December 2025 Financial Market Update

Presented by Marc Aarons

I hope you had a great holiday weekend! Last month looked calm on the surface, but proved more nuanced. U.S. markets spent most of November near record highs before losing momentum as AI enthusiasm met earnings reality, Fed officials tempered rate-cut expectations, and a government shutdown left investors with less economic data than usual.

The month crystallized around three themes. First, the evolving macroeconomic backdrop presented challenges, with labor market data gaps and mixed inflation signals. Second, the government shutdown and Fed messaging reshaped rate expectations. Finally, dominant AI players, housing trends, and broader sector rotation (the movement of stock market investment from one industry to another) defined the year-end investment landscape.

Major U.S. Stock Indices

November’s mixed performance reflected shifting Fed rate-cut expectations and sharp rotations in AI and mega-cap tech (tech companies with market valuations over $200 billion). Renewed hopes for easier Fed policy fueled late-month rebounds, though profit-taking in stretched tech leaders capped overall gains.

• The S&P 500 edged up 0.13%.
• The Nasdaq 100 declined 1.64%.
• The Dow Jones Industrial Average gained 0.32%.

Macro Backdrop & Policy

• November’s macro story was defined by what didn’t happen: government data. The 43-day federal shutdown erased October’s Consumer Price Index (CPI) entirely and pushed the payrolls report into December, leaving investors and the Federal Reserve navigating in fog with no clarity on near-term inflation or labor momentum.
• In that vacuum, Fed voices set the tone. Vice Chair Philip Jefferson argued the October rate cut nudged policy closer to neutral. In contrast, Governor Christopher Waller backed another quarter-point cut in December, insisting inflation is gliding toward 2%, the labor market is cooling, and he wasn’t worried about a snapback.
• But the late-October Federal Open Market Committee (FOMC) minutes revealed a central bank split down the middle. Several officials felt the October cut overshot, and many wanted rates on hold through 2025 unless growth weakens. With September inflation still running around 3% and core inflation (which removes volatile food and energy) stuck near 0.3% month-over-month, price pressures remain stubborn enough to keep hawks uneasy and doves pressing their case.

Labor Market & Inflation 

• With October’s household survey never collected, markets head into December flying blind on the unemployment rate during the shutdown. The Bureau of Labor Statistics (BLS) will deliver a combined October and November payroll print and a refreshed unemployment rate in mid-December — a report that now looms large for the December FOMC meeting.
• On inflation risks, Fed officials flagged competing forces. AI-driven investment is giving productivity a lift, but shifting policies on tariffs and immigration threaten to tighten labor and goods markets. The push and pull leaves the inflation outlook muddier heading into year-end.
• Cleveland Fed President Loretta Mester sharpened this cautionary tone on November 6th, warning that while Gross Domestic Product (GDP) and unemployment hover near long-run norms, inflation has edged higher again. With policy rates now a half-point lower than in August, she argued the Fed’s stance is less restrictive and may exert “less downward pressure” on inflation.

Housing Market

• Existing-home sales held at a 4.1 million annual pace in October, with the median price at $415,200, up modestly year-over-year. Inventory remained tight at 4.4 months of supply, while U.S Federal Housing data showed national prices up 2.2% year-over-year in Q3 before stalling in September.
• Importantly, the rise in home prices this year masks sharp regional divergence: gains in Connecticut and New Jersey offset declines in Florida and D.C., while softness spreads beyond isolated markets. Sellers are capitulating as October saw a surge in delistings and record price cuts.
• Forecasts point to gradual recovery through 2026, but the current reality is extended listings, thinner volume, and buyers back in the driver’s seat.
• Note that the typical U.S. homebuyer is nearing retirement, with the median age hitting 59, while first-time buyers now average a record 40 years old. High prices, elevated mortgage rates, and thin inventory are locking out younger households, while favoring older, equity-rich repeat buyers.

The Path Forward

November’s mixed signals offer important guideposts. The Fed is easing, but divided views and noisy data make aggressive bets premature. Meanwhile, AI and mega-cap tech continue driving profits, though recent volatility underscores the need for selectivity. With data disruptions elevating the value of regular economic metrics, the Fed’s rate decision on December 10th and AI companies’ progress updates will serve as critical economic checkpoints.

The environment calls for balance: staying diversified, managing risk thoughtfully, and focusing on the long-term. As always, I’m here if you have any questions or concerns as the end of the year approaches.

