Market Recap Archive
February 23, 2024
Stocks hit new highs again during this holiday-shortened week, partly driven by the strong results from NVIDIA that resulted in positive sentiment throughout the Technology sector. Economic reports were light - weekly jobless claims were better than expected as jobs remain strong, and existing home sales were stronger than expected and showed an improvement from the prior month’s reading. The Federal Reserve released their minutes on Wednesday, which indicated that no cuts would be coming until the rate-setting Federal Open Market Committee held “greater confidence” that inflation was receding. The Fed meets next on March 19-20, and investors have shifted their expectations of initial rate-cut action from March to June. Next week, we look forward to readings on new and pending home sales, durable-goods orders, consumer confidence, GDP and the US trade balance, jobless claims, personal income and spending, PCE and core PCE, and advanced retail and wholesale inventories. On Thursday, March 21st, we will be hosting a virtual event with Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Mystery of What the Future Holds”. Please register here: https://mybuckingham.com/events/event-ai-and-chatgpt-the-mystery-of-what-the-future-holds. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
February 16, 2024
The S&P 500 finished the week relatively flat, as crosscurrents in economic data led to both pullbacks and advances. On Tuesday, Consumer Price Index figures came in higher than expected. This indicator of inflation caused the market to sell off due to expectations of interest rates staying higher for longer. An interesting component of the report highlighted that food at home prices are up 1.2% year-over-year, whereas food away from home prices are up 5.1% year-over-year. However, on Thursday, retail sales came in weaker than expected, prompting markets to move higher on hopes that higher interest rates have sufficiently slowed consumer spending. Interest rates were up slightly for the week, and there is still a greater than 90% chance that the Federal Reserve will leave the target lending rate unchanged during the March 20th meeting. Next week we will be watching updates on Manufacturing and Services PMI readings as well as data on existing home sales. Please note that markets, banks, and post offices will be closed on Monday, February 19th in observance of President’s Day. On Thursday, March 21st, we will be hosting a virtual event with Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Mystery of What the Future Holds”. Please register here: https://mybuckingham.com/events/event-ai-and-chatgpt-the-mystery-of-what-the-future-holds. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
February 9, 2024
The S&P 500 hit 5,000 for the first time ever. The index is currently up more than 5% this year, still being mostly driven by the largest stocks. Earnings reports for Q4 continue to roll in, with 67% of companies reporting so far and more than 10% reporting next week. About 65% of companies that reported have posted a positive sales surprise, while 75% have posted a positive earnings surprise. Both figures are near longer-term averages. This week’s stock rally came despite higher interest rates, which increased after last week’s strong jobs report and comments from the Fed that rate cuts would come later in the year. Treasury yields increased by at least 0.25% across several maturities and are generally close to 2-month highs. The next Fed meeting is March 20th, but the first rate cut may come on May 1st. Used car prices fell 1% in January, according to Manheim, and prices are 21% below the all-time high of just over 2 years ago. Cocoa prices have jumped over 30% this year to an all-time high of $2.45 per pound due to poor growing conditions in Africa; expect higher chocolate prices for Easter and beyond. Next week, we will be watching updates on consumer inflation, producer inflation, retail sales, and housing. On Thursday, March 21st, we will be hosting a virtual event with Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Mystery of What the Future Holds”. Please register here: https://mybuckingham.com/events/event-ai-and-chatgpt-the-mystery-of-what-the-future-holds. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
February 2, 2024
The S&P 500 advanced again this week after a rally on Friday that turned the week positive. The move was largely due to a blowout January jobs report that showed 353,000 jobs added, well above the expectation of 185,000. The January unemployment rate stayed unchanged at 3.7%. Earnings season continued this week, with earnings from major companies Microsoft, Apple, Amazon, Alphabet, and Meta. Amazon and Meta reported particularly good earnings, with Meta announcing their first-ever dividend. On Wednesday, the Fed left rates unchanged, and indicated that rates are unlikely to change at the March meeting given the current economic data. In fixed income, yields on U.S. 5-year and longer maturities fell slightly, while shorter maturities remained unchanged. Next week, earnings reports are expected from McDonald’s, Eli Lilly, Disney, and Pepsi. Economic reporting next week is light, but we will be watching Monday’s ISM report for an indication of services growth. We are excited to announce we will be hosting an online webinar March 21 with renown AI speaker, Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Mystery of What the Future Holds”. Stay tuned as additional information and registration will be released soon! If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
January 26, 2024
After hitting a new high last Friday, the S&P 500 gained around 1% this week, reaching 4,900 for the first time. The Dow Jones Industrial Average also crossed 38,000 for the first time. Technology stocks continued to lead the way, and the sector now represents just over 30% of the S&P 500. Following reports by banks and credit card companies, Apple, Microsoft, Alphabet, Amazon, and Meta are all set to report earnings next week. Earlier this week, we received the first read on Q4 GDP of 3.3%, above expectations of 2.0%, but below Q3’s pace of 4.9%. On Friday, the update on core Personal Consumption Expenditures (a measure of inflation) came in at 2.9% year-over-year, better than 3.0% expected and better than the prior reading of 3.2%. Next week, we look forward to readings on the U.S. trade deficit, consumer credit, jobless claims, ISM services, and wholesale inventories. We are excited to announce we will be hosting an online webinar March 21 with renown AI speaker, Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Mystery of What the Future Holds”. Stay tuned as additional information and registration will be released soon! If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
January 19, 2024
The markets climbed more than 1% during the shortened week after being closed on Monday in observance of Martin Luther King, Jr. Day. All the return came from momentum in the final two trading days, as evidenced by a new S&P 500 all-time intraday and closing high. The market was boosted by strong semiconductor stock performance, which was driven by analyst upgrades and company earnings emphasizing the growth prospects of AI. The optimistic shift followed more hawkish (restrictive) commentary from the Fed earlier in the week, which lowered hopes for a March rate cut (which is stimulative to the economy) to just over 50% from 90% in late December. Retail sales and import prices both came in higher than expected, further cooling near-term rate cut expectations. European Central Bank (ECB) officials made remarks that tempered expectations for interest rate cuts overseas. This marks the third week in a row that jobless claims came in below expectations (187,000 versus 206,000 consensus). Existing home sales (3.78M versus 3.82M consensus) came in a bit lighter than last month’s reading, while housing starts (1.46M versus 1.425M consensus) came in slightly stronger than expected. We are excited to announce we will be hosting an online webinar March 21 with renown AI speaker, Dr. Amy Fletcher. She will present on “AI & ChatGPT: The Future of the Financial Industry”. Stay tuned as additional information and registration will be released soon! If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
January 12, 2024
The S&P 500 gained nearly 2% this week, driven in part by a rally in shares of NVIDIA and Advanced Micro Devices after they announced new chips for AI, PCs, and gaming. On Thursday, several exchange-traded funds (ETFs) tied to the spot price of bitcoin started trading in the U.S., a notable development after the cryptocurrency industry has been seeking regulatory approval for more than a decade. Earnings season kicked off Friday with reports from JPMorgan and other large banks showing fourth quarter earnings that failed to lift hopes for a robust quarterly earnings season. In economic news, inflation data was mixed, with Consumer Price Index (CPI) readings coming in slightly higher than expectations, but with Producer Price Index (PPI) readings coming in slightly below consensus estimates. With these crosscurrents in play, the odds of the Federal Reserve keeping interest rates at the current 5.25%-5.50% range at the January meeting are still above 90%. Next week, we will be watching Retail Sales, Unemployment Claims, and Existing Home Sales. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. We also have a new Quarterly Keynote Video available here: https://vimeo.com/901923809. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
