George Hosfield, CFA, discusses Ferguson Wellman's quarterly strategy titled, "Inflation's Flame Flickers," which addresses the narrow market leadership, the impact of higher interest rates on inflation and how assets are priced at this stage of the economic cycle.
George Hosfield, CFA, discusses the firm's quarterly strategy titled "Stalemate," which highlights the Fed's ongoing battle to tame inflation along with our views on the health of the banking industry and capital market expectations for the balance of the year.
Director and Chief Investment Officer George Hosfield, CFA, discusses the Fed raising interest rates, peaking inflation and our view on equities and volatility across all asset classes in our Investment Strategy titled, “Balancing Act.”
As February draws to a close, so does our first quarter outlook season. We enjoy hitting the road and sharing our 2025 Investment Outlook with clients and colleagues, and are grateful for the chance to come together and look forward to what's ahead.
his week, Oregon residents experienced the first taste of fall. Evenings, once long and balmy, gave way to early, crisp sunsets. Leaves, damp from evening rain and morning dew, began dropping from trees. Pumpkins appeared on porches to greet the trick-or-treaters that would soon walk door-to-door. Lastly, capital markets demonstrated similar signs of change with company earnings announcements and macroeconomic data reports, ending a fairly quiet week by setting the stage for more significant releases of information in the coming weeks and months. Surely, fall is upon us.
Last week, over 28 million unique viewers tuned into the Games of the XXXIII Olympiad opening ceremony in Paris, France, double the combined state populations of Oregon, Washington and Idaho. The ceremony set the stage for the coming weeks of competition and allowed viewers to catch their first glimpses of the best athletes in the world. This week, investors were focused on a different stage: the Federal Open Market Committee (FOMC) press conference, which offered insight into the Fed’s future perspectives on inflation and employment.
A bank failure, a rate hike and a surprisingly strong jobs number all led to volatile equity markets this week, with negative returns led by energy stocks and regional banks. We’ll first discuss the takeover of First Republic bank, then the effect of the Fed’s actions mid-week. Finally, we’ll hit on the employment numbers for April.
“How do you go bankrupt? Two ways. Gradually, then suddenly.” -Ernest Hemingway
As of this writing, there are expectations that First Republic Bank may not survive the weekend. However, we believe that First Republic’s issues are not systemic across the industry. Unlike 2008, these issues with First Republic, as they were with Silicon Valley Bank, are not credit related. Rather, it was the issues that were part of their business model, which played out as Hemingway stated in “The Sun Also Rises.”
Years ago, a market technician compared the markets to a car windshield. In this analogy, an investor is in the driver’s seat looking out for future obstacles or opportunities in the “road” ahead, such as discounting future earnings, economic data or signs of a recession. However, as any good driver knows, the rearview mirror is also in view, giving us a glimpse of what recently passed.
Chief Investment Officer, George Hosfield, CFA, discusses our second quarter Investment Strategy titled, “Kryptonite.”
With an eventful first quarter now in the history books, we can safely say that the elevated levels of volatility that we predicted for 2022 are now in play.
The Federal Reserve has maintained near-zero interest rates for nearly two years, and by now, it is clear this extraordinary policy is no longer needed. Over the last several months, continued elevated inflation readings, coupled with a tightening labor market, have led the Fed to suggest rate hikes are coming both sooner and faster than previously expected.
Federal Reserve Chairman Jerome Powell in testimony to Congress last week said that the increase in Treasury bond yields is a "statement of confidence" in a robust economic outlook.
The rollercoaster ride continued this week as stocks moved at least 2 percent every day; however, with all of that volatility the S&P 500 was up 1 percent.
Federal Reserve Chair Jerome Powell and other members of the rate-setting Federal Open Market Committee (FOMC) have signaled they will be cutting the benchmark federal funds rate at the end of this month. This will be their first interest rate cut since December 2008.
Investors anticipating Fed rate cuts in the months ahead have become inversely sensitized to economic news supporting continued economic expansion. Last week’s surprisingly tepid payroll report and today’s reassuring read on U.S. retail sales resulted in opposing stock price reactions.
While expectations were for the Fed to raise the federal funds rate by 0.25 percent, there was a small glimmer of hope that they may hold pat.
Stocks climbed in the U.S., Asia and Europe as the U.S. government averted a shut down and the jobs report reinforced optimism. The U.S. added 228,000 jobs in the month of November, higher than the expected addition of 195,000 jobs, due to an accelerating hiring trend which economists expect to continue into the next year. The S&P 500 hit new highs today, trading above 2,650.