Please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

Investment advisory and financial planning services are provided by Money Managers, Inc. a registered investment advisor.  Our CRD Number is 151602.  To access our most recent version of our Form ADV, Form ADV Part 2A and privacy policy, visit https://adviserinfo.sec.gov/. This information is for educational purposes only.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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Financial Market Update – Week of 8/18/2025

Presented by Marc Aarons

 It’s certainly been an eventful time for the economy and stock market. Markets are hitting record highs, but inflation and policy uncertainty are tempering expectations for near-term rate cuts. Amid a busy end to the summer, below are the top takeaways from the last week.

Stock Index Performance

• The S&P 500 rose by 0.94%.
• The Nasdaq 100 gained 0.43%.
• The Dow Jones Industrial Average climbed by 1.74%.

Inflation

• Headline inflation stayed put at 2.7% in July, surprising forecasters as tariffs only nipped at consumer prices. It’s also notable that falling energy costs gave wallets a break at the gas pump.
• Under the surface, however, core inflation jumped to 3.1%, its hottest level since winter, thanks to soaring prices for goods and services like used cars and medical care.
• While tariffs haven’t yet sparked sticker shock in autos or appliances, some economists caution that surging prices in other key goods may show that inflation’s reach is spreading.

Labor Market

• While the unemployment rate is still low at 4.2%, slowing payroll growth and job creation fuel speculation that the Federal Reserve may cut rates to support employment, even as inflation lingers.
• In regions affected by tariffs and in sectors with rising input costs (e.g., manufacturing and construction), employers are showing caution regarding wage increases and hiring.
• Despite these headwinds, wages have outpaced inflation on a year-over-year basis for 27 consecutive months, underscoring a positive trend for American workers.

Consumer Sentiment

• Consumer sentiment fell in August for the first time in four months, despite July retail sales rising 0.5% month-over-month and signaling stabilizing spending. The decline may reflect inflation concerns, Fed policy uncertainty, and the pass-through of tariff-driven price pressures.
• While fears of worst-case recession scenarios have faded, most consumers expect inflation and unemployment to deteriorate in the coming months. 

The Week Ahead

• The Jackson Hole Symposium begins Thursday, August 21, with markets focused on Federal Reserve Chair Jerome Powell’s Friday address. Investors will watch closely for guidance on the timing and pace of policy easing.
• The U.S. housing market is still stagnant due to high rates. Upcoming data, including housing starts & building permits (Aug. 19) and existing home sales (Aug. 21), will offer constructive insight into sector conditions.

That’s it for this week’s update! August often springs with unforeseen surprises, so if you have any questions or concerns, you can always reach out to me. I am here as a resource and ready to support your financial journey.

Please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

Investment advisory and financial planning services are provided by Money Managers, Inc. a registered investment advisor.  Our CRD Number is 151602.  To access our most recent version of our Form ADV, Form ADV Part 2A and privacy policy, visit https://adviserinfo.sec.gov/. This information is for educational purposes only.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post Financial Market Update – Week of 8/18/2025 appeared first on Money Managers, Inc..

June 2025 Financial Market Update

By Marc Aarons

Last month brought us surging stocks fueled in part by progress on trade with the United Kingdom and China and inflation metrics released during the month following a similar relaxing pattern as the previous month.

It has been a volatile two months, with swings in both directions, making it an opportune time to share an overview of what happened and what could be ahead. Read on for a monthly summary of what you should know.

Major U.S. Stock Indexes

It was bulls on parade during May on Wall Street, courtesy of tariff relief hopes. The S&P 500 had its best month of May in 30 years.

Here’s how major U.S. stock indexes fared in May:

• The S&P 500 rose by 6.15%.
• The Nasdaq 100 surged by 9.04%.
• The Dow Jones Industrial Average traded higher by 3.94%.

Inflation Relaxation

Inflation metrics showed more signs of relaxing in May, much like in April, even though many consumers expect it to rise due to tariffs.

Consumer Price Index (CPI)

• Consumer expectations notwithstanding, inflation for consumers showed signs of easing in April. CPI data indicated a monthly increase of 0.2%, leading to a 12-month inflation rate of 2.3%. This figure was below expectations and represents the lowest rate since February 2021.
• Once again, shelter costs were the primary driver of the monthly increase in consumer inflation. Data indicated a 0.3% rise in shelter prices for the month, which accounted for more than half of the overall change in the CPI.
• Wholesale pricing, measured by the Producer Price Index (PPI), also decreased in April, falling to 2.4% from the previous 2.5%.

