Consumer Spending: Are Consumers Tapped Out or Pushing Back?
Key Summary:
Sentiment towards the consumer and spending is about as negative as I’ve seen.
Assets...
For a long time, the 60/40 portfolio was the cornerstone of financial planning for advisors. This simple strategy, allocating 60% to stocks and 40% to bonds, offered a balance between growth potential and stability. However, recent market trends are challenging the effectiveness of this traditional approach.
Key Summary:
Conventional wisdom states that stocks generally struggle in periods of higher rates.
Fact: stocks generally perform above long-term averages in higher for...
Watch Joe Tigay and Brian Stutland, co- portfolio managers of a hedged-equity strategy for Catalyst Funds, discuss the latest in Volatility, Nvidia, CPI and Yields, and much more in the latest edition of Market Matters.
Investors seeking clarity on the future path of inflation and interest rates struggled to find it in March as key economic indictors sent mixed signals. The month kicked off with a strong February jobs report, with the Labor Department reporting that nonfarm payrolls increased by 275,000 for the month (against expectations of 198,000). While the February numbers suggested the economy continues to run hot, downward revisions to the December and January reports reduced the initial estimates for those months by 167,000 jobs and the unemployment rate rose from 3.7% to 3.9% in February.
Very Important thesis: If equities generate roughly 8-10% a year over time, leading brands serving the dominant driver of the economy, in theory, should compound at 13%+ over time. We have significant proof on this topic below. For a variety of reasons, the last few years has been difficult for the average stock. Betting against consumption-focused stocks after a below-average 3 years has been a poor investment decision. History is very clear on this topic.
Market Matters Presented by Miax Exchange group. Options pros Joe Tigay and Brian Stutland talk about the weeks news, the bubble forming in AI, and trade earnings in CRWD Crowdstrike.
Remember, our investment in stocks is a De facto vote of confidence on the economies in which we invest. Earnings, revenue, margins, free cash flow, and the growth of these important metrics is what drives stocks up or down over time.
The discretionary sector struggled as did all growth and quality-oriented areas of the market in 2022. That was a classic re-set and a raging opportunity to add exposure.
The Institute for Supply Management’s monthly survey of purchasing managers came in below expectations for August, while the Bureau of Labor Statistics jobs report indicated that nonfarm payrolls expanded by only 142,000 jobs during the month (against expectations of 161,000 jobs).
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