January 5, 2024
Happy New Year! May the new year be one of health, joy, and outsized returns. Following market exuberance in December, the S&P 500 slid by about 1.5% during the first week of 2024. Apple, the most heavily weighted stock in the S&P 500, pulled the market lower after several analyst downgrades. The Fed reaffirmed it would be appropriate for policy to remain at a restrictive stance “for some time until inflation is clearly moving down sustainably.” This walked back some of the more encouraging commentary last month. The Treasury yield curve rose slightly this week with the 10-year trading around 4%. ISM Manufacturing came in stronger than last month, but it has remained below 50 (indicating contraction) for 14 straight months. November Job Openings & Labor Turnover (JOLTS) came in slightly softer than October’s reading (which was below expectations), which is showing signs of contracting labor demand. Jobless claims came in lower than consensus expectations and the prior reading. The ADP Employment report showed an increase of 164,000 private sector jobs in December, led by leisure and hospitality. Both private and nonfarm payrolls improved from last month and were higher than expected. The unemployment rate remains strong at 3.7%. Next week, we look forward to consumer (CPI) and producer (PPI) inflation readings. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
December 29, 2023
The S&P 500 had a small gain, but remained just shy of new intraday or closing highs. At this week’s peak, the S&P 500 was 0.07% below the closing high of 4,796.56 and was 0.53% below the intraday high of 4,818.62. These highs were set in the first days of 2022. Small cap stocks and international stocks are also near 2-year highs. With this being the ninth straight week of gains, a pause or pullback in stocks could be expected, though new highs may come first. Treasury yields fell a little again this week, as did the national average mortgage rate, now 6.6%, which is the lowest since May. The Federal Reserve is expected to cut rates in 2024, though the Fed currently expects a total of 0.75% of cuts (from the current level of 5.33%), while traders expect a total of 1.50% of cuts. Based on past performance of forecasts, neither may be right. The next Fed announcement is January 31st, where no change is expected. Next week, we will be watching the monthly jobs report on Friday, as well as the ISM Services Index report. We wish you all a happy and safe New Year! Thank you. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
December 22, 2023
The S&P 500 gained for the eighth week in a row, increasing another 0.7% this week and inching ever closer to a new all-time high. The price reached 4,818.62 intraday on 1/4/22 and was as high as 4,778 this week. Inflation measures continue to improve: today’s update on Core PCE, the Fed’s favored inflation metric, showed consumer prices were 3.2% higher than a year ago, better than expected and an improvement from last month’s reading. The odds of the Fed starting to cut rates in March increased to 90%, though that is still three months away. Other economic reports were also positive: consumer confidence rose to multi-month highs, housing starts and existing home sales in November were stronger than expected, and durable goods orders were strong. Lower inflation readings have supported lower interest rates on bonds. Treasury yields and mortgage rates declined again this week, retreating to levels last seen in June or July. There are very few economic or company-specific updates scheduled for next week. Stock markets are closed on Monday, 12/25, and Monday, 1/1. Stock markets are open for a full day on Friday, 12/29, which is the last trading day of the year. We wish everyone happy holidays and safe travels. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
December 15, 2023
The market ended on a positive note this week following the final Fed decision for 2023. The Dow Jones Industrial Average crossed above and closed above 37,000 for the first time, and the S&P 500 hit a new high on a total return basis and is very close to a new all-time price high. On Wednesday, the official Fed statement left the door open to raising rates, however, at the press conference Fed Chair Powell’s comments suggested officials had turned their attention to rate cuts. Just two weeks ago, Powell said it was too soon to speculate about when lower rates might be appropriate. Following this news, 5-year and 10-year Treasury yields declined again, with the yields dropping below 4% - less than two months from when they were approximately 5%. Additionally, the rate on a 30-year fixed mortgage dropped to 6.95%, the lowest since August. Next week, we are looking forward to an abundance of housing data including housing starts, building permits, and existing and new home sales, along with durable-goods orders, core PCE readings, and personal income/spending. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
December 8, 2023
The S&P 500 advanced slightly this week as markets were cautiously optimistic ahead of a busy economic calendar next week. The Consumer Discretionary, Real Estate, and Utilities sectors moved the markets higher, while Energy lagged. Yields on 5-year and 10-year Treasury bonds declined to nearly 4.1%, a drop of almost a full percent from October levels of 5%, before rising to 4.25% after a good jobs report. 199k jobs were added in November and the unemployment rate fell to 3.7%. Oil continued its slide from October highs, with WTI crude prices dropping briefly below $70 per barrel Thursday, before finishing the week at $71. Next week will have a flurry of economic data: CPI data for November will be released on Tuesday, PPI data is scheduled for Wednesday, and retail sales for November will come on Thursday. All eyes will be on the Federal Reserve meeting Wednesday, where expectations are for interest rates to remain unchanged. Future markets indicate the earliest likelihood of a rate cut would be in March of 2024, with less than a 50% chance. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
December 2, 2023
The S&P 500 gained 9.1% on a total return basis in November, putting the year-to-date gain at over 20%. The gains have been driven by a handful of mega-cap stocks, which have more impact than the average stock in the index. The equal-weighted S&P 500 index, where very large companies like Apple and Microsoft have the same impact as much smaller companies, gained 6.6% through the end of November. Mid cap and small cap stocks gained about 7% and 3%, respectively, while developed international stocks gained over 12%. Lower inflation readings, lower bond yields, and lower oil prices helped support the recent stock rally. This week, the updated estimate for third quarter GDP was revised higher to 5.2%. It was also reported that this past Cyber Monday was the biggest online shopping day of all time in the U.S., with an estimated $12.4B of sales. Weekly unemployment claims remain historically low and we will be watching the monthly jobs report next Friday, where national unemployment is expected to remain at 3.9%. This week, the ISM Manufacturing Index stayed in contraction territory for the 13th month in a row, but next week’s ISM Services Index is still expected to show growth. Once again, Buckingham Big Hearts is supporting Toys For Tots and we are accepting donations through December 7th, https://mybuckingham.com/about/buckingham-big-hearts. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 24, 2023
The S&P 500 finished the holiday-shortened trading week with a modest gain of nearly 1%, buoyed by market optimism that U.S. interest rates will not see additional raises. Earlier in the week, PMI readings provided mixed signals, with services PMI above forecast but manufacturing PMI below forecast. Existing home sales came in slightly under consensus, and durable goods orders were weaker than anticipated, adding weight to the argument that higher rates are slowing economic activity. Minutes from the latest Fed meeting, however, gave no indication of when rate cuts might begin. The odds of the Fed leaving the target interest rate range unchanged at the December meeting are now greater than 95%. Next week, we will be watching data on new home sales, consumer confidence, and core PCE. While we renovate to serve you better, Buckingham Advisors has temporarily relocated from Building 3 to Building 5, Suite 101. Please call (937) 435-2742 if you need assistance. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. We hope that you and your family enjoy a safe and happy Thanksgiving weekend. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
November 17, 2023
