Market Updates.

• We’ve been encouraged by recent economic forecasts and numbers that indicate a softer overall inflationary impact.
• The unemployment rate fell to 3.7%, and U.S. nonfarm payrolls rose to 199,000 in November, a slight increase from the payroll gain of 150,000 in October.
• The November Consumer Price Index (CPI) increased by 0.1% over last month and is up 3.1% from a year ago. Wholesale prices remained unchanged in November, which is also an encouraging inflation indicator.
• As we approach 2024, there is some optimism in the housing market — even though housing prices are still high and supply is difficult, the average 30-year fixed mortgage rate declined to 7.07%, the lowest rate since July. Over the past week, mortgage applications increased by 7.4% and refinance applications increased by 19%.
• In the December meeting, the Federal Reserve opted not to raise interest rates, remaining within the 5.25%–5.5% target range. Projections released by the Fed indicate an expectation of four rate cuts in 2024, aiming for the goal of a 4.6% rate by the end of 2024.
• The Fed also shared an encouraging core personal consumption expenditures price index (core PCE) forecast indicating a decline of 2.4% in 2024 and 2.2% by 2025 to reach their 2% target in 2026. Previous forecasts indicated a decrease of 2.6% in 2024 and 2.3% in 2025.
• We are wishing you a very Happy Holiday season and a prosperous New Year!

Sources

• U.S. payrolls rose 199,000 in November, unemployment rate falls to 3.7%
• S. Bureau of Labor Statistics Economic News Release Consumer Price Index Summary
• Fed lowers inflation forecast for 2024, seeing core PCE falling to 2.4%
• Fed holds rates steady, indicates three cuts coming in 2024
• Wholesale prices held flat in November, providing another encouraging inflation signal
• Mortgage Applications Increase in Latest MBA Weekly Survey
• Mortgage refinance demand jumps 19% after rates hit lowest level since July

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Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Market Updates.

• While we have observed some unexpected fluctuations in the economy recently, they don’t appear to be extreme, and the economy remains resilient and strong.
• The Bureau of Labor Statistics October report showed a cool down as U.S. nonfarm payrolls only increased by 150,000, less than expected, while the unemployment rate rose to 3.9%.
• The October Consumer Price Index, which measures consumer price changes over time (excluding food and energy) was lower than anticipated with a two-year low of 4%.
• This month, the U.S. 10-year Treasury yield fell by almost 9 basis points, and the 2-year Treasury yield has fallen nearly 10 basis points.
• We saw an 0.8% decrease in import prices, along with a 0.5% decline for the Producer Price Index in October, the biggest drop since April 2020.
• Although the Federal Reserve opted not to raise interest rates in October, and it is encouraging to see the pace of inflation begin to slow, the Fed is still committed to enforcing a restrictive monetary policy through rate increases to achieve a decreased 2% inflation rate.
• Despite decreases in the jobs market, the potential slowing of inflation and interest rate hikes encourages us. No matter what, we won’t leave your financials up to chance or wait to see what the market does tomorrow. The Triangle Financial team always takes a long-game perspective, so you can rest assured we keep your future security in focus.

Sources

• CNBC Daily Open: Markets enjoyed early frost in October’s jobs report
• Treasury yields fall as investors weigh interest rate outlook
• Powell says Fed is ‘not confident’ it has done enough to bring inflation down

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Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Market Updates.

Overall, the U.S. economy continues to be resilient.

• Recent market fluctuation may be linked to the September jobs report, which was unexpectedly positive. Payrolls and hourly earnings increased, and the unemployment rate is slightly lower than expected. Job growth continues in the leisure and hospitality industries.
• Although the Federal Reserve didn’t raise interest rates in September, we still anticipate additional rate increases before year end.
• Consumers are selling out of long-term treasury bonds for liquidity, which makes sense with the 10-year treasury yield climbing to 4.88%. This is close to the level it was prior to the 2008 financial crisis.
• Economists continue to push out the timeline for when a recession could occur. That, combined with the fact that the only thing that’s been consistent with the market is that it’s unpredictable, means we can’t forecast for certain how the market will perform tomorrow.
• At Triangle Financial, we focus on a long-game perspective. Instead of making decisions based on what we think may happen tomorrow, we plan according to what we know right now. That way, you can rest assured that we are always keeping our eye on your future financial security.