Core PCE

• Core Personal Consumption Expenditures (PCE), the Fed’s preferred inflation gauge, was released towards the end of May, so it is the freshest piece of inflation data. It showed that Core PCE softened to 2.6% in April, matching consensus estimates.

Putting together the inflation metrics released in May, one could surmise a continuation of last month’s cooling narrative, while the full future impact of tariffs is yet to be known.

Fed Meeting

• As expected, the Federal Reserve left its key overnight lending rate unchanged at 4.25% to 4.50% during its meeting in May.
• A cautious tone was observed, given recent economic developments that showed both areas of strength and weakness. The Fed ruled out any preemptive rate cuts related to tariffs.
• Federal Reserve Chair Jerome Powell emphasized the Fed’s “wait and see” approach.

Labor Market

• The freshest labor/payroll data release showed a seasonally adjusted 177,000 jobs created in April, surpassing the Dow Jones estimate of 133,000.
• The job number was stronger than expected, even with concerns over the recently imposed blanket tariffs.
• Equity market reaction to the data was positive. The unemployment rate remained steady at 4.2%, indicating relative labor market stability, while average hourly earnings rose by just 0.2% for the month, shy of the 0.3% estimate.

The Consumer: Pensive, Waiting

• Data from the University of Michigan indicated that consumer sentiment remained at one of the lowest levels ever recorded in May. Trade uncertainty seems to be the main factor driving the consumer’s emotions.
• After retail sales skyrocketed in March with consumers getting ahead of potential higher prices due to tariffs, April was a different story.
• Retail sales growth of 0.1% was reported for April, and the March data was revised higher to a whopping 1.7%.

April Showers Gave Us May Flowers

• After a wild month of April for the financial markets, May gave us flowers. By the end of May, the broader tone had shifted away from tariff and trade fears to tariff progress.
• Earnings results have been solid for Q1, and the month of May closed out with NVIDIA beating revenue estimates.
• The tone seems like a good one to start the fresh month. But we have learned in 2025 that narratives can shift extremely quickly. While nobody can know what is ahead, the shift in narrative from April to May was a classic example of the resolve required to be a successful long-term investor.

If you would like to discuss the current market outlook and explore investment strategies based on your objectives or market developments, please feel free to contact me. I am always here when you need me!

Please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

Investment advisory and financial planning services are provided by Money Managers, Inc. a registered investment advisor.  Our CRD Number is 151602.  To access our most recent version of our Form ADV, Form ADV Part 2A and privacy policy, visit https://adviserinfo.sec.gov/. This information is for educational purposes only.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post June 2025 Financial Market Update appeared first on Money Managers, Inc..

Financial Market Update – Week of 11/18/2024

Presented by Marc Aarons

Major U.S. stock indexes digested monthly inflation data last week, and market participants reacted to comments made by Fed Chair Powell. There was plenty of market-moving action last week, so let’s get to it with a quick update!

Tallying last week, the S&P 500 declined by 2.08%, the Nasdaq 100 fell by 3.42%, and the Dow Jones Industrial Average decreased by 2.60%.

 Major U.S. Equity Indexes

 It has been quite the post-election rally, and equity markets took a breather last week. After the S&P 500’s biggest five-day rally in a year, major U.S. stock indexes sold off ahead of key monthly inflation data, with rising Treasury yields and a rising U.S. dollar as catalysts.

 Federal Reserve Chair Jerome Powell’s comments about the future of interest rate cuts added to last week’s sentiment — more on that in a minute.

 Mostly In-Line Inflation Data

 According to the most recent metrics released last week, inflation remained mostly unchanged in October but was slightly warmer than the previous month’s reading.

 Consumer Price Index data showed a monthly increase of 0.2% in October, matching consensus expectations. This equaled a 2.6% year-over-year inflation rate, higher than the previous month’s 2.4% reading — so in line, but warm.

 Core CPI, which excludes food and energy, also rose in line with expectations, tacking on 0.3% for the month and running at a 3.3% annual pace.

 Once again, shelter costs were the primary factor contributing to the monthly rise in inflation, accounting for more than half of the increase. In October, shelter prices rose by 0.4% monthly and saw an annual increase of 4.9%. Despite an otherwise stabilizing inflationary environment, shelter pricing remains high.

