So, we just saw the first rate cut since the Fed took an aggressive approach to taming inflation in the spring of 2022. What was it that the Federal Reserve saw that gave them confidence in shifting their approach? Well, if we look where inflation has come down from in the last few years via truflation.com, we have come a long way. The US inflation index now sits at 1.52%, down from 11.5% at the peak of the recent crisis. The Federal Reserve has two key mandates – maximum [...]
We have none. Ah yes, another election year full of divisive, negative, and persuasive rhetoric from folks on both sides of the aisle. We all recognize the importance of such a year and the ability to have a vote in electing our leaders, but we cannot help feeling some level of dread and outright exhaustion as the process plays itself out. I (Ian) am sorry to disappoint you if you were hoping to discover Jim’s, Scott’s, Curt’s, or any of the rest of the team’s political opinions in this article. [...]
Utility investing is typically a straight forward prospect with very little surprises, good or bad. This is why utilities are commonly considered “safe haven investments” by academics and investors when the economy turns South. Revenue and earnings growth are generally predictable and the dividend is generally predictable as a result which typically results in lower stock volatility when economic growth is waning. Artificial Intelligence seems to have changed that narrative, however. Because AI requires extensive computing power, data center demand for utilities throughout the country have increased substantially over the [...]
The title of this newsletter refers to a comedy show which appeared on HBO, Cinemax, or Comedy Central (which are the only venues it could have reached me (Jim) as I’m too cheap to pay for premium TV content not related to sports or home improvement shows!) from 1989 to 1994. For a while, it featured comedian Jon Stewart as host and the show consisted of brief clips from comics and (go figure!) upcoming HBO and Cinemax specials. Admittedly, the title of the show stuck with me far longer than [...]
Welcome to the Monthly Market Update from Signature Wealth Management. I’m Brian Ransom, Research Director from Signature Wealth and here’s what happened in the market this month. Let’s start off with a quick inflation update and how that has affected the markets. We did get a CPI reading for the month of April which came in at 3.4% year/year. This is a very slight drop from March. The market actually took this month over month drop positively. At the very least, inflation isn’t increasing and is holding [...]
Scary tweet, right? This particular tweet from *checks notes* TicTocTick made news on May 7, 2024, caught over 82,000 views, received 526 likes, and was reposted 117 times. What’s really scary about this tweet is it’s not true. From the fact that yield curve didn’t exist in 1929 (not really, anyways) to the false implication that inversion length translates 1:1 to recession strength, this tweet packed in a lot of falsehoods in just a couple sentences. But it is believable enough to scare a lot of people into retweeting, making [...]
Southern Company stock, along with many other utilities, has had a rare, strong rally over the last couple of weeks. Heavy buying in the utilities sector can often be a harbinger for market volatility especially if it comes at the expense of the riskier sectors like consumer discretionary stocks (clothing, vehicles, restaurants, etc.). And that’s pretty much what we’ve seen with the rally beginning April 16. Stocks like LuluLemon, Nike, and Starbucks have sold off while utilities rally in conjunction. Ultimately, this is all short-term noise for Southern shareholders though. [...]
If you’ve been listening to the financial news for the past year, you’ve probably heard many times the phrase “soft landing” when it comes to the Federal Reserves goal of reducing inflation. The Fed set out on a phase of tightening in the spring of 2022 after realizing inflation wasn’t so “transitory.” Those rate increases were very difficult for the stock and bond markets to digest in 2022, but we haven’t seen the broader economic pullback that most economists predicted in 2023/early 2024. A “soft landing” implies a reduction in [...]
Last I (Ian) checked, the year is 2024, not 2022, so why are we still talking about interest rates and inflation? The markets seem to be humming along. Our government keeps publishing GDP numbers that put any inkling of a recession in doubt. Consumers continue to spend their money like they always have. But just as we started popping the champagne on easing inflation and the hopes of interest rate decreases, inflation decided it has some life left in it. January’s CPI report came in hotter than expected, a 3.1% [...]
this year I set out the case for why the American consumer is seeing inflation at the highest levels since the 80’s (see article titled “Kindling for the Inflation Fire”). Fast forward a few months later, and we’re still in a high inflationary environment. But, rather than continue to spend time discussing the cause of inflation or ways the Fed could fight it, I figured it would be worth our time discussing issues we can actually control. So, here is a definitive list of assets and how they behave under [...]