What a ride…what a ride…what a ride! July was all over the map with an all-time high, then retreating almost 5%, then jumping a couple percent at the end of the month. We’re still seeing the Fed’s interest rate policy move the markets a bit, just like we saw on July 31st. However, we are starting to see some major volatility on actual economic news (not just interest rate policy). What are those factors?
- Jobless claims – We’re at the highest level in a year for people filing unemployment benefits.
- Unemployment is up – We’re now at 4.3% in July which is higher than the expected consensus of 4.1%.
- Inflation is still sticky – Sticky, yes, but perhaps slowing. The downside is that if inflation falls too fast, then that would mean the economy is tanking. The upside to a down economy is most likely major interest rate cuts. It’s the ultimate economic double-edged sword.
- GDP was outstanding – It will be interesting to see which cracks turn into canyons for particular industries or companies. This is why having a diverse portfolio is key.
Now what do we do with all this information? We read it, understand a talking point here and there, then go on with our days. Whether you’re retired, near retirement or still plugging away for years, it’s important to remember that we can’t get too hyped up about quarterly news cycles. Think about where you were 10 years ago. Could you imagine if you would have stopped investing then?
I can’t believe it is August already. I’ll leave you with a funny meme I saw online that I can’t find any more (of course), but here’s what it said the year was like:
Jaannnnnnnnnuary, Februaaaaaaaaary, Maaaaaaarch, Appppril, May-July, today. 😊
You are very much an appreciated client! We couldn’t be here without you.
Larry Mroczkowski
President
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.