Market Update – November 2023
As a follow-up to our last monthly newsletter and based on (always highly valued) feedback, (we state for the record that) it is certainly the case that there are many types of pumpkin spice enthusiasts and by no means are all “giddy,” as referenced in our last letter. Rather, it is the U.S. stock market to be reported on, having entered a “correction” in one of the final trading sessions in the month of October.
Market Update – October 2023
Spend baby spend! That was the message from the U.S. government to its constituent consumers during the three-year pandemic recovery, with multiple rounds of helicopter stimulus checks and economic relief programs dropped in their laps. And spend they did, creating a hard-to-break habit in the process.
Market Update – September 2023
September means back to school for many families, whether it be children or grandchildren at various points in their primary or secondary educations or for some, a time to face the soaring costs of a college education. With even the best laid plans, education costs have continued to skyrocket at higher than anticipated levels over the past several years and can be daunting when their impact on personal budgets is realized.
Market Update – August 2023
The summer blockbuster movie Barbie has quickly made its way into an elite group of only six film productions in the post pandemic world, with over a billion dollars in global receipts. The slope of a ticket sales chart is steeper than even the red-hot recovery of U.S. equities this calendar year, with no signs of the hype abating.
Market Update – July 2023
There have been an inordinate number of reported black bear sightings in Massachusetts this year. While unusual, the rationale seems to be that bears are known to be a hungry lot and, although they live in the woods, will venture to wherever they have a chance of finding an easy food score. If you happen to see one of our recently popular local black bears, the best advice seems to be to leave it to go about its business, as it should eventually move along. Long-term investors would be well served to heed similar advice. Bear market periods are an occasional occurrence that have historically run their course and been dominated by periods of longer-term bull runs.
Market Update – June 2023
In an episode of The Twilight Zone that initially aired in the 1960s, Rod Serling narrates the story of an elderly resident at a home for the aged who falls on challenging times and longs for the days when all worries and problems would disappear by participating in a childhood game of “Kick the Can”. In the real world, however, such games merely push difficult situations off and postpone tough decisions. No amount of wishing or believing will solve problematic issues like the U.S. debt ceiling.
Market Update – May 2023
April showers may have created a few mud puddles for investors to navigate, but in the end, most should maintain a sunny disposition when reviewing portfolio balances from the end of the month.
Market Update – April 2023
Investor fear tends to cloud judgment during sharp market pullbacks. The anguish of experiencing declining portfolio values can lead nervous investors to feel inclined to “sit things out” for a while, with an intention of “jumping back in” when things settle down. If this feeling should arise, your trusted and experienced account officer at Plimoth Investment Advisors is only a phone call away.
Market Update – March 2023
The Federal Open Market Committee raised short-term rates by 25 basis points last month in the latest move in their fight against sticky inflation. The magnitude of the eighth hike since March, 2022 was less than previous increases in the current monetary tightening cycle.
Market Update – February 2023
Investors in U.S. equities decided to shake it off and found a way to move on from the bleak financial market environment experienced in calendar year 2022, making shares of downtrodden stocks nearly as desirable as tickets for the latest Taylor Swift tour.
Market Update – January 2023
There are ample reasons for an enthusiastic welcome to a new calendar year after a long list of challenges marred 2022. Investors in volatile financial markets may be anxious to put the worst year for U.S. equities since the financial crisis, and one of the worst years ever for bond investors, in the rearview mirror and not look back.
Market Update – December 2022
Fed Chairman Jerome Powell’s comments after the release of the Federal Open Market Committee’s latest meeting minutes, followed by further dovish remarks at the Brookings Institute, made progress toward appeasing the grizzled bears on Wall Street. The majority of Fed officials leaning into the idea of a pause on rate hikes in the new year moved major stock indices further away from recent bear market lows.
Market Update – November 2022
After months of tricky-to-maneuver volatility in the stock market, equity investors were afforded a fall treat just in time to load up on (higher-priced *) Halloween candy. Equity volatility remained above historical long-term averages during the month, but fortunately the rapid move in stock prices in the later part of October was to the upside.
Market Update – October 2022
Avid readers of this newsletter may recall an introduction to the acronym “TINA” (There Is No Alternative), popularized at a time of rock bottom interest rates on fixed income instruments and coined by market pundits to describe the rationale for focusing attention entirely on equity investments. The rapid rise in short-term rates has made “lending” capital (purchasing bonds and other fixed income instruments in return for a set interest payment) both attractive and profitable again. Enter “TARA”, the newest cocktail party acronym… “There is A Reasonable Alternative”.
Market Update – September 2022
Planning a trip to Europe anytime soon? You may find that your dollar stretches further than it has in the past when you exchange your greenbacks for euros. Last month, the U.S. dollar and the euro reached 1:1 parity for the first time since the early days of the euro in 2002.
Market Update – August 2022
It seems that if you aren’t happy with something, you can attempt to simply redefine it. Take the dreaded word “recession” for example. Per the textbooks I studied and with the guidance of my excellent professors, I have always stuck to the basic definition – two consecutive quarters of negative real Gross Domestic Product (GDP). The nuances of labeling the stages of a business cycle, however, are not quite that simple.
Market Update – July 2022
Asked and answered. U.S. stocks closed in a bear market last month, driven down further by fears of sustained inflation, aggressive Fed tightening and economic slowdown. Although it has been a bear of a time for investors for much of this year, it is now official and in the books.
Market Update – June 2022
The Bear, or Not the Bear, that is the Question – As perhaps a Shakespearean soliloquy might ponder… Whether ‘tis nobler in the mind of the investor to suffer the 20% closing decline known as a bear market and move on, by means of slings and arrows in the pursuit of opportunistic fortune, or to merely approach such chasm and never gain the menacing label of sold off markets past?
Market Update – May 2022
I expect some readers will recall an electronic board game called “Operation” from their youth. Despite knowing the artificial “jolt” would eventually come it was uncanny how the human reaction was to jump with each eventual failure. This reaction comes to mind when considering the response of fixed income investors to the first rate hike in the monetary tightening cycle which began in March.
Market Update – April 2022
The Federal Open Market Committee (FOMC) raised short term rates in March for the first time since 2018. Maintaining their proclivity for transparency, they quickly announced expectations for the possibility of six more hikes this calendar year (with the market already pricing in more) to slow the pace of rising inflation.
Market Update – March 2022
Russia’s invasion of Ukraine overshadowed all other news in the final trading week of February. The initial panic selling on Wall Street turned around quickly on the day of the military attack.
Market Update – February 2022
The stock market was incredibly volatile in the first month of 2022, reflecting fears of Fed policy tightening. Higher interest rates meant lower stock prices, as investors able to earn higher yields on risk-free U.S. Treasury bonds were less interested in buying technology stocks with questionable profitability.