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Market Commentary: Fed Poised to Raise Rates this Week, Could Signal Future Increases

Market Commentary

Market Commentary: Fed Poised to Raise Rates this Week, Could Signal Future Increases

Inflation continued to bound higher last month. The Consumer Price Index (CPI) climbed 0.8% last month and is 7.9% higher than one year ago. The big culprits were food and energy. Food prices leapt 1% last month and gasoline prices increased 6.6% as part of an increase in overall energy prices of 3.5%. Core CPI increased 0.5% as the big increases in food and energy are omitted from core inflation. Car prices, which have contributed to inflationary pressures, were flat last month. Increased rent costs, which are applied to homeowners as well, were a top contributor to inflation.

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Market Commentary: Risk of Expanded Russian Conflict Pushes Markets Lower; US Economy Adds 678,000 Jobs

Market Commentary

Market Commentary: Risk of Expanded Russian Conflict Pushes Markets Lower; US Economy Adds 678,000 Jobs

Concerns the Russian invasion of Ukraine will draw more countries into the conflict raised risk and pushed global markets lower. Statements about nuclear forces going on alert and world leaders discussing a no-fly zone concerned investors.

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Market Commentary: U.S. Markets Rally But Face Uncertainty Amid Russia-Ukraine Conflict

Market Commentary

Market Commentary: U.S. Markets Rally But Face Uncertainty Amid Russia-Ukraine Conflict

U.S. stocks rallied after Russia invaded Ukraine on Thursday. The news that the initial sanctions wouldn’t target Russian energy exports to Europe reduced concerns about a European economic slowdown. While global markets declined last week, the U.S. finished higher even though the S&P 500 moved by more than 1% on all four trading days.

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Market Commentary: How Russia’s Invasion of Ukraine Could Impact Markets, and How Investors Should Respond

Market Commentary

Market Commentary: How Russia’s Invasion of Ukraine Could Impact Markets, and How Investors Should Respond

Russia’s invasion of Ukraine on February 24 has pushed the S&P 500 into a deeper decline. Stocks had already fallen more than 10% in anticipation of the attack and concerns over inflation and higher interest rates. When the invasion proved to be on the aggressive end of expectations, markets initially fell even further.

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Market Commentary: Russia-Ukraine Tensions, Inflation Among Contributors to Market Volatility After Relatively Calm 2021

Market Commentary

Market Commentary: Russia-Ukraine Tensions, Inflation Among Contributors to Market Volatility After Relatively Calm 2021

Market uncertainty on multiple fronts is making it tough for investors. Russia’s ambitions in Ukraine, inflation, and some upheaval in individual securities are making it more challenging to bear risk than last year. 2021 was relatively calm, with only 80% as many 1% daily moves in the market as normal, and many of those were upswings. Who doesn’t love a 1% jump?

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Market Commentary: Inflation, Potential Rate Hikes, Russia-Ukraine Tensions Weigh Heavily on Markets

Market Commentary

Market Commentary: Inflation, Potential Rate Hikes, Russia-Ukraine Tensions Weigh Heavily on Markets

Inflation continues to move sharply higher. The Consumer Price Index (CPI) rose 0.6% last month and is up 7.5% in the last 12 months. The annual gain is the highest since February 1982. Big gains in energy and food helped fuel the outsized price hikes. Core CPI, which excludes food and energy, increased 0.6% as well.

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Market Commentary: Data Revisions Show Surging Jobs Market, Though Nearly 11 Million Openings Remain

Market Commentary

Market Commentary: Data Revisions Show Surging Jobs Market, Though Nearly 11 Million Openings Remain

 The U.S. jobs market provided most of the major economic news last week. The latest establishment survey estimated 467,000 jobs were added in January. Regular revisions in the most recent months added an additional 709,000 jobs. The job market appears stronger than expected.

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Market Commentary: Equity Markets Experience Another Volatile Week; Fed Signals Interest Rate Hike in Early March

Market Commentary

Market Commentary: Equity Markets Experience Another Volatile Week; Fed Signals Interest Rate Hike in Early March

Equity markets wrapped up a volatile week with a late-Friday surge that pushed the S&P 500 to a 0.8% gain. Each day last week experienced a swing of at least 2.25%. Ongoing concerns about interest rates, inflation, valuations, and geopolitical challenges are contributing to swings in the market.

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Market Commentary: Housing, Equity Markets Decline with Fed Expected to Hike Interest Rates

Market Commentary

Market Commentary: Housing, Equity Markets Decline with Fed Expected to Hike Interest Rates

Equity markets have given back some of last year’s gains. Higher interest rates appear to be the major cause. As the Federal Reserve prepares for its first meeting of the year, investors have raised the odds of four interest rate hikes to approximately 70% from less than 30% one month ago (Figure 1). Fed Chair Jerome Powell’s press conference after the meeting will likely be scrutinized for further guidance concerning interest rates.

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Market Commentary: U.S. Inflation Challenges Likely Linked to Robust Government Aid, Policy Changes

Market Commentary

Market Commentary: U.S. Inflation Challenges Likely Linked to Robust Government Aid, Policy Changes

Inflation remains a challenge to the U.S. economy. CPI rose 0.5% in December and surged 7.1% during the last year. It wasn’t all food and energy prices. Core inflation, which excludes those more volatile elements, increased 0.5% as well. As the bright blue line in Figure 1 shows, inflation has reaccelerated after dipping in the third quarter.

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