In 15 minutes we can get to know you – your situation, goals and needs – then connect you with an advisor committed to helping you pursue true wealth.
EWA, LLC dba Equilibrium Wealth Advisors, is an SEC-registered investment advisory firm providing investment advisory and financial planning services to clients.
Investments in securities and insurance products are not insured by any state or federal agency.
To view EWA’s public disclosure, registration, Form ADV and Part 2B’s, click here.
To view EWA’s Client Relationship Summary (CRS), click here.
In 15 minutes we can get to know you – your situation, goals and needs – then connect you with an advisor committed to helping you pursue true wealth.
WEEKLY MARKET COMMENTARY | APRIL 13, 2023
Ambiguous images.
Some illustrations are optical illusions. When two people view the picture, they may see completely different images. A good example is Rubin’s Vase. One viewer may see a vase, while another sees two faces.
Current economic conditions can be interpreted in different ways, too. Recent economic data and a possible credit crunch, resulting from upheaval in the banking sector, suggest growth is slowing. After viewing the data, some say we’re heading for a soft landing, and others say a recession is coming. Here is the recent data:
Randall Forsyth of Barron’s reported, “The solid employment report for March further raises the odds that the U.S. economy is headed for a proverbial soft landing.” Not everyone agrees.
Economist and former Treasury Secretary Lawrence Summers gives more weight to manufacturing and services data than employment data. He also pointed to the Dallas Federal Reserve’s Banking Conditions Survey, which showed lending volumes declined sharply in March. Summers told Bloomberg’s Wall Street Week with David Westin:
“Employment and unemployment are lagging indicators of what’s happening in the real economy…There is some substantial amount of constriction in credit. If you looked at the forward-looking numbers this week from the PMI surveys, those numbers were quite weak…Recession probabilities are going up at this point. The Fed has a very, very difficult decision ahead of it.”
Major U.S. stock indices finished the week with mixed results, reported Carleton English of Barron’s. In the Treasury market, yields on many shorter-maturity increased, while yields on longer-maturities fell.
________________________________________________________________________
Sources:
https://en.wikipedia.org/wiki/Rubin_vase
https://www.bea.gov/sites/default/files/2023-03/pi0223.pdf
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-46-3-march-2023-manufacturing-ism-report-on-business-301787309.html
https://www.prnewswire.com/news-releases/services-pmi-at-51-2-march-2023-services-ism-report-on-business-301789944.html
https://www.bls.gov/news.release/empsit.a.htm
https://www.barrons.com/articles/fed-inflation-economy-jobs-report-rate-hikes-a43e0d82 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2023/04-10-23_Barrons_A%20Solid%20Jobs%20Report%20Suggests%20One%20More%20Fed%20Rate%20Hike%20in%20May_6.pdf)
https://www.bloomberg.com/news/videos/2023-04-07/-the-fed-needs-to-engage-in-some-serious-soul-searching-video [The Fed Needs To Engage In Some Serious Sole Searching. 0:43]
https://www.dallasfed.org/research/surveys/bcs/2023/bcs2302
https://www.barrons.com/articles/stock-market-dow-nasdaq-s-p-500-fed-dividends-97aaef90?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2023/04-10-23_Barrons_Tired%20of%20Waiting%20for%20the%20Fed%20to%20Pivot_9.pdf)
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2023
https://www.barrons.com/articles/fed-interest-rates-investing-mantras-51662006600 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2023/04-10-23_Barrons_The%20Fed%20is%20Hawkish_11.pdf)
https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Monetary-Policy
https://www.yahoo.com/video/don-t-fight-fed-wall-165947003.html
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20230322.pdf (Figure 2)
https://madison.com/uw–madison-2012-spring-commencement-carol-bartz-address/youtube_17568e79-9672-57a7-a13e-f5ff3de2ffaa.html [12:40]
Share This Commentary:
Get In Touch
In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.
Subscribe
Add me to the weekly newsletter to say informed of current events that could impact my investment portfolio.
Important Disclosures:
Securities and advisory services offered through EWA LLC dba Equilibrium Wealth Advisors (a SEC Registered Investment Advisor).
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.