George Hosfield, CFA, discusses Ferguson Wellman's quarterly strategy titled, "Inflation's Flame Flickers," which addresses the narrow market leadership, the impact of higher interest rates on inflation and how assets are priced at this stage of the economic cycle.
George Hosfield, CFA, discusses the firm's quarterly strategy titled "Stalemate," which highlights the Fed's ongoing battle to tame inflation along with our views on the health of the banking industry and capital market expectations for the balance of the year.
Director and Chief Investment Officer George Hosfield, CFA, discusses the Fed raising interest rates, peaking inflation and our view on equities and volatility across all asset classes in our Investment Strategy titled, “Balancing Act.”
By March, our feelings of excitement for a new year have generally worn off and we have settled into our winter routines. The hope of an early spring and longer days are normally what carries us through the season, but this year, more excitement is brewing.
The most prominent news for the markets this week came from semiconductor company Nvidia, as they announced their most recent earnings. Nvidia is at the tip of the spear for the excitement surrounding artificial intelligence investing. The company’s dominant market share in the chips used to train artificial intelligence models and build out artificial intelligence infrastructure has driven exorbitant growth for the company in the last couple of years.
Over the last two months, our investment team has been privileged to meet with many of our clients and professional partners as we’ve delivered our annual Investment Outlook presentation.
Over the last several weeks, company layoffs have been in the headlines, specifically in the technology sector.
It was an action-packed week in the capital markets headlined by the Federal Reserve’s first meeting of 2024. The central bank decided to leave their benchmark interest rate unchanged at a 23-year high – a level at which it has been since July of last year.
Remember "2023: The Year of the Hard Landing"? That was the dreary refrain echoing through late 2022, with recession fears dominating headlines and investment strategies. Fast forward to today, and the picture couldn't be more different.
The final data points of 2023 are trickling in, and investors are using this information to inform their opinions on what is expected in 2024. Starting this month, we have begun to share our 2024 Investment Outlook with clients and professional partners – we look forward to having the opportunity to be together and celebrate what’s to come.
One irony from the bond market in 2023 was that the year started with near unanimous calls for a recession, finished with an over 20% return for the S&P500 and consensus for a soft landing, yet the yield on the benchmark 10-year U.S. Treasury ended the year right where it started at 3.88%.
All investor eyes were on the jobs report today and per usual, the economic data did—and did not—disappoint. The most recent report outpaced expectations, with 216,000 more jobs created in December compared to the estimate of 170,000.
As we wrap up 2023, we always like to look back on the year in the markets and put the last 12 months in perspective. In December 2022, the S&P 500 had just finished an 8% rally from the October lows. With stocks still down close to 20% for the year, the outlook for 2023 looked bleak as forecasts by economists were overwhelmingly skewed toward recession.
The Santa Claus Rally arrived early this year as investors’ wish for a pivot in Federal Reserve policy appears to be all but granted. After peaking at 9.1% in June of 2022, inflation, as measured by the Consumer Price Index (CPI), now stands at 3.1% with increases in the price of gasoline, apparel and food materially lower.
It’s the holidays; for many, it is a time to reconnect with loved ones, share meals, exchange gifts and create memories that will last a lifetime. For those of us in the investment industry, it also means our news feed will be inundated with every research analyst, economist, strategist and personality on CNBC making predictions for the year ahead.
In recent months, we have received a number of questions from clients regarding the possibility of another housing crisis. While we do not see a housing crash like the one experienced in 2008, there is a different type of disruption in the residential real estate market.
On December 1, we gather as a firm to commemorate and pay homage to the founders of Ferguson Wellman. We reflect on those who came before us and celebrate our shared vision for the future – we cherish this tradition and look forward to it every year. Traditions like this are an integral part of the holiday season, which officially kicked off with the year’s busiest shopping weekend. The number of Black Friday and Cyber Monday commercials, promotions and emails were staggering, but did consumers take the bait?
The holiday-shortened week was chock full of drama … all centered around both the market’s current mania (artificial intelligence) and the market’s favorite pandemic era mania (cryptocurrency). A strong third quarter earnings season, favorable inflation data and a moderation of long-term interest rates have all contributed to a stellar month for the stock market which is now within 5% of its all-time high, which was reached in December 2021. We will all be giving thanks if recent momentum continues into the end of the year.
Further evidence of slowing inflation amid moderating retail sales lent additional credence to the economic soft landing narrative this week, exactly 18 months after the Federal Reserve began raising interest rates to combat high prices. Meanwhile, retailers book-ended third quarter earnings season in generally encouraging fashion, putting finishing touches on a surprisingly upbeat reporting period that now tallies positive revenue growth for the S&P 500 and over 6% earnings per share expansion.
As we enter the final stretch of the college football season, the quote, “Not so fast, my friend,” from ESPN’s College GameDay analyst Lee Corso, accurately captures the week’s capital markets events. After a weaker-than-expected October jobs report and the U.S. Federal Reserve leaving rates unchanged, investors are confident the Fed is done raising interest rates and have quickly shifted their sights to the first rate cut.
This past week’s plethora of economic and market-moving data, especially regarding interest rates, has served to highlight the sometimes-conflicting forces at work in the U.S. economy. While the Federal Reserve maintained their interest rate policy at 22-year highs on Wednesday, we also learned the U.S. government’s budget deficit grew to nearly $2 trillion in their most recent fiscal year.
Spooky season was in full force this week with contradictory messages from the economy versus the stock market. The week was chock-full of news with over 40% of the S&P 500 market capitalization reporting third quarter earnings, the release of third quarter economic growth, and finally, fresh data on the Fed’s preferred measure of inflation, the Personal Consumption Expenditure Index.
The 10-year U.S. Treasury touched 5% earlier this week, the first time since 2007. By the end of the week, yields had settled at 4.9%, representing a significant increase from the rates of 3.7% on January 1. In the world of “bond math,” bond values fall when rates rise. Therefore, bond returns, as measured by the Bloomberg Aggregate Index, are down over 3% this year.