 Overall, the CPI data could be interpreted as in line with expectations, but with some overall stubbornness, as the data showed an overall rise from 2.4% in September to 2.6% in October.

 CPI Market Reaction

 Major U.S. stock indexes rose slightly on the morning of the data release, as the report suggested firming up expectations for a 25 basis point rate cut at the December meeting. The odds of such a rate cut moved higher on the data release day to around 82%.

 But the mood of the markets would shift the next day, with Powell dampening expectations of a rate-cutting Fed. 

 Producer Price Index (PPI)

 Producer pricing (wholesale pricing) showed a rise of 0.2% in September, matching Dow Jones estimates. Similar to CPI, this wholesale inflationary data came in at expectations, but it was still a rise from the previous month’s reading. 

 Verdict: Inflation is at expectations, but pockets of warmth are on the minds of many. Later in the day on Thursday last week, major U.S. equity indexes would trade lower —  not as a direct response to PPI, but more due to Fed Chair Powell’s comments below.

 FedWatch: Powell Commentary

 With market reaction to CPI and PPI in progress, Powell tempered rate-cut hopes during a meeting at a speaking engagement titled “Global Perspectives” hosted by the Federal Reserve Bank of Dallas later in the day Thursday.

 Powell’s comments threw some cold water on risk assets and translated to a fading rally across major US stock indexes.

Comments included that the Fed doesn’t need to be “in a hurry” to lower rates.

 While Powell mentioned the economy is still strong, his comments were deemed as hawkish by the market at large, and rate-cut hopes diminished rather significantly.

 At the close of last week’s trading, futures traders showed a 61.9% probability of a 25-basis-point cut at the December Fed meeting, according to the CME FedWatch tool.

 Gathering consensus elsewhere, opinions are divided, and we will have to see what the Fed does — or says next. We are well aware that the Fed is “data-dependent,” and with inflation persisting and uncertainty surrounding the labor market, we need more data to get a read.

 Government Bond Yields Rise

 As major stock indexes fell last week on hawkish Fed commentary and open-to-interpretation inflation data, government bond yields rose.

 Ten-year note yields gained around 12 and a half basis points to end the week near 4.429%, the highest weekly close since June.

 Two-year note yields also moved higher, although not as much as the 10-year yield, gaining around 5 basis points, closing the week near 3.584%.

 Perhaps recent pricing behavior in government bonds over the last couple of months was predicated upon the Fed getting more hawkish like we saw last week. 

 Gold Loses Luster

 Gold bulls have been hibernating since the election after the shiny yellow metal touched all-time highs in the spot market pre-election near $2,790 per troy ounce. Spot gold closed near $2,563 per troy ounce last week, still higher by a handsome percentage for the year so far.

 Reduced political uncertainty surrounding the election outcome and flows into equities could have given gold bulls some room for pause in the short term.

 The Takeaway

 We just had a monster post-election rally featuring the S&P 500’s best five-day stretch in a year. CPI and PPI data are constructive in that the inflation battle has been fruitful and productive, but there is room for interpretation on both sides of the argument in the eyes of the market. 

 The Fed sounded hawkish, and rate cut probabilities dwindling somewhat last week didn’t leave market bulls with much to hang onto temporarily. But we have come far rather quickly. Profit-taking is bound to occur for shorter-term traders. For long-term investors, however, the beat goes on until the next narrative takes form. 

 Let’s also be mindful that the interest rate markets have been telling us something for the last couple of months, as rates have risen in the open market. Even though the recent narrative has been for more rate cuts to come, the move higher in rates has been stubborn. So, an adjustment in market pricing for many assets was bound to occur. Let’s see what we get next.

 As always, if there is anything on your mind regarding the markets and the latest developments, shoot me an email or give me a call! I am always here as a resource for you.

Please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post Financial Market Update – Week of 11/18/2024 appeared first on Money Managers, Inc..

Financial Market Update – Week of 10/14

All eyes were focused on Consumer Price Index (CPI) data released last Thursday, as traders wanted to see the next chapter of the inflation narrative. The second trading week of (the usually volatile) October is in the books, and it was a good one for major stock indexes.

Summarizing last week’s trading, the large-cap S&P 500 gained 1.11%, the Nasdaq 100 increased by 1.18%, and the Dow Jones Industrial Average increased by 1.21%.

