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.”
As we move further into 2024, the commercial real estate (CRE) market continues to attract investors’ attention. Often, when the Federal Reserve increases short-term interest rates rapidly, as in this cycle, some aspect of the capital markets or asset class breaks. CRE is the primary suspect for a crisis in this cycle.
During the decade I spent in San Francisco, I had the pleasure of working with a great economist and investor from 2015 to 2019. Those years proved formative for my investing career, and I learned much from my time there. Recently, I have been reminded of an adage of his. After a short period of strong performance, he would exclaim, “We had a good year this month!”, meaning the portfolio returned what we considered a good year's worth of returns in a fraction of the time. Given the robust performance of the stock market over the last several months, I have been reminded of this saying more than a few times.
Would you have believed us if we had told you on January 1 that the S&P 500 would be up nearly 10% year-to-date after last year’s 25% jump?
This week investors shrugged off hotter-than-expected inflation data, one of the most important data inputs for the Fed in deciding its next policy moves. The impact of the Fed aggressively raising rates over the past year has brought inflation down from a whopping 9% in June 2022 to 3% by the end of 2023. The Fed’s ultimate target is 2%. Much like updating a computer, the last bit sometimes takes the longest.
Over the last month, the term Shrinkflation has become more popular in the media. The term was broached by President Biden during a Super Bowl interview earlier this year, but has been gaining traction more recently (see chart below on Google search trends) due to a proposed bill in Congress, as well as Sesame Street’s Cookie Monster complaining on X (formerly Twitter).
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.
