US equity markets sold off in tandem with the US Treasury market as the Federal Reserve’s Open Market Committee meeting concluded with no change to its policy rate. The Fed’s Summary of Economic Projections indicated that another rate hike could be in play and also sent a clear message that rates are likely to be higher for longer. The Bank of England decided to keep its policy rate at the same level; however, the vote was 5 to 4, signaling division in the path of their monetary policy. The Swiss National Bank surprised by keeping its rate unchanged, while the Norges Bank and Sweden’s central bank decided in favor of a 25-basis point hike. The Hong Kong Monetary Board kept their rate unchanged at 5.75%.
The S&P 500 lost 2.9% and fell below 4400 after breaking its 50-day moving average in the prior week. The Dow gave up 1.9%; the NASDAQ tumbled 3.6% as mega-cap tech struggled, and the Russell 2k slumped 3.8%. US Treasuries fell again, with yields on the 2’s and 10’s hitting cycle highs. The 2-year yield increased by eight basis points to 5.12%. The 10-year yield rose by twelve basis points to 4.44%. There is real concern that if the 10-year yield eclipses 4.5%, there could be trouble ahead for risk assets.
Oil prices fell $0.73 to $90.27 as Wall Street continued to increase estimates of where crude could end the year. Gold prices were little changed, closing a dime higher at $1945.70 an Oz. Copper prices closed down $0.10 to $3.70 a lb. The US Dollar strengthened as central bank policy and projections for future rate hikes diverged across different geographies.
Economic news showed a stubborn labor market. Initial claims fell to 201k versus the estimate of 230k. Continuing Claims decreased to 1662k from the prior week’s figure of 1683k. The UAW strike continues and may start to impact these numbers in the future if negotiations remain in a stalemate. Housing data was mixed with better-than-expected weekly Mortgage Applications, lighter-than-expected existing home sales, and Housing Starts, while Housing Permits came in a bit better. Global Manufacturing and Services data showed manufacturing in contraction as services trending lower.
This week, the markets will digest another round of Treasury issuance. $48 billion in 2 years, $49 billion in 5 years, and $37 billion in 7 years will be auctioned, again a cycle highs. Economic data will include the 3rd estimate of Q2 GDP and the Q2 GDP Deflator, Personal Income and Spending, and the Fed’s preferred measure of inflation, the PCE.
Investment advisory services offered through Foundations Investment Advisors, LLC (“FIA”), an SEC registered investment adviser. FIA’s Darren Leavitt authors this commentary which may include information and statistical data obtained from and/or prepared by third party sources that FIA deems reliable but in no way does FIA guarantee the accuracy or completeness. All such third party information and statistical data contained herein is subject to change without notice. Nothing herein constitutes legal, tax or investment advice or any recommendation that any security, portfolio of securities, or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of FIA for services, execution of required documentation, including receipt of required disclosures. All investments involve risk and past performance is no guarantee of future results. For registration information on FIA, please go to https://adviserinfo.sec.gov/ and search by our firm name or by our CRD #175083. Advisory services are only offered to clients or prospective clients where FIA and its representatives are properly licensed or exempted.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Investment advisory services offered through Donato Wealth Management, PLLC, dba Empower Wealth Management and Empower Wealth & Tax (“Empower Wealth Management” or “EWM”),
an SEC registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional adviser before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned, or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Personal investment advice can only be rendered after the engagement of EWM, execution of required documentation, and receipt of required disclosures. All investment and insurance strategies have the potential for profit or loss. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. Past performance is no guarantee of future results. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #305031.
Insurance products and tax services are offered through Senior Tax and Insurance Advisors, PLLC, dba Empower Wealth Group (“Empower Wealth Group” or “EWG”). Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products offered through EWM. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. EWG is not affiliated with or endorsed by the U.S. Government, Social Security Administration, nor the federal Medicare program. You may be contacted by a licensed insurance agent. Calling the number above will direct you to a licensed insurance agent. EWG may not offer every plan available in your area. Any information provided is limited to plans available in your area. Please contact Medicare.gov or 1-800-MEDICARE.
EWM and EWG are both affiliated companies of Empower Wealth, LLC (“Empower”). Investment adviser representatives of EWM may have a financial incentive to recommend tax and insurance products and/or services offered through EWG which presents a conflict of interest. This conflict is addressed by EWM’s adoption of its Code of Ethics, which requires that all EWM’s Associated Persons place the interest of clients ahead of their own. Clients of EWM are also free to choose their own tax and/or insurance professionals and are under no obligation to utilize the services offered through any related entities or persons associated with Empower.
Strategic Partners listed on this page are not employees of EWM and are not affiliated through common ownership.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
© Empower Wealth Management All Rights Reserved.