The market wrapped up yet another week on a solid note. Earlier in the week, we received consumer inflation for October (CPI), which was slightly lower than expected. This caused bond yields to fall and stocks to rise as traders now expect no additional Fed rate hikes. Also, for the month of October, retails sales fell 0.1% M/M, which was better than the 0.3% expected decline. The retail sales report is closely watched by the Fed and traders ahead of this year’s holiday shopping season, which officially kicks off next week on Black Friday. On Wednesday, the Senate took the risk of a partial government shutdown off the table and extended funding until January/February of next year. In other news, crude oil prices continue to fall on concerns of a slowing global economy, which could affect demand, especially in the Middle East. Next week, we look forward to data on existing home sales, U.S. leading economic indicators, durable goods orders, U.S. services and manufacturing PMI, and consumer sentiment. While we renovate to serve you better, Buckingham Advisors has temporarily relocated from Building 3 to Building 5, Suite 101. Please call (937) 435-2742 if you need assistance. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
November 10, 2023
The S&P 500 followed last week’s strong rally with another 1.3% gain this week. The Tech sector, which is nearly 30% of the S&P 500, outperformed the broad market by over 3%, more than offsetting this week’s losses in the relatively small sectors of Energy, Utilities, and Real Estate. Q3 earnings season is all but over, with 92% of companies having reported results. The 4.1% year-over-year growth in Q3 earnings comes after three straight quarters of year-over-year earnings declines. For 2023, earnings are expected to grow very little, so the return in the market this year has come mostly from increased valuations. This week, bond yields rose slightly after last week’s decline, the price of commodities such as oil, gold, and corn fell, and volatility declined. The economic calendar was fairly light this week, but next week we will be watching updates on consumer and producer inflation. Finally, we thank all Veterans, as we are grateful for your service. While we renovate to serve you better, Buckingham Advisors has temporarily relocated from Building 3 to Building 5, Suite 101. Please call (937) 435-2742 if you need assistance. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 3, 2023
The market ended on a very strong note this week with the S&P 500 up around 6%. All eyes were on the Fed as they announced their decision to keep the Federal Funds rate unchanged and in the range of 5.25-5.50%. Following this news, yields fell as bond prices rallied and the market soared (especially Technology and growth names). We received the monthly jobs report Friday morning, which showed 150k jobs added in October, below the 180k expected. The prior month’s 336k jobs were revised down to 297k. Unemployment ticked slightly higher to 3.9%, above the expectation and previous month’s reading of 3.8%. These data readings signal that some parts of the economy are cooling, which makes it more likely that the Fed will continue leaving rates unchanged. It is now more likely the Fed could be finished with additional hikes altogether. In other news, corporate earnings for Q3 are wrapping up and (so far) have been generally favorable. Next week, we are looking forward to data on the U.S. trade deficit, consumer credit, wholesale inventories, initial jobless claims, and additional Fed commentaries. While we renovate to serve you better, Buckingham Advisors has temporarily relocated from Building 3 to Building 5, Suite 101. Please call (937) 435-2742 if you need assistance. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
October 27, 2023
The S&P 500 moved lower this week, with mixed results from some of the largest names in the index. Outperformers after earnings included Microsoft, Meta, and Amazon, while Google shares slid back on underperformance in their cloud business despite also beating earnings estimates. GDP for the 3rd quarter came in much stronger than anticipated, with 4.9% real growth. New home sales in September were better than anticipated despite higher mortgage rates, and durable goods orders were also higher than consensus. Treasury yields came down slightly this week but are still near their highs. Next week is another busy week on the earnings calendar, with Apple set to headline earnings after the market close on Thursday. Next week, we will be watching ISM reports on manufacturing and services, the Fed’s interest rate decision on Wednesday (no change expected), and the monthly jobs report on Friday (3.8% unemployment rate expected). If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you and we hope you have a Happy Halloween!
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
October 20, 2023
This week, the market slid just over 2%. Stocks began the week positively, but retreated towards the end of the week after Treasury yields pushed to new multi-year highs. The 3-month Treasury yield currently sits at 5.6% and the 10-year yield is just under 5%. It appears unlikely the Fed will raise rates in the near-term, with 0% expectations for a November rate hike. This week a strong retail sales report is showing a recession is not imminent. Retail sales increasing 0.7% month-over-month was better than 0.3% forecast and the prior month’s number was revised higher. Jobless claims remain a bright spot, with 198k in initial claims marking a 9-month low. Existing home sales also came in higher than expected. The heart of Q3 earnings season will occur during the next two weeks and we will be digesting earnings reports from many companies, including names like Microsoft, Visa, Coca-Cola, Honeywell, Amazon, and Exxon for both results and Q4 forecasts. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. We also have a new Quarterly Keynote Video from our Managing Director of Investments, Ryan Johnson, available here: https://vimeo.com/873783464. Thank you.
Allen Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
October 13, 2023
The S&P 500 posted a small gain this week despite a multitude of headlines that infused volatility into the market. The week began on a somber note as Israel was attacked by Hamas militants. As the conflict continues, markets are unsure of the expected duration of hostilities as well as the impact to regional and global markets, international travel, and supply chains. Earnings season kicked off this week as bellwethers JPMorgan Chase, UnitedHealth Group, and PepsiCo all reported positive quarters. In economic news, Consumer Price Index numbers were mostly in line, but Consumer Sentiment readings came in below expectations. With all of these variables at work, the odds of the Federal Reserve keeping interest rates at the current 5.25%-5.50% range at the November meeting have climbed to nearly 90%, with the odds of no change at the December meeting now sitting at nearly 70%. Next week, we will be watching Retail Sales and Unemployment Claims. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. We also have a new Quarterly Keynote Video from our Managing Director of Investments, Ryan Johnson, available here: https://vimeo.com/873783464. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
October 6, 2023
We saw volatility across both stocks and bonds during the first trading week of October. Bonds sold off and the yield on the 10-year Treasury reached 4.8% this week, a level that has not been seen since 2007. Stocks started the week under pressure as there was no government shutdown, which increased the odds of a Fed hike in December (Fed would have been more likely on hold if there was a shutdown), and a strong JOLTS (Job Openings and Labor Turnover Survey) report displayed more job openings. To end the week, the monthly jobs reported came in much stronger than expected with 336k jobs added in September compared to expectations of adding 170k. Additionally, the unemployment rate stayed at 3.8% and the labor participation rate stayed the same. Crude oil started the week at $91/bbl on Monday, and dropped to a four-week low of $82/bbl on Thursday, as there appears to be lower consumption due to higher prices, as well as concerns from oil traders that higher interest rates will lead to lower global growth. Next week, we look forward to information on wholesale inventories, the import price index, readings on YoY PPI/CPI and core PPI/CPI, initial jobless claims, and preliminary consumer sentiment. Later in October, we will have the first of a two-part workshop, "The Only Book You'll Ever Need for an Organized Estate". Please visit https://mybuckingham.com/events for details. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
September 29, 2023
The S&P 500 declined less than 1% this week, capping off a month that accounted for all of the 3% decline for the quarter. The index is still up over 13% this year. The U.S. Aggregate Bond index also declined about 3% in the quarter, but this pushed it into loss territory for the year. This follows losses in 2021 and 2022, all as a result of rising rates. Once interest rates stop rising, forward returns should be much better, now that yields are higher. Higher interest rates, higher oil prices, and a looming government shutdown have been headwinds to stock prices recently. Investors should not be too concerned about a shutdown, as historically most stock market weakness occurs before the shutdown. In the past 20 government shutdowns, the S&P 500 stayed relatively flat, with the index losing an average 0.4% the week before a shutdown and gaining 0.1% by the end of a shutdown, according to a Reuters analysis. An update on consumer inflation showed a 3.9% increase from a year ago, which was an improvement from last month’s reading of 4.2%. This, and other factors, increased the odds of no additional Fed rate hikes this year. A recent Schwab study showed that if you invested the same amount each year for 20 years using several different methods, investing immediately each year (and not trying to time the market) was nearly as effective as having perfect timing each year. Next week, we will be watching updates on manufacturing and services activity, as well as the monthly jobs report. Later in October, we will have the first of a two-part workshop, "The Only Book You'll Ever Need for an Organized Estate". Please visit https://mybuckingham.com/events for details. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
