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.”
Last week, the benchmark 10-year U.S. Treasury bond yield reached 4.8%, the highest since June 2007. Bonds reached another milestone last week when the aggregate bond index posted its 38 consecutive monthly drawdown, marking this the longest bond bear market on record. The specific forces pulling the levers of the bond market are numerous, and the math is complex.
“Have you used ChatGPT?” Wherever I go, whatever the context, I keep getting this same question. Clearly, the excitement around artificial intelligence (AI) is real… look at the stock market.
This week, a slew of economic reports, which included inflation data, employment figures and retail sales reports, continue to indicate that the Fed still has a way to go on its quest to tame inflation.
On Tuesday, inflation numbers came in hot across most components. According to the release of March inflation figures, consumer prices have risen by 8.5% over the past year and 1.24% month-over-month, a rate of increase not seen in more than 40 years.
On Wednesday, the Federal Reserve lifted their key interest rate by 0.25% in the first of six expected rate hikes for this year, and possibly another four proposed increases in 2023. Federal Reserve Chair Jerome Powell had indicated that this increase was coming. So, when the stock market rose on Wednesday in response, it was less about the rate hike itself and more about Powell’s language associated with the move.
It would appear that the alternative investment industry has the complete focus of the SEC, and it is not hard to see why. Attracted by the high return potential and uncorrelated nature of many alternatives, sophisticated investors from significant pension plans, sovereign wealth funds, family offices and high-net-worth individuals have significantly increased allocations to the asset class over the last few decades.
The holidays are upon us, and at Ferguson Wellman, that means giving thanks, being grateful, staying humble and wishing for the best . And while we take the time to enjoy the festivities, we also keep one eye on the markets to see what lies ahead as the year closes. From now to the end of the year, market participants wait to see what rewards the “Santa Claus Rally” brings.
Last week while my wife was engaging in one of the favorite millennial pastimes of perusing Zillow.com, she blurted out, “Joe, come take a look at this!” At first, I didn’t believe what she was showing me. Our home, which we had purchased only a little more than a year ago, had appreciated a surprising amount according to the estimate.