Mixed Inflation Data

Data showed a slight warming in inflation on the consumer level, with a monthly increase of 0.2% — a tick higher than estimates. The month brought a 2.5% year-over-year inflation rate, which was the lowest reading since February 2021 but still a tick higher than Dow Jones consensus estimates for 2.4%.

Core CPI, which excludes food and energy, tacked on 0.3% for the month versus expectations for 0.2%. The annual core CPI rate was at 3.3%.

Once again, shelter and food prices were the main culprits for the rise in overall consumer inflation, accounting for more than three-quarters of the rise in the all-important consumer inflation metric.

Janky Inflation Data? 

If you are a fan of financial buzzwords, this one’s for you. Let’s add “janky” to the list!

In an interview last week, Atlanta Federal Reserve President Raphael Bostic mentioned that it is important to see if individual data points form a larger pattern or if there are just some “janky” data points (in reference to the September CPI data and jobs reports coming in hotter than expected).

Bostic, a voting member of the Federal Open Market Committee (FOMC), mentioned that the choppiness in recent data ”is along the lines of maybe we should take a pause in November” when referring to rate cuts.

So far, traders interpreted the warmer-than-expected CPI data in a “janky” way as well, with traders increasing their bets on a rate cut. Investors may be banking on the Fed continuing with its plans to continue to cut rates, despite inflation showing some quick signs of inching higher. Since the Fed just started with rate cuts about three weeks ago, the consensus may be for the Fed to stay the course and not deviate based on a few data points.

It is a dynamic time now. It’s October, data is up for continued interpretation, and the election is right around the corner.

CPI Market Reaction

Major U.S. stock index futures initially sold off upon the data release at 8:30 a.m. ET and traded lower for about half of the New York trading session, as the report indicated a run-of-the-mill 25-basis-point cut at the November meeting. However, the S&P 500 held its lows made upon the data release and closed the day very close to where it was before the CPI data release.

It was an interesting reaction to the data, as market participants figured out how a higher tick inflation print could affect the Fed at the next meeting. So, after an initial stumble reaction to the data and digestion, the S&P 500 found its footing on the day of the data release.

Producer Price Index (PPI) Data

The day after CPI was released, wholesale pricing showed no change in inflation, coming in below Dow Jones estimates for a 0.1% monthly rise. Major stock indexes reacted positively to the data and continued their upward journey, having a positive day to close out last week.

The most recent data for September puts the annual PPI rate at 1.8% and is constructive in the inflation easing theme. 

This Week

October is in full swing, and the major U.S. equity markets have done well so far, as we enter the meat of the month. With CPI and PPI out of the way for October — and data showing a slight uptick in consumer pricing combined with flat producer pricing — attention this week turns to retail sales data in an otherwise quiet economic data release week. 

Perhaps more time will need to pass for the markets to digest the recent inflation data.

As always, if there is anything on your mind regarding the markets or your long-term investing strategy, please feel free to reach out. I am always here as a resource for you. 

Please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post Financial market Update – Week of 10/14/2024 appeared first on Money Managers, Inc..

OCTOBER FINANCIAL MARKET UPDATE

I hope this email finds you well! Long-term investors with diversified portfolios had a solid month in September, as the S&P 500 rose for three consecutive weeks. As a bonus, the recent stock index rally was further fueled by a Federal Reserve (Fed) that delivered on a 50-basis-point rate cut.

With the major U.S. equity market indexes continuing their impressive overall upward trajectory since May, now is the perfect time to inform you about key developments over the course of the last month.

Major Stock Indexes

The recent stock market rally continued for another month, but it wasn’t without some fireworks at the beginning of the month over labor market concerns.

Amazingly, the S&P 500 had its worst week of 2024 to start the month. Yet by month’s end, it was another month in the green. It is truly amazing how the volatility has come and gone so quickly this year. 

Overall, for the month of September, the S&P 500 added 2.02%, the Nasdaq 100 tacked on 2.48%, and the Dow Jones Industrial Average was higher by 1.85%.

Fed Rate Cut

In September, the Fed delivered the hugely anticipated rate cut in the form of a 50-basis-point cut to the overnight lending rate, leaving the Fed’s target rate between 4.75 – 5.00%. The rate cut is the first in four years, and the market response was supportive.

 Heading into the Fed rate decision, a rate cut was widely expected, and it was just a matter of whether it would be 25 or 50 basis points. The Fed went in the more aggressive direction.

 Fed Market Reaction & Expectations

 Market reaction to the Fed rate decision the day after the announcement was bullish and was on full display, as the Dow and S&P 500 jumped to record high levels.