September 22, 2023
The S&P 500 declined 2.9% this week, as interest rates hit multi-year highs. On Wednesday, the Federal Reserve did not raise their key interest rate, but continued to leave the door open for further hikes. Fed Chair Powell used the phrase “proceed carefully” six times during Wednesday’s press conference, likely indicating the Fed Funds rate can stay on hold instead of moving higher. While hikes might not occur, the message of keeping rates higher for longer was heard loud and clear by the markets. Bond yields rose, stocks declined, and the dollar strengthened. The S&P 500 traded down to similar to levels from mid-June and mid-August. The 50-day moving average (50 DMA) for the S&P 500 just turned downward for the first time since turning up in late November 2022. This is really a tool for short-term traders and is not a concern; a downward 50 DMA happened in 8 of the past 10 calendar years. This week, 5-year Treasury yield went over 4.6%, the highest since August of 2007, while the 10-year Treasury yield went as high as 4.49%. While housing remains under pressure from higher mortgage rates, the employment picture remains strong, as weekly unemployment claims dipped again. Next week, we will be watching updates on consumer confidence, consumer spending, and consumer inflation. Please see the updated Events & Videos section of our website that covers topics such as Estate, Medicare, Small Business, and Social Security: https://mybuckingham.com/events. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
September 15, 2023
The S&P 500 ended this week mostly flat following a series of economic data. Consumer Inflation data (CPI) came in above expected at 3.7%, with core at 4.3%, and lighter than last month’s reading of 4.7%. Producer prices (PPI) came in above expectations at 1.6%, with core at 2.2%, and again, softer than last month’s reading of 2.4%. While these numbers continue to reflect stubbornly high prices, most of the increase is coming from areas of the economy the Fed cannot control. The upcoming Fed announcement will be held on Wednesday, 9/20. It is assumed by the market that the Fed will not be raising rates, but many investors will be listening closely to every word during the press conference. In other news, oil prices crossed over $90/barrel this week as OPEC+ agreed to extend supply cuts, and demand for oil in China continues to increase stronger than expected. The market experienced some pressure towards the end of the week as the United Auto Workers (UAW) union commenced a strike against the Big Three automakers. Turning attention to the fixed income markets, U.S. Treasury bond yields were largely up this week and the 3-month Treasury yield remains higher than the 10-year yield, continuing in its longest streak since 1962. Next week, we look forward to readings on housing starts, building permits, and existing home sales along with U.S. services/manufacturing PMI. We also just released a new video discussing Medicare that is presented by Josh Kinzel and our very own Brad Griffith, CPA, CFP®, CRPC®, available here: https://vimeo.com/864166894?share=copy. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
September 8, 2023
Did you see the strong economic reports this week? ISM Services of 54.5 (anything >50 indicates expansion) was stronger than expected and stronger than the prior month. Jobless claims (of 216,000) improved to the lowest level in seven months as continuing claims also declined. “Good news was bad news” as the stronger reports appear to give the Fed room to pursue more restrictive monetary policy. However, Fed Funds futures continue to point to the most likely outcome resulting in no further rate hikes. The S&P 500 declined a little more than 1% during the holiday-shortened week, with Energy as the only positive returning sector. The higher price of oil may increase inflation readings and be a drag on consumer sentiment. Oil has increased from about $70 per barrel at the start of July to $87 recently. The 10-year Treasury now yields 4.25% as it continues its rebound from early April YTD lows of 3.3%. Next week, we will be watching the consumer and producer inflation updates (CPI and PPI). We also just released the fourth video in our Small Business Video Library series, available here: https://vimeo.com/channels/buckinghamvideolibrary. Thank you.
Allen Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
September 1, 2023
The S&P gained over 2% this week, as investors favored growth stocks. Technology, Communication Services, and Cyclical sectors led the way as stocks such as Apple, AMD, Amazon, and Google all posted solid gains. The best day of the week was Tuesday, strengthened by a Job Openings (JOLTS) report that showed slowing in the labor market, which is one of the key data points looked at by the Fed when setting interest rate policy. Friday’s monthly jobs report showed that the unemployment rate moved higher, from 3.5% to 3.8%, while earlier in the week consumer confidence was lower than expected. Despite a strong finish, the S&P still declined 1.6% in the month of August. Treasury yields fell this week as both short- and medium-term maturities on the curve moved lower. Expectations are that the Fed will maintain the current Fed Funds rate when they meet in 3 weeks and reevaluate whether further hikes would be warranted at the November or December meetings. Next week, markets will be closed on Monday in observance of Labor Day, while the most important data point is the ISM Services report on Wednesday. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
August 25, 2023
The S&P 500 posted a gain this week in a welcome change from the down weeks that have been witnessed so far this month. Existing home sales, manufacturing PMI, services PMI, and weekly jobless claims all came in lighter than expected, yet markets did not react much, as they were poised for scheduled comments from Federal Reserve Chair Jay Powell at the Jackson Hole Economic Symposium on Friday. The prevailing message was that the Fed is still pursuing a 2% inflation goal, and while inflation has eased from peak levels, it remains above target. As such, the Fed intends to “proceed carefully” and stands prepared to raise rates further “if appropriate.” Following these remarks, the odds of a 0.25% rate hike at the September FOMC meeting moved slightly higher, but there is still a greater than 80% chance that the target range will be left unchanged at the meeting. However, the odds of a 0.25% hike at the November meeting have moved up to nearly 50%. Next week, we will be watching announcements for Job Openings on Tuesday, GDP on Wednesday, and Personal Consumption Expenditures on Thursday. We also just released the third video in our Small Business Video Library series, available here: https://vimeo.com/channels/buckinghamvideolibrary. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager and Research Analyst
August 18, 2023
Since the August 10th update on consumer inflation (CPI), which was slightly higher than the previous month’s report, longer-term Treasury yields have been rising. This week, yields on 5-year, 10-year, and 30-year Treasuries increased to levels that were near the peak of 2022, which were the highest seen in over a decade. With Treasury yields well over 4% and A-rated corporate bond yields well over 5%, for the first time in many years, the fixed income market is becoming more of a viable alternative to parts of the equity market. The S&P 500 is down nearly 5% in August, but it is still up approximately 15% this year. Economic reports, and reports from certain retailers, were generally positive this week: better than expected national retail sales, an increase in industrial production, weekly jobless claims declined, and housing starts and permits increased from the prior month. These positive factors, 3.5% national unemployment, and inflation not yet falling to the Fed’s 2% target leave room for the Fed to keep its short-term interest rate higher for longer, the impact of which eventually trickles through to longer-term interest rates. Next week, we will be watching any comments from the Fed’s meeting in Jackson Hole, WY, as well as updates on home sales, consumer sentiment, and durable goods orders. Our latest Market Insights was just published here: https://mybuckingham.com/insights and in it we note, among other things, that clients may be surprised to learn that the dollar is fairly close to 20-year highs for strength relative to a basket of global currencies. We also have a developing video series, our Small Business Video Library, available here: https://vimeo.com/channels/buckinghamvideolibrary. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
August 11, 2023
