Timely Financial News continued...
So, it must be maddening for market prognosticators to watch stocks and bonds climb the wall of worry fueling the fear of missing out (FOMO). The widening gap between financial assets’ performance and underlying risks underscores the notion that the economy is not the market and vice versa. Broadly, investors are on edge — eager to protect their unexpected gains. According to Strategas Research Partners, there has never been a market bottom before a recession began, further fueling investors’ anxiety. Investors anxiously await the recession that may or may not arrive this year. Most economists expect a recession in the next 12–18 months, although we heard this prediction over a year ago. Investors crave clarity regarding its timing and severity; however, until the resilient consumer and strong labor market falter, investors will likely have to wait longer for the anticipated recession. Knowing that recessions are a normal economic occurrence, How deep or mild will the recession be? is the day’s question. Outside of another external shock (the current banking crisis seemed to come out of nowhere), we side with a mild recession and soft landing by the Fed. As of this writing, the S&P 500 has finally meaningfully broken through the 4,200 level. So, what will it take for the index to continue the rally in risk assets? A definitive end to the Fed’s tightening cycle could help. The Fed is in a difficult position, and investors are uncertain about the future path of monetary policy. Inflation remains significantly above the Fed’s target, and the labor market has not been this strong in more than 50 years. This would suggest the Fed should keep raising rates. But, the regional banking crisis combined with Fed officials’ words and actions has investors convinced the tightening cycle is over. Historically, risk assets perform reasonably well during the monetary policy transition period between the last rate hike and the first rate cut.
That may reflect the current investment environment. But be wary of rate cuts because risk assets (stocks and corporate credit) typically fall when the Fed starts cutting. After all, the Fed is lowering rates for a reason — usually in response to a recession or capital market breakdown. Gaining insight into the direction of monetary policy will be vital to extend the market breakthrough. The good news is that the picture should become more apparent in mid–June at the next Fed meeting. Finally, the agreement to raise the debt ceiling was vital to continuing this year’s rally. Clarity on the timing and severity of recession and insight into the direction of future monetary policy will hopefully result in more stocks participating in this year’s rally — enabling the continuation of the secular bull market that began in 2009. As of this writing, the S&P 500 has advanced over 20 percent from the October 2022 market low, which by definition, is the end of the S&P 500 bear market.
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Elder Financial Abuse: How to Recognize It and Warning Signs to Look for
Kelli Maxwell Communications and Marketing Manager
According to the National Council on Aging, 1 in 10 Americans aged 60-plus has experienced some type of elder abuse, and one of the most frequent forms of abuse is financial. This type of abuse is so common that the number of seniors in the United States who have experienced financial abuse is estimated to be as high as 37 percent. To look at things
objectively, if you have three living grandparents or two living elderly parents, there is a chance that at least one of them has been a victim of financial abuse and likely not even know it. To recognize the signs of elder financial abuse, you must first understand what it is. The Older Americans Act of 2006 defines elder financial abuse
06/09/2023 Past performance is not a reliable indicator of future performance. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss, and the reinvestment of dividends and other income as applicable. Sources
1 Bloomberg, as of May 18, 2023 2 Bloomberg, as of May 18, 2023 3 Bloomberg, as of May 18, 2023
6 PERSPECTIVE Summer 2023
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