 According to the Fed’s Summary of Economic Projections (SEP), 50 basis points of additional cuts are now expected for 2024, a more dovish and accommodating stance than previously thought.

 Fed Recalibration

 Are you looking for a new financial buzzword? Fed “recalibration” is here! This term originated at the Fed press conference following the interest rate decision.

 The message is one of strength surrounding the state of the economy, indicating that the large 50-basis-point rate cut was not executed due to economic weakness, but rather to shore up the labor market .

 Markets interpreted the message in the intended fashion, as asset prices soared the day after the Fed announcement and recalibration message.

 Softer U.S. Inflation Readings

 The overall trend for inflation saw some further cooling in September to the delight of stock market bulls.

 Consumer Price Index (CPI): The most recent CPI data released in September (August data) showed inflation continuing to cool on an annualized basis, coming in right at expectations. The report revealed a 0.2% increase in monthly CPI, resulting in an annual increase of 2.5% — the lowest annual inflation rate since 2021. Markets liked it.

 Prices of goods and services are still elevated; we don’t need government data to let us know that! But we are making great strides toward the Fed’s 2% inflation target. Many analysts expect the overall inflation-cooling trend to continue, but let’s see how the 50-basis-point cut affects it!

 CPI Market Reaction: Markets initially lost some ground upon the CPI data release in September, with the Dow falling 743 points intraday before mounting its largest intraday comeback in almost two years.

 The trading action came as a result of traders and investors trying to figure out if the data would edge the Fed toward a 25- or 50-basis point cut and whether such an action would translate to a soft or hard landing.

 Well, we got the 50 basis points at the Fed meeting, and the current consensus and market reaction is one for a soft landing.

 Producer Price Index (PPI): The day after we got CPI,  producer pricing (i.e., wholesale pricing) was released and showed a rise of 0.2% in August, matching Dow Jones estimates. Major stock indexes came into the day of the release higher from the previous day’s CPI print and continued their upward journey that day.

 Personal Consumption Expenditures (PCE): The freshest piece of inflation data came towards the end of September in the form of the Fed’s preferred inflation gauge, PCE.

 Data showed pricing coming in below expectations, with prices rising 2.2% annually and only 0.1% for the month versus expectations for 0.2%.

 2.2%, psychologically, is very close to the Fed’s goal of 2%, and the encouraging data print on the inflation front paves the way toward a rate-cut-friendly Fed in the future.

 Mixed Labor Market Data 

 September’s monthly jobs report showed another decline in job creation, with 142,000 jobs created in August vs. 161,000 forecasted. Unemployment declined on a monthly basis, however, to 3.9% versus 3.7% forecasted.

 The data comes after recent revisions that triggered concern over the labor market. Over the last couple of months, we’ve seen downward revisions in previously printed job creation data, and they factored heavily into the Fed’s 50-basis-point rate cut decision to shore up the labor market.

 Treasury Yields & Normalization

 The 2-year Treasury yield and the 10-year Treasury yield moved lower overall throughout the month, ending September near 3.803% on 10s and 3.645% on 2s.

 Perhaps more important is the relationship between the 10-year and 2-year yields. We saw the 2/10 yield curve “uninvert” or normalize in September for the first time in 793 days, which represented the longest yield inversion in history. Yield inversion occurs when the 2-year Treasury yield is larger than the 10-year yield. 

 Well, we are back to normal now. The 2/10 yield curve normalization has various interpretations, one of which is that it’s a historical indicator that portends recession. Yet, other interpretations exist based on where we are.

 Mixed Consumer Data

 September retail sales data showed an increase of 0.1% in August amid varying expectations. After reaching a six-month high in August, consumer confidence dropped in September to 98.7 versus expectations of 103.9.

 So, it was a mixed bag for the consumer last month. We’ll see how the Fed’s rate cut affects the consumer in upcoming data releases. 

 The Takeaway

 September featured a further continuation of the rally in anticipation of a Fed rate cut, and the market got what it wanted in the form of the 50-basis-point variety. Inflation data showed further signs of encouragement, although the labor market could use some help. We know the Fed has this in mind. 

 The yield curve “uninversion” or normalization hasn’t commanded too much attention in the media, but we know it has occurred. Election Day themes are a topic of discussion and will continue to be until Election Day and beyond. 

