Blue skies turned somewhat turbulent in the third quarter as markets (S&P 500) gave back some of their first half gains (nearly 20%) and are now up 12% as the quarter ended. Most of the volatility was once again the result of the Fed’s future direction of interest rates, which now points to higher rates through the end of 2024. As a result, the 10-year Treasury Bond has increased from 3.25% in March to nearly 4.9% as of 10/6/2023. The 10-year helps determine mortgage rates, bond performance and ultimately stock performance, so this advance is not good for any type of risk asset.  

Please click here to continue reading our market update.

Markets continued their positive performance in the second quarter and the S&P 500 is now up 17% through the first half of the year. Many investors have been caught off guard as the outlook at the beginning of the year was doom and gloom. Cooling inflation, better than expected corporate earnings, and the new AI (Artificial Intelligence) craze have been the obvious drivers of the great start to the year, but as we get longer into this market run up, the question becomes “Is this sustainable”? In order for the answer to be yes, inflation must continue on its downward descent, the Fed has to start talking rate cuts and corporate earnings expectations need to continue to surprise to the upside. In our view, at present, there’s a low probability of all three happening in unison.

Please click here to continue reading our market update.