After last week's closing high, the market finished slightly lower this week as the Technology sector weighed on the S&P 500. Following Fitch’s downgrade on U.S. debt last week, Moody’s cut credit ratings of several smaller U.S. banks with potentially more to come. Treasury yields increased marginally (10-year is around 4.16%), and the futures market is not pricing any changes to the Fed Funds rate well into next year. Consumer Price Index (CPI) data was the most anticipated report of the week and came in similar to last month (+0.2% Month-over-Month). Interestingly, shelter (housing) costs were the primary driver of M/M inflation, but a study by the San Francisco Fed indicates that trend may become deflationary in the back half of 2024. Producer Price inflation read (PPI) was just above expectations, with core PPI increasing 0.3% M/M and 2.4% Y/Y. Next week, we look forward to retail sales updates. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
August 4, 2023
This week started on a positive note, as Monday saw the highest closing price of the S&P 500 so far this year. That was short-lived, however, as Fitch Ratings downgraded U.S. debt from AAA to AA+. We feel that this downgrade news provides no new information and it should not have a meaningful impact on the bond or stock markets. The bond market reaction was mixed: longer-term Treasury yields moved higher this week, with the 30-year Treasury briefly reaching 4.3%, while the 5-year Treasury yield fell slightly to 4.17%. In the stock market, earnings season continues with over half of the companies in the S&P 500 having reported, and each of the four largest market cap companies beat EPS (earnings per share) expectations. In other news, we received the monthly jobs report Friday, which showed 187K jobs being added in July, slightly below expectations, though the unemployment rate dipped to 3.5% (both below expectations and the June level of 3.6%). Crude oil moved higher again this week to approximately $83/barrel, its highest level in nearly four months. Next week, we will be watching readings on consumer credit, inflation measures CPI and PPI, and consumer sentiment. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Fund Specialist
July 28, 2023
The S&P 500 hit a new year-to-date high this week, but remains about 5% below all-time highs, excluding dividends. This week’s economic and inflation reports were generally positive, while the Fed raised its overnight lending rate by 0.25% to a range of 5.25-5.50%. Q2 earnings season is in full swing, with over half of all companies in the S&P 500 having reported results. Earnings are down year-over-year, but this was widely expected, and the rate of earnings “surprises” is slightly above average. The first read on Q2 GDP was better than Q1: 2.4% growth was better than 2.0% expected and 2.0% in Q1. Friday’s update on inflation, core PCE, was 4.1%, which was better than expected and better than last month’s reading of 4.6%. Weekly jobless claims were 221k, the lowest since February, and a consumer confidence reading for July was higher than expected. The Fed rate hike happened Wednesday, as expected, which now puts it above the 5.25% peak of 2006/07 but below the 2000/01 peak of 6.5%. Fed Chairman Powell said they will make data-driven decisions on a meeting-by-meeting basis. Most investors currently believe that no further rate changes will occur this year. Oil touched $80 per barrel for the first time in over 3 months. Aside from corporate earnings, next week we will be watching the ISM services report on Thursday and the monthly jobs report on Friday. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
July 21, 2023
The market ended this week up slightly, returning around 1% as we received several economic readings and corporate earnings reports. In the economy, manufacturing, U.S. retail sales, business inventories, and home builder confidence all came in better than expected while housing starts/permits were below consensus expectations. Jobless claims were lower than the prior week and softer than anticipated. This strength in the job market could mean the economy is not cooling as quickly as needed to combat inflation, resulting in additional rate hikes from the Fed. Many investors are looking towards the Fed’s policy decision on interest rates next week, which is most likely to include a 0.25% rate hike and would bring the range to 5.25-5.50%. This would be above the peak of the 2006/07 level and the highest since 2001. Next week, we are also looking forward to an advanced reading on GDP, the Personal Consumption Expenditures (PCE) and core PCE index, personal income/spending, and consumer confidence and sentiment. In case you missed it, please check out our new Investment Quarterly Keynote video from Ryan Johnson, CFA, CFP® as he discusses investment highlights of the second quarter and the year so far: https://vimeo.com/846383045. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Fund Specialist
July 14, 2023
After taking a short breather last week, the S&P 500 returned to market rally territory this week, with the key driver being the Wednesday CPI data. The headline year-over-year consumer inflation number came in at 3.0%, just under consensus and much closer to the Fed’s overall inflation target of 2%. Stocks moved broadly higher on the cooling inflation data. Earnings season kicked off this week, with many bank stocks reporting. Consumer sentiment also provided a boost, with the survey reporting a surprise reading of 72.6 (consensus was for 65.5) in June. Treasury yields moved lower on the inflation data, with the 10-year moving down to 3.82% from last week’s highs of over 4%. Despite the positive data pointing toward slowing inflation, the Fed continues to signal intent to hike rates by 0.25% at the end of the month. Next week, earnings reports continue as Netflix, Tesla, Johnson & Johnson, and Taiwan Semiconductor are all set to report. On Tuesday, retail sales for the month of June will be released along with the U.S. homebuilder confidence index. The U.S leading economic indicator report will also be released for June. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
July 7, 2023
The S&P 500 was down slightly for the week, as volumes and volatility were both lower than usual due to the early market close on Monday and markets being closed Tuesday in observance of Independence Day. Markets sold off a bit on Thursday as the ADP jobs report came in much stronger than expected, yet recovered somewhat on Friday as the monthly jobs report came in positive, but below expectations. National unemployment improved slightly to 3.6%. The net impact of the reports has moved the probability of a 0.25% rate hike at the July 26 Fed meeting to more than 90%. The odds of a second 0.25% rate hike are currently less than 40% through the end of the year, but the Fed has indicated that incoming data will continue to be monitored as it weighs future rate decisions. Next week will kick off earnings season where companies will report on results from the second quarter of the year. We will also be watching announcements for Consumer Price Index levels on Wednesday and Producer Price Index levels on Thursday. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
June 30, 2023
The S&P 500 increased by over 2% this week, helped by stronger than expected economic data. First quarter GDP of 2% came in higher than 1.4% expected growth. Personal Consumption Expenditures (PCE) were in-line and Core PCE (a measure of inflation) increased by less than expected. Weekly jobless claims of 239,000 were well below the 4-week moving average (positive signal). Fed Chair Jay Powell stated most U.S. policy makers see two or more rate hikes ahead. The probability of a 0.25% hike in July increased from 74% earlier this week to about 87%. Bank stocks outperformed Thursday after the annual Fed stress test showed all lenders in the assessment have sufficient capital to survive an economic downturn. Durable goods orders in May increased +1.7% despite expectations for a decline, with core durable goods orders coming in at +0.6%. Consumer Confidence marked the first time since January 2022 that a higher percentage of consumers expected higher stock prices than lower stock prices. Next week, we look forward to unemployment and ISM Manufacturing data. As a reminder, the stock market will close at 1pm Monday and be closed Tuesday in observance of Independence Day. We hope everyone enjoys a safe holiday weekend. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
June 23, 2023
The market finished down about 1% as the Federal Reserve was the main focus of the week. We saw profit-taking towards the end of the week, specifically in the technology-heavy NASDAQ, as traders digested the commentary from Fed Chair Jerome Powell. He commented that the central bank is likely to raise interest rates at least two more times this year as inflation continues to remain sticky in some areas of the economy. The odds of a 0.25% Fed hike on July 26th were recently 74%. Two additional rate hikes would put the fed funds target rate to 5.50%-5.75% this year, up from the current 5.00%-5.25%. In other news, housing starts and permits were stronger than expected and higher than prior readings. Existing home sales were slightly better than expected, and jobless claims for the week came in at 264K, the same as the previous week. Due to worries about China's demand falling short of predictions, the Energy sector remains weaker compared to the overall market, while the price of oil remains volatile at around $70 per barrel. Next week, we look forward to readings on consumer confidence and sentiment, personal income and spending, weekly jobless claims, durable-goods orders, and new home sales. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