 Current expectations for 50 basis points more in cuts to come for the rest of 2024. How will the normalization of the yield curve intertwine with any potential further rate cuts? Time will tell.

 As always, we’re dedicated to prioritizing long-term goals and strategy while keeping you apprised of current market developments. If you have questions or concerns, feel free to reach out anytime. I am always here as a resource for you.

 Wishing you a fantastic October,

As always, please don’t hesitate to reach out with any questions or concerns.

Marc Aarons may be reached at 714-887-8000 or Email Marc

Money Managers inc. Website

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post OCTOBER FINANCIAL MARKET UPDATE appeared first on Money Managers, Inc..

5 Ways to Protect Against Inflation

Presented by Marc Aarons

Do you remember what year it was that a gallon of gas was $0.63? Depending on your age, you may or may not! Answer: The year was 1978.

When the costs of goods and services rise in an economy, inflation may be a part of that price increase. These inflationary forces can create challenges. As savers see their purchasing power decrease, it can lead to less of a desire to save cash. People living on fixed incomes are especially impacted. Fortunately, there are ways to protect yourself against inflation. Here are five:

1. TIPS: Treasury Inflation-Protected Securities provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater. Interest is paid semiannually at a fixed rate.  TIPS can be held until maturity or sold prior to maturity.
2. Precious Metals Funds: Historically, the price of gold tends to increase during inflationary periods as the purchasing power of the dollar decreases. As it takes more dollars to buy an ounce of gold, the price tends to rise. How has the price of gold behaved lately? There are numerous precious metals funds that invest in gold and silver with some even including platinum and palladium in their holdings.
3. Commodity Mutual Funds: Broadly speaking, the price of commodities tends to increase during periods of inflation. Think of the corn and wheat that go into a box of cereal —the rising cost of the raw materials tend to increase the price of the finished product. There are many mutual funds that invest in agricultural and energy commodities that can potentially benefit from an increase in underlying commodity prices.
4. Equities / Equity Mutual Funds: Companies that are in inflationary-sensitive sectors such as industrials and materials can potentially benefit in a higher inflation environment.  If a company’s activity is producing a commodity, inflation could potentially contribute to improving the company’s bottom line.  There are specialty mutual funds that offer such underlying equities within the fund’s portfolio.
5. Real Estate / REITs: Real Estate Investment Trusts can provide protection against inflation.  Real Estate rentals and values tend to increase when prices do. For REITs, the dividends are typically a very attractive benefit. According to Nareit, REIT dividends have outpaced inflation as measured by the Consumer Price Index in all but two of the last twenty years.

It is always wise to be proactive and have strategies at the ready when the possibility of inflation arrives. These assets, among others, can provide diversified methods of protection from eroding purchasing power due to inflation.

If inflation is a concern of yours, please feel free to reach out to me. I would be delighted to discuss a personalized plan tailored to your individual investment objectives and situation.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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Top Tips for Managing Debt

Presented by Marc Aarons

It won’t come as a surprise that 77% of American households have debt of some sort—especially as inflation hits a 40-year high and prices on just about everything skyrocket.

When you couple that with the fact that three in five people report living paycheck-to-paycheck, it’s easy to see the challenge facing American families this year.

That said, if you find yourself trying to tame consumer debt while living paycheck-to-paycheck, you’re not alone. The good news is there are small ways to ease the financial squeeze and lessen future fallout.

Here are five:

1. Avoid new debt. If possible, avoid new debt right now. As interest rates rise, save and pay cash for non-essential purchases.
2. Always pay on time. Consider enrolling in auto-pay when possible. Remember, payment history makes up 35% of your credit score, so it’s critical for your future financial health to make payments on time.
3. Activate the debt snowball. Here’s how it works. Make a list of your debts, with the lowest balance first. Pay the minimum payments on all but your smallest debt. Send extra funds there until it’s paid off, then use that money to throw at the next largest debt.
4. Add to your emergency fund. Building an emergency fund of 3-6 months of living expenses feels daunting—especially in this inflationary environment. But keep at it as you’re able! Every dollar you can set aside now will help you build a safety net and stay out of debt when unexpected expenses come your way.
5. Assess various side hustles. Paying off debt is one of my top tips for clients, but increasing income is close behind. Consider if a side hustle is right for you. The gig economy is exploding, and you can easily find a profitable side hustle to start with little or no money.

