can’t both be right.  The silver lining is you don’t need to pick a side.  Diversification should help portfolios in 2023. Fixed Income yields are attractive.  This should provide a solid foundation for diversified portfolios going forward.

Source: CME Group

The picture above is showing... The CME Group's Fed Fund Tracker is showing a 93.7% chance of another 25bp rate hike in March.

2023 Financial Planning Notes: 

  • Later age for RMDs
  • Bigger contribution limits on retirement accounts
  • Higher income limit for Roth IRA contributions
  • Increased Standard Deductions
  • Higher Marginal Tax Bracket Thresholds
  • 529 rollovers to Roth IRAs (requirements need to be met)
  • Higher threshold for 0% long-term capital gains

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® 

* https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

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.