SAS Financial Advisors, LLC |
US sovereign debt was downgraded by one credit rating agency, Fitch, a smaller agency. S & P downgraded US debt in 2011 during the last debt limit crisis between the Obama administration and a Republican Congress. That previous downgrade had a much larger impact on the stock market causing a decline of over 15% in a week. Warren Buffett continues to purchase $10Billion of T-Bills each week. Clearly, he is not bothered by the downgrade...
SAS Financial Advisors, LLC ( |
Another Fed meeting, another rate increase raising the Fed Funds rate to the highest in 22 years. A ¼ point as anticipated. Also, this week was the first report by the Labor Department on 2nd quarter GDP growth. The report was higher than expected at 2.4% demonstrating the resilience of the economy again! The economy speaks of two voices. One is inflation persistence and the other is economic growth. Of course, they are related. The...
SAS Financial Advisors, LLC |
Nothing is more important than health. You can have all the money in the world but what does that mean if your health is suffering. Some health conditions are genetic and hard to control but a healthy lifestyle is under your control. Even if you live a healthy lifestyle often health issues arise. Just like personal finances, it is important to take responsibility for the conditions you can control. I have been borderline diabetic for...
SAS Financial Advisors, LLC |
The big news this week is that inflation has cooled noticeably toward the 2% Federal Reserve goal. These reports are always mixed in nature and some commentators point out that inflation numbers stripped from food and gas are meaningless considering so much of our cash flow is used for those two products. Markets continue to respond positively to inflation numbers because markets are looking forward to the Fed declaring an end to interest rate increases...
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The quarter ended with gains across the board for the stock market with interest rates continuing the inversion for 1 ½ years. Lo and behold, Jerome Powell the Fed chairman has repeated that rates will go higher during his news conference and minutes from the last Fed meeting confirm this view. Today ADP employment numbers were issued and were much stronger than markets expected. Result was a big decline in the stock market and higher...
"SAS Financial Advisors, LLC" |
Headline in the Wall Street Journal today is “economy shows surprising vigor in the first half” . Layoffs slowed last week, and 1st quarter GDP growth estimates were increased. Even in the face of increasing interest rates. The Fed is indicating that interest rates could increase a couple of more times this year. Consumers continue to spend on durable goods such as cars and on services such as eating out, travel and health care. Economists...
"SAS Financial Advisors, LLC" |
Sometimes it takes a while for information to sink in and filter through asset-to-asset values. Take the housing market. The costs of owning a home have risen significantly because of the increase in interest rates. In previous normal times this would cause a decline in home prices to offset the increased costs of owning. Buying a home would be less expensive because the increase in monthly costs would have to offset the initial cost of...
SAS Financial Advisors, LLC |
Fed stays put with the latest meeting but says two more rate hikes coming this year for a total increase this year of ½%. What the Fed says and what the Fed does are different. In fact, research says that people’s perception of inflation and expectations for inflation tend to have a bigger impact on inflation than what the Fed actually does. The threat of more rate increases drives down the expectations of this era...
"SAS Financial Advisors, LLC ( |
Recession yes or no, no, or yes? Roll the dice. A recession is when friends, acquaintances, and family lose their jobs. Depression is when you lose your job. The uncertainty of the economy seems like it has gone on forever. Even with two consecutive quarters of negative GDP growth in 2022, the classic definition of a recession, didn’t seem to convince the powers that be that we were in a recession. Turns out it seems...
"SAS Financial Advisors, LLC" |
Anticipation by markets that the bill raising the debt ceiling, having passed the House on a bi-partisan basis, is about to pass the Senate and become law before the US Treasury runs out of the ability to raise funds has boosted the stock market through the top of the range over the past 9 months. Earnings and forward-looking guidance by semiconductor companies is powering the NASDAQ averages. A word of warning: even with the outstanding...
"SAS Financial Advisors, LLC" |
With the debt limit rapidly approaching on June 1st as US Treasury Secretary Janet Yellen has stated repeatedly, it is time for Congress and the White house to get serious. It kind of seems like that is happening but markets were more interested in artificial intelligence and Nvidia’s earning report and future forecasts. At least the S & P 500 and the Nasdaq paid attention to those earnings. The Dow not so much. The Dow...
"SAS Financial Advisors, LLC" |
With spring in the air, bees buzzing, and the sun trying to make its appearance we thought this would be the perfect time to take a look back on what was happening one year ago. Last year's hot topics were full of spry. Here are some highlights from May 2022. “ The Fed announcement came and markets continued lower. ” “I have a rule: the market reaction on the day of a Fed announcement is...