Market Commentary

INVESTMENT COMMENTARY – FOURTH QUARTER, 2023

The market started 2023 with expectations that the Federal Reserve (Fed) would be cutting its benchmark rate by year end and we’d finish the year below 5%. Instead, after four 25 basis points rate hikes, we exited 2023 with a benchmark rate of 5.25% to 5.50%.

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INVESTMENT COMMENTARY – THIRD QUARTER, 2023

After a strong first half, the equity market was down about 3% in the 3rd quarter but is still up 13% for the year (using the S&P 500 as the benchmark). The market was strong during the 1st half despite the Federal Reserve (Fed) raising its target Fed Funds rate from 4.25% (lower bound) to 5% by the end of the 2nd quarter. The Fed then raised rates again in July before a pause at the September meeting, leaving the lower bound target at 5.25% as of quarter end…

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INVESTMENT COMMENTARY – SECOND QUARTER, 2023

The Federal Reserve’s (Fed’s) policy to increase the federal funds rate from zero to over 5% has worked to reduce inflation. Inflation peaked at 9.1% in June of 2022. Since then, the Consumer Price Index (CPI) has declined to 4.0% year over year according to the last reading as of May. While higher rates have slowed the economy, the broader economy has not entered a recession, nor does one appear imminent due to the strong job market…

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INVESTMENT COMMENTARY – FIRST QUARTER, 2023

The S&P 500 finished the first quarter up 7.5%. Unlike 2022, large technology-oriented companies led the advance as the median stock appreciated a little more than 1%. The markets started the year strong as expectations for a Federal Reserve rate cut at the end of the year grew.

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INVESTMENT COMMENTARY – FOURTH QUARTER, 2022

The markets closed the year down as most asset classes continued to perform poorly. For the year, the S&P 500 declined about 18%. The bond market also closed the year down (the Bloomberg U.S. Aggregate Bond index fell about 13%) as the Federal Reserve (Fed) raised interest rates and reduced its balance sheet (i.e., not reinvesting the proceeds of maturing securities)…

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