Sources

• Payrolls soared by 336,000 in September, defying expectations for a hiring slowdown
• The Bureau of Labor Statistics: The Employment Situation — September 2023
• Why borrowing costs for nearly everything are surging, and what it means for you
• Fed declines to hike, but points to rates staying higher for longer

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Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Market Updates.

Overall, the economy has proven resilient and remains strong.

• Gas prices have been slowly rising mainly due to OPEC (Organization of the Petroleum Exporting Countries) cutting petroleum production by one million barrels per day.
• Russia and Saudi Arabia also extended their production cuts through the end of the year.
• We may also experience temporary gas price increases due to Florida hurricanes, but as long as major refineries are not impacted, prices should bounce back.
• Inflation rose less than expected over the last month by just 0.2% to the current rate of 3.2%.
• Employment and job openings have dropped resulting in the unemployment rate rising to 3.8%.
• Because the inflation rate remains higher than the Federal Reserve would like (3.2% compared to 2%), two more interest rate increases are expected. The Stock Market was down at the beginning of the month due to the latest interest rate increase, but the Market is now back up.

Sources

• July CPI report shows inflation gauge rose 3.2%, less than expected
• Unemployment rate unexpectedly rose to 3.8% in August as payrolls increased by 187,000
• Oil prices settle at 10-month high as Saudi, Russia extend supply cutsThe market may be primed for the Dow to lead with the debt ceiling resolved

Join us for the next Ask Triangle!

Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.

Market Updates

• Overall, the economy continues to be strong and resilient.
• A recent Jobs Report from the U.S. Bureau of Labor Statistics showed 339,000 jobs added and that the unemployment rate rose to 3.7%. It is interesting to note that the jobless rate is both the highest it’s been since October 2022 and near the lowest since 1969.
• The U.S. Debt Ceiling deal was reached, which includes suspending a limit until 2025 and an increase in the debt ceiling.
• The Stock Market has seen some successes recently, notably in the tech sector. The NASDAQ has now been on the rise for six consecutive weeks.
• With inflation still higher than desired, the Federal Reserve is expected to raise interest rates again in July.
• Despite the increase of interest rates ten time over the last year, consumers seem to be optimistic based on spending reports.
• We still haven’t seen a marked increase in gas prices, though they may go up later this summer. Saudi Arabia announced a plan to cut oil output in July, which could potentially affect prices.

As these updates indicate, the economy is not always predictable. If you’ve been keeping up with “Ask Triangle” on a monthly basis, you’ve likely noticed a few unexpected outcomes from previous predictions. That’s why our team places value on diversified portfolios, which helps us to proactively manage risk and increase stability in a volatile market.

Ask Triangle Question

Q: Are there any updates to you’re hearing about a recession, such as timing and depth?

A: Based on May meeting minutes from the Federal Reserving, a recession is still anticipated sometime in the fall or early winter. Fortunately, it is expected to be a shallow recession. It’s worth noting that the timing of when the recession is expected continues to be pushed further into the future. The uncertainty around timing is likely related to the surprisingly resilient market and consumer optimism, despite inflation and the constant interest rate increase from the Federal Reserve.

In preparation for the possibility of a recession, let us know if you’d like to re-evaluate any or all of the following:

• Cash-flow needs and distribution methods
• Emergency savings, and how to build some
• Other concerns around financial stability in an uncertain economic outlook

Our goal as your financial advisory team is to help you navigate uncertain times like these. Please don’t hesitate to reach out to us for any reason or concern!

Sources

• Here’s where the jobs are for May 2023 — in one chart
• Dow leaps 700 points on hot jobs report, Nasdaq notches sixth straight winning week: Live updates
• Oil steadies as Saudi cut supports and focus turns to Fed
• Minutes of the Federal Open Market Committee, May 2–3, 2023
• The market may be primed for the Dow to lead with the debt ceiling resolved

Join us for the next Ask Triangle on Friday, July 7th!

Securities and Advisory Services offered through Harbour Investments, Inc. Member SIPC & FINRA.