🎙️"The markets are definitely digesting the fact that the Fed DID NOT raise rates, and some performance figures are actually a little bit higher....."
🎯 Find out what's happening in the financial markets from Laurence Hale, AAMS®, CRPS® and how that may impact your finances. ➡️
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Welcome to the monthly market update on You and Your Money. Empowering you to reach your goals with tips and insights to help you Plan Well, Invest Well and Live Well. This month's market update comes from Laurence Hale, principal, managing partner and chief investment officer of Weiss, Hale and Zahansky Strategic Wealth Advisors. Take it away, Laurence. Give us our usual start to the program, the latest news from the financial markets. Well, the markets are definitely digesting the fact that the Fed did not raise rates yesterday and some performance figures through the end of last week, which after the yesterday are actually a little bit higher. Definitely some uneven performance in the equity or stock market with the S&P 500 posting through the end of Friday, up 8.66%. Big difference compared to the Dow. The Dow Jones Industrial average down actually 0.5%. And big difference between growth and value. Those are two different investment strategies when you're looking at buying stocks. The Russell 1000 growth up a whopping 21% year to date whereas value the kind of the winning strategy last year out of the two actually down 3.66 and international markets with the MSCI EPA up about 3%. You know the when you talk with someone about how their portfolio is doing and the fact that, you know, they've had a good year or a bad year or somewhere in between in stock performance, it really, really makes a difference if you're diverse and or what you own because there has not been even performance. Broadening that out a little bit. Bonds down about two and a half percent. Despite the higher rate environment through the end of Friday as the U.S. Bloomberg Aggregate Index. And to give you some perspective on some other rates that consumers are used to looking at nationally, a CD rate, six month CD rate is about 2.19% versus it at Treasury at a two year Treasury over 5%. And those of you that are borrowing money on the on the individual side, a 30 year fixed rate mortgage, the national average is about 7.9%. And the prime rate, which is a rate that is usually a base rate for a lot of commercial lending and so forth, is what is all the way up to eight and a half percent. So we're going to be talking about rates. That gives some people a little perspective on where rates actually sit right now. Well, Laurence, with all the spikes in the interest rate there's been in the last year or two for the Fed to keep the rate unchanged, that surprised you yesterday? Not necessarily. You know, we were anticipating at least a pause. There's definitely some question whether or not rates will be raised one, possibly two more times during this rate hiking cycle. A lot of it depends on inflation, which we'll be talking about more. And you know, how the economy is doing. Know the dual mandates the Fed has is full employment and keeping inflation under control. And I think they're feeling a little bit more comfortable with where inflation is trending down. And, you know, the economy and particularly employment is actually good. So we're not surprised. But I think their rhetoric, their you know, their tone is going to continue to be a bit hawkish, a bit aggressive to make sure that inflation gets under control. And extending that to the future. The Fed chair, Jerome Powell, yesterday hedged on the possible end of a tightening campaign. Do you anticipate going forward that this might be a sign of the future, that we keep things stationary and not more spikes? I think they can do a lot with just the language that they use and keeping people guessing whether or not they're going to raise rates or not is going to keep people cautious. And, you know, part of the rationale with raising rates is the fact that that will slow the economy down and temper inflation pressures. And, you know, they want to make sure they've got a good handle on that. We've been through sort of a wild ride when it comes to inflation and rates and the economy in general over the last 3 to 4 years. And I think, you know, the Fed is sort of hell bent on making sure inflation is is tame. People that aren't borrowing or are buying when they hear this news about the Fed increasing rates or yesterday's news about not increasing the rate, how does that affect the average guy on the street? Is it a big deal for average Joe? It is. You know, it is. The upward trend definitely is directed anything from fixed income products causing rates to surge across the board. You know, you think banks are if you're an investor or a saver. I in particular, they're now offering consumers notably higher interest rates, which is beneficial for those individuals. But that's definitely made it more challenging for borrowers. So those rates in the mortgage rates, prime rate, those are difficult for those needing to borrow money, whether they're buying a house, a car or financing a business. That's it for today. Thanks for listening to You and Your Money. Find even more episodes, videos and other resources at our web. whzwealth.com. Be sure to come back next week for more tips to help you live fearlessly and pursue your financial and life goals. Until then, live well. Weiss, Hale and Zahansky Strategic Wealth Advisors offer securities and advisory services through Commonwealth Financial Network member FINRA/SIPC a registered Investment advisor. Fixed insurance products and services offered through CES Insurance Agency. They practice at 697 Pomfret Street. Pomfret Center, Connecticut 06259 and can be reached at 860-928-2341. Weiss, Hale and Zahansky Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strive to support clients in achieving their financial life goals. For more information regarding wealth management and customize financial planning with Weiss, hale and Zahansky Strategic Wealth Advisors, please visit, www.whzwealth.com.