If you have questions or would like to discuss your financial situation to ensure you’re making the best decisions for you and your family, given the current climate, I’m here to help. Reach out anytime.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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Financial Market Update for the Week of 2/12/24

Presented by Marc Aarons

The broader major U.S. stock indexes kept chugging along last week, with the S&P 500 making fresh highs and closing above 5,000 for the first time in history. Last week’s gains for the S&P 500 marked its 14th weekly gain out of the last 15 weeks, a feat last seen over 50 years ago!

With so much talk about the stock market right now, it’s a good time to get you up to speed.

Overall, for last week, the S&P 500 climbed by 1.37%, the Nasdaq 100 rose by 1.81%, and the Dow Jones Industrial Average increased by a marginal 0.04%.

S&P 500 Closes Above 5,000

It’s all over the news, and markets are generally obsessed with round numbers. Some folks put on their party hats and get excited, but for the disciplined long-term investor, it really is just a number.

Yes, without a doubt, the major U.S. stock market averages have been in a tear as of late. In fact, the S&P 500 rose from the October 2023 lows just above 4,100 to north of 5,000 in just 15 weeks.

But there is no need for excitement when it comes to planning your financial future. Remaining steady and level-headed during both bull and bear markets is a critical component of long-term success.

To put the last 1,000 S&P 500 points into perspective, it was April of 2021 when the S&P 500 crossed the 4,000 level for the first time.

Tech in Growth Mode & To-Date Q4 S&P 500 Earnings

Earnings watchers have been pleased by several results from tech companies lately, indicating that the tech sector is back in growth mode.

Artificial intelligence (AI) continues to be a key driver in quarterly technology company conference calls, and the AI theme isn’t going away anytime soon.

For Q4 2023, with 67% of S&P 500 companies across all sectors reporting actual results, the year-over-year earnings growth rate is 2.9%.

If 2.9% ends up being the actual growth rate for the quarter, it will be the second consecutive quarter that the S&P 500 has reported earnings growth, according to data from FactSet.

Treasury Yields Rise

While markets were obsessed with the S&P 500 last week, Treasury yields quietly rose. Ten-year note yields rose by about 15.6 basis points, settling the week near 4.188%, up from their previous weekly close near 4.032%.

So, the ability of the major U.S. stock market indexes to rise with Treasury yields rising was alive and well last week, much to the displeasure of prospective mortgage borrowers, with the average 30-year mortgage rate climbing back above 7% last week before dipping slightly.

Inflation Data This Week

Consumer inflation data is on tap this week,  and many investors are eagerly awaiting the release of Consumer Price Index (CPI) data on Tuesday and Producer Price Index (PPI) data on Friday.

This is an important release, and anything is possible, especially after last month’s mixed inflation data. Revisions to December data released last week showed that U.S. monthly consumer prices rose less than initially thought, however.

As I mentioned earlier, it’s important to stay calm and level-headed when investing for the long term. No one can predict with a high level of certainty whether inflation will maintain its current pace of decline.

With that overview noted, if I can be of service in any way this week, please feel free to contact me. I am always here as a resource for you.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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2024 HSA and FSA Contribution Limits

Presented by Marc Aarons

I’m reaching out today to share a noteworthy development that could shift how you plan for healthcare expenses in 2024.

Beginning in 2024, an inflation adjustment by the IRS will allow you to contribute more to a health savings account (HSA). In fact, it’s the most considerable increase since HSAs were first introduced in 2004.

With that in mind, the 2024 HSA limits are $4,150 (up from $3,850) for individuals and $8,300 (up from $7,750) for families. Taxpayers 55 and older can save an additional $1,000.

I would also like to share an important update regarding Flexible Spending Arrangements (FSAs) for 2024.

Effective for the 2024 plan year, employees can allocate up to $3,200 from their payroll deductions towards their FSA, an increase of $150 from 2023. Most importantly, these contributions are exempt from federal income tax, Social Security tax, and Medicare tax.

Employers and spouses with their own plans can also contribute, potentially doubling this figure. Unused amounts up to $640 can be carried over to 2025 if your FSA plan allows.

Please don’t hesitate to reach out if you have any questions or want to discuss this further. I’m here to help however I can.

Marc Aarons may be reached at 714-887-8000 or marc@ocmoneymanagers.com

www.ocmoneymanagers.com

This communication is from Money Managers, Inc.; a Securities and Exchange Commission registered investment advisor.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results.  Investments involve risk and are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

The post 2024 HSA and FSA Contribution Limits appeared first on Money Managers, Inc..