June 16, 2023
The stock rally continued this week, with the S&P 500 gaining over 2.5%, to a level not seen since April of 2022. The Federal Reserve did not raise interest rates on June 14th. This pause was the first time rates were unchanged after 10 straight hikes since March of last year, which saw short-term rates increase by a total of 5%. The Fed kept the door open for future rate hikes in case inflation is too high, with the next announcement set for July 26th. Of the 12 voting members, 2 forecast keeping rates unchanged, 4 favored one more rate hike this year, while 6 favored two more hikes. With inflation expected to continue to decelerate, we do not see the need for the Fed to hike any further. Still, futures recently put the odds of a 0.25% hike on July 26th at 74%. This week’s update on consumer inflation (CPI 4.0%) showed an improvement from the previous reading of 4.9% and producer inflation (PPI 1.1%) showed an improvement from the previous reading of 2.3%. Next week, we will be watching updates on the housing market. Also, markets will be closed on Monday in observance of Juneteenth. The next market holiday is the Fourth of July. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
June 9, 2023
The S&P 500 finished the week modestly higher as the specter of the debt ceiling on the markets was officially lifted with the signing of the bill occurring this past weekend. The move officially marked the end of the bear market, as Thursday’s closing level of 4293.93 was 20% above the closing low set in mid-October of last year. Bond yields moved slightly higher this week, with the 10-year moving up to 3.74%. Volatility continues to trend lower, with the VIX level now below 14 for the first time since the start of the pandemic. Low volatility is typically coincident with a steadily-rising market environment. Economic data this week included a slightly weaker-than-expected ISM Services index release of 50.3 (down from 51.9) and higher jobless claims of 261,000. The jobless claims were above consensus estimates of 235,000, a signal that labor markets may be starting to tighten. Next week, we will be watching a busy week of economic data. May inflation numbers will be released ahead of the Federal Reserve’s June meeting, with CPI data being released on Tuesday morning, and PPI data released on Wednesday ahead of the rate announcement and Fed Chair Jerome Powell’s press conference. Futures markets predict roughly a 73% chance of no Fed rate hike, which would be the first pause since hikes started in March of last year. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA, MBA
Portfolio Manager & Research Analyst
June 2, 2023
With the debt ceiling crisis over, the market’s focus is back on the Federal Reserve and whether or not they will hike rates by 0.25% again on June 14th. Currently, we expect a pause even though the futures markets put the odds of a pause at 71%. If the Fed pauses, it would end the streak of 10 straight hikes that saw the Fed Funds rate increase from 0.08% in mid-March of last year to 5.08% currently. Through May 31st, the S&P 500 gained 9.6%, while the Dow Jones Industrial Average only gained 0.3%. The Tech-heavy Nasdaq Composite is up 24.1% this year, as the Nasdaq outperformed the Dow by over 9% in May alone. Positive performance came from the largest companies, as the top 10 stocks in the S&P 500 comprise over 30% of the index and account for all of the gain in the index this year. Even though the S&P 500 is up about 10% year-to-date, 8 of 11 sectors have a negative return. Friday’s monthly jobs report was strong, showing 339k jobs were added in May, while the unemployment rate increased from 3.4% to 3.7%. Economists were surprised once again, as this was the 14th straight month that the jobs added were higher than the average economist estimate. Next week, we will be watching the ISM Services report, which so far has continued to show growth in the services portion of the economy, unlike the manufacturing part of the economy, which remains in contraction. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
May 26, 2023
The tech-heavy Nasdaq index surged Thursday following blowout results and guidance from chipmaker Nvidia. Momentum carried into Friday helping the broader-based S&P 500 index finish the week up 0.3%. Friday’s economic reports included durable goods orders and consumer spending both increasing month over month, a signal that economic conditions are still trending upwards. Personal consumption expenditures (PCE) for April also came in slightly higher than expected. With this being a favored metric for the Federal Reserve, the odds of another 0.25% interest rate hike in June increased to 65%. Negotiations continue in Washington D.C. as lawmakers work on a potential 2-year deal to raise the debt ceiling ahead of a June 1 default deadline. Next week we will be watching the monthly jobs report, where unemployment is expected to remain historically low. As a reminder, U.S. markets will be closed on Monday in observance of Memorial Day. We hope you have a happy and safe Memorial Day weekend and if you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
May 19, 2023
The S&P 500 had a positive 1.6% return this week as it reached a fresh year-to-date high. Furthermore, the tech-heavy Nasdaq 100 reached a new 52-week high. Helping the markets was positive news Wednesday that lawmakers agreed a deal will eventually be reached to raise the debt ceiling. Also on Wednesday, regional banks rallied after Western Alliance’s (WAL) improved deposit results showed signs of improvement from turmoil faced over the last several months. Fed Chair Powell spoke on the tight credit availability, lowering the likelihood of additional Fed Funds rate hikes. The Fed Funds rate (5%-5.25%) is expected to remain unchanged over the coming months, and there is a market expectation for a rate cut towards the end of the year. April retail sales increased slightly after declining in March, industrial production data was positive, and housing data seemed somewhat mixed. Next week we will be watching consumer and housing data. Check out our new video from Lance Steiner, CFP® as he shares insights on Social Security funding and payments, filing strategies, and considerations prior to filing for benefits: https://vimeo.com/channels/buckinghamvideolibrary. Thank you and have a great weekend.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
May 12, 2023
The market ended slightly lower this week as first-quarter earnings season comes to a close. Overall, the results have been soft and guidance has been slightly disappointing. The Nasdaq Composite (a very technology-heavy index with approximately 3,000 holdings) reached bull-market status on Monday (+20% above its closing low), making it the second major market benchmark to regain this status. On the other hand, we saw additional weakness in the financials sector, specifically banks, as more bad news surrounded regional lender PacWest Bancorp, raising concerns about a liquidity crunch at the bank and other regional banking peers. In economic news, we received inflation data at the consumer level, core/non-core CPI (both +0.4% month-over-month), and at the producer level, core/non-core PPI data (both +0.2% month-over-month) for the month of April, both of which displayed signs that inflation is continuing to slow. Weekly initial jobless claims came in higher than the previous week at 264,000, which was the highest level since October 2021 - indicating that demand in the labor market is slowing. Next week, we look forward to readings on U.S. retail sales, industrial production, housing, and U.S. leading economic indicators. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
May 5, 2023
The S&P 500 declined less than 1% this week, as positive reactions to earnings reports were more than offset by weakness in the Financial and Energy sectors. The shares of many regional banks sold off after last weekend’s failure of First Republic (FRC), which was mostly taken over by JPMorgan. Oil was down over 10% during the week, before rising back above $70 per barrel on Friday. For Q1 earnings, a slightly higher than usual number of companies beat estimates, but overall earnings are lower than a year ago. Q2 is also expected to show lower earnings than Q2 2022, followed by year-over-year growth in Q3 and Q4. Overall, very little growth is expected in 2023. One big mover was Apple, as its gain of over 2% this week represented a market cap increase of over $50 billion. As expected, the Federal Reserve increased its overnight lending rate by 0.25% to a range of 5-5.25%. Fed Futures indicate rates may stay steady at the June 14th and July 26th meetings. ISM Manufacturing remains in contraction territory while ISM Services remains in expansion territory. Friday’s monthly jobs report showed a better unemployment rate of 3.4%, as 253k jobs were added in April while the prior month’s reading was revised down by 71k. Next week, we will be watching updates on inflation at both the consumer and producer levels. Finally, we would still like to highlight our new video from Allen Thuma, CFA, CFP® as he reveals the key limitations and shortcomings of AI chatbots (such as ChatGPT): https://vimeo.com/channels/buckinghamvideolibrary. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
April 28, 2023
The S&P 500 experienced volatility this week as earnings season continued, with approximately 42% of the S&P 500 market cap reporting earnings. This is to be followed by 24% next week, at which point 87% of market cap will have reported. Notable companies included Facebook parent Meta Platforms, Tech giants Alphabet (Google) and Microsoft, online retailer Amazon, and McDonald’s and PepsiCo on the food and beverage front. Collectively, these stocks help lead the market to a small gain this week. Several economic reports were released this week including a read on first quarter GDP of +1.1% vs. 1.9% expected (down from +2.6% in the final quarter of last year) and the Personal Consumption Expenditures (PCE) Price Index rose 4.9% during the first quarter, compared to 4.4% in the final quarter of last year. Additional focus was seen in the Financials sector as regional bank First Republic Bank reported weak revenues and income as its deposit base experienced further deterioration, while also noting it is pursuing alternatives but may ultimately fail. Following this news, analysts still expect the Fed will raise short-term interest rates by 0.25% to 5.00-5.25% at its meeting next week and then pause. Next week, we look forward to readings on ISM manufacturing and services data, construction spending, and the monthly jobs report. Check out our new video from Allen Thuma, CFA, CFP® as he reveals the key limitations and shortcomings of AI chatbots (such as ChatGPT): https://vimeo.com/channels/buckinghamvideolibrary. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst,
Investment Specialist
April 21, 2023
The S&P 500 traded mostly flat this week as companies continued to release their results from the first quarter. The health of the housing market was the focus this week for economic data. Both housing starts and existing home sales were close to consensus estimates and showed month-over-month and year-over-year declines. Along the yield curve, rates held steady for the week as the odds increased for another 25 basis point rate hike at the May 3rd Fed meeting. Next week promises to be a busy week, as the markets will be focused on a big week for corporate earnings: mega-cap companies Google, Microsoft, Meta, and Amazon are all scheduled to release their quarterly results. We will be watching for economic data on consumer confidence and durable goods orders. On Friday, the release of March inflation data should provide a signal to the markets about how likely the Fed may be to pause rate hikes. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA
Portfolio Manager & Research Analyst
April 14, 2023
The S&P 500 posted modest gains this week despite volatility surrounding key economic factors and fears surrounding corporate earnings. On Wednesday, CPI (consumer price index) readings for March came in lower than expected, and on Thursday, PPI (producer price index) results for March were also lower than forecast. These measures of economic activity, along with retail sales coming in below expectations this week, indicate that Federal Reserve actions to slow inflation are having an impact, and markets are cautiously optimistic about the current interest rate hiking cycle coming to an end within the next couple of months. With positive earnings results Friday for financial stalwarts such as JP Morgan and Blackrock easing investor fears, market participants are breathing easier following the bank failure scares from March. Next week, we will be watching announcements for U.S. building permits and existing home sales. Also, please remember that Federal and most state taxes are due by Tuesday, April 18. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
April 7, 2023
The S&P 500 broke a three-week streak by finishing this week down 0.1% ahead of the Easter weekend. The Tech/Consumer-heavy Nasdaq Composite Index declined by 1.1%. The March jobs report was slightly below expectations and weekly jobless claims ticked up to 228,000. Still, the unemployment rate remained strong at just 3.5%. The odds of the Fed increasing rates by another 0.25% in May increased to about 67% after the jobs report. This pushed Treasury yields higher, with the 3-month yield at nearly 5% and the 10-year yield at 3.4%. OPEC+ announced a surprise addition to oil production cuts that pushed the price of oil over $80/barrel. Next week, we will be watching CPI (consumer price index) and PPI (producer price index) inflation data. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. We wish everyone a happy holiday and safe travels this weekend. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
March 31, 2023
The S&P 500 gained over 3% this week to cap off a positive month and quarter. Three of the eleven sectors drove the gains this quarter: Technology, Communication Services, and Consumer Discretionary. These three sectors currently hold 44% of the weight in the index, led by Technology’s 26% weight. Aside from the very short end of the yield curve, most bond yields fell during the quarter, which corresponded to an increase in bond prices and a positive total return. Friday’s report on the Fed’s preferred gauge of inflation, the Core PCE (Personal Consumption Expenditures) Price Index, was 4.6%, just below expectations of 4.7% and slightly below January’s 4.7% reading. The odds of another Fed hike in either May or June is currently around 50-50. Next week, we will be watching updates on ISM Services and the monthly jobs report, where unemployment is expected to remain low at 3.6%. On Friday April 7, stock markets will be closed in observance of Good Friday, while bond markets are open until noon. The Federal Reserve, whose calendar is followed by most banks, does not take off Good Friday. The next time markets will be closed is Memorial Day. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
March 24, 2023
On Wednesday, the Fed increased its target rate by another quarter percent to a range of 4.75%-5.0%. More importantly, the language from the Fed shifted from “ongoing rate increases will be appropriate to quell inflation” to a more dovish “some additional policy firming may be appropriate”. Current expectations from the Fed are factoring in somewhat lower odds for one more quarter percentage hike in May or June, followed by lower rates next year. The 2-year Treasury further reflects this expectation, as yields have fallen to 3.78% from over 5% just earlier this month. Despite ongoing concern surrounding regional bank liquidity, volatility for the week appeared just slightly above average while the S&P 500 gained over 1%. Positive news for growth potential in A.I. pushed the Tech sector higher. Existing home sales came in stronger than expected at 14.5% month-over-month, but still weaker by almost 23% from this time last year. The data was much better than expected and stronger than January’s reading. After surging to a 670,000 annualized rate in January, new home sales in February fell back to 640,000 (slightly below consensus expectations of 645,000). The job market appears strong with jobless claims at 191,000. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
March 17, 2023
The equity and fixed income markets started and ended the week in a volatile state, but the S&P 500 did gain over 1%. To start, federal regulators moved to protect all the deposits (above the typical $250,000 FDIC limit) at Silicon Valley Bank and Signature Bank, after each experienced a liquidity crunch. This raised concerns over a larger “contagion effect” across the entire financial sector, especially in regional banks. This caused investors to flock into U.S. government bonds as a flight-to-safety, which increased the prices and caused the yield on 2-year Treasuries to experience its largest three-day drop (to 3.75%) since 1987. Given the recent volatility, many traders are now expecting the Fed to be less aggressive in raising interest rates overall and estimate an increase of only 0.25% (if any) in its meeting next week, compared to last week’s expectations of a 0.50% hike. Oil declined again this week and remains below $70/bbl, its lowest level since November of 2021. In more optimistic economic news, both the CPI and PPI indicated a further decline in the inflation rate during February, and housing starts and building permits both came in better-than-expected. Additionally, initial jobless claims came in on a positive note at 192,000, down from the previous week and below the 205,000 consensus. Next week, we look forward to information regarding the Federal Reserve’s interest rate decision and press conference, existing and new home sales, initial/continuing jobless claims, and U.S. services/manufacturing PMI. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
March 10, 2023
The S&P 500 lost 4.5% this week, led by the Financial sector that declined 8.5%. A regional bank index lost 16% and was the weakest part of the Financial sector after two banks, Silvergate Capital (SI) and Silicon Valley Bank (SIVB), failed. Silvergate was heavily involved in the crypto industry and Silicon Valley Bank was heavily involved in the venture capital space; both banks had company-specific issues and saw substantial withdrawals of deposits in recent days and weeks. Neither were part of the group of 34 banks that were subject to the Fed’s annual stress test, all of whom passed in mid-2022. All sectors saw losses this week, as risk was avoided and volatility rose. Treasury bonds, a typical safe haven, saw prices rise and yields drop. While earlier this week the 2-year Treasury yield topped 5% for the first time in many years, it closed the week yielding 4.6%. While the 10-year Treasury yield was over 4% earlier in the week, it closed below 3.7%. Oil declined this week, but remains in the $75-80 range it has been in since November. Friday’s monthly jobs report showed 311k jobs were added in February, above the 223k expected. The unemployment rate rose from 3.4% to 3.6% as the participation rate increased. Next week is heavy with economic updates, including reads on inflation at the consumer and producer levels. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
March 3, 2023
The S&P 500 advanced 1.8% this week, most of which came on Friday after a strong ISM Services Index report. In this report, new orders and employment components rose while an inflation component eased slightly. Otherwise, economic data this week was mixed. On Monday and Tuesday, durable goods orders and consumer confidence both came in below expectations, which continued their downward trend and strengthened the narrative of a potential near-term recession. The ISM manufacturing report met consensus on Wednesday and jobless claims on Thursday were better than expected, signaling continued strength in the U.S. labor market ahead of next week’s monthly jobs report. The housing market continues to see weakness, with 30-year mortgage rates moving above 7% and the Housing Affordability Index moving lower. U.S. Treasuries briefly moved above 4% across the entire range of maturities for the first time since November before coming down slightly to end the week. Next week is all about the health of the U.S. labor market as various indicators are reported on Wednesday, Thursday, and Friday. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Mitch Bodenmiller, CFA
Portfolio Manager & Research Analyst
February 24, 2023
The S&P 500 declined nearly 3% this week, as the expectations of higher interest rates dampened enthusiasm for risk assets. Nearly all sectors declined in the holiday-shortened trading week. The odds of a higher Fed Funds rate by June have increased, with the market now expecting a rate over 5.25%, compared to the current rate of 4.58%. The 10-year Treasury yield rose for the 5th straight week and is once again approaching 4%. Friday’s report on the Fed’s preferred gauge of inflation, the Core PCE (Personal Consumption Expenditures) Price Index, was 4.7%, above expectations of 4.3% and slightly higher than December’s 4.6% reading. In good news for future inflation readings, the price of natural gas briefly dipped below $2 per million BTUs, down nearly 80% from highs 6 months ago, which was a record drop over a 6-month period. This week’s second read on Q4 GDP was 2.7%, slightly below the first reading of 2.9% and next week we will be closely watching updates on both the ISM Manufacturing and ISM Services reports. We recently released a 4-minute video, Where Do Stock Returns Come From? that can also be found at www.mybuckingham.com under Resources – Video Library. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
February 17, 2023
The S&P 500 declined slightly this week after inflation data and employment readings indicated that the economy is still running strong. On Tuesday, Consumer Price Index (CPI) data for January came in stronger than expected, thus adding fuel to the argument that the Federal Reserve will continue to increase interest rates in its attempt to slow the pace of growth in the economy. While the market seemed to largely shrug off this report and grind steadily higher through Wednesday’s close, the release of Producer Price Index (PPI) data and unemployment data on Thursday sent indexes lower. PPI, a measure of the change in prices that producers receive for their output, reflected a slowdown from December but was higher than consensus expectations. Weekly jobless claims, generally a representation of the number of layoffs in the U.S., declined week-over-week and marked the fifth straight week with claims under 200,000. Strength in the job market indicates that ongoing demand is solid, thus employers are not seeing a need to reduce headcount. Based on these and other factors, the market is now pricing in a 0.25% increase in interest rates in March, and another 0.25% increase in May. Remember that U.S. markets will be closed on Monday in observance of Presidents’ Day. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Jim Brown, CFA, MBA
Senior Portfolio Manager & Research Analyst
February 10, 2023
The S&P 500 declined just over 1% this week. In a reversal of last week, only the Energy sector gained, while the Communications sector lagged the most. Alphabet (ticker GOOG), the parent company of Google, unveiled its Artificial Intelligence (AI) powered chatbot called Bard a day after Microsoft held a press event showing off its integrations of ChatGPT into its Bing search engine and Edge web browser. Both Bard and the new Bing should be available for broader use in the coming weeks. GOOG had a strong performance after earnings last week, but sold off this week, explaining part of the Communications sector decline. Chinese search and e-commerce companies such as JD.com, Baidu, and Alibaba are also planning on releasing AI-powered chatbots soon. Treasury yields rose across the curve, with increases from 0.1% to 0.25% as more Fed rate hikes are becoming priced into the market. Next week we expect readings on consumer inflation and producer inflation to continue to show improvement on a year-over-year basis, though the monthly readings will be affected by higher gasoline prices seen in January. About 70% of major companies have reported earnings - the overall sales and earnings “beat” rates continue to be below average, though stocks have generally increased during earnings season, in part because sentiment was fairly low ahead of time. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
February 3, 2023
The S&P 500 rose again this week and is up nearly 8% so far in 2023. This week’s rally was led by the Communication and Technology sectors, while the Energy sector lagged. Stocks sold off 1% on Friday, however, after a very strong monthly jobs report increased concerns that the Fed might continue on its path of interest rate hikes for longer, which would further slow the economy. 517,000 jobs were added in the month of January, lowering the national unemployment rate to 3.4%, the lowest in over 50 years. The jobs number was well above expectations and may have been affected by seasonal adjustments. On Wednesday, the Federal Reserve raised the overnight lending rate by 0.25%, as expected, to a range of 4.5-4.75%. The strong jobs report seemingly solidified the chance of a Fed hike on March 22nd and increased the odds of yet another rate hike in May to more than 50-50. The ISM Manufacturing report stayed in contraction territory, but the ISM Services report surprised to the upside into growth territory. About half of major companies have reported fourth quarter results and earnings season continues to be below average. At the market level, earnings are expected to grow very little this year, with Q1 and Q2 showing year-over-year declines before growth resumes in the second half of the year. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
January 27, 2023
This week, the S&P 500 gained about 2.5%, despite a below-average earnings season, as economic reports beat expectations. With about 30% of companies reporting so far, the number of companies beating sales and earnings expectations are running below 5-year and 10-year averages. This week’s first read on fourth quarter GDP was 2.9%, slightly above expectations but below last quarter’s 3.2% growth. Weekly jobless claims improved again and the 4-week moving average dipped below 200k for the first time since September. Next week, it is widely expected that the Federal Reserve will hike its overnight lending rate by 0.25% to a range of 4.5-4.75%. The Fed is also expected to follow with another 0.25% hike on March 22nd. The 3-month Treasury yield continues to hover around 4.5% and the 10-year Treasury yield continues to hover around 3.5%. The most inverted the yield curve has reached so far was 1.15%, which occurred last week. Next week is heavy with economic updates including ISM Manufacturing, ISM Services, and the monthly jobs report. If you have a friend or family member who could benefit from our financial planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
January 20, 2023
This week, the S&P 500 declined 0.7%. Earnings season is still ramping up, with just over 10% of companies reporting so far and they have shown an aggregate decline in earnings from a year ago. The number of positive earnings “surprises” are running below average. In the good column this week, an inflation report and weekly jobless claims were better than expected. The year-over-year Producer Price Index (PPI) was 6.2%, which was below expectations and a drop from the 7.4% reading a month ago. Excluding food and energy, the inflation reading dropped to 5.5% from 6.2% previously. Jobless claims improved, sliding below 200k for the first time since September. In the less than good column this week, retail sales in December declined 1.1%, which was slightly below expectations. Housing starts and permits, an indication of future activity, slowed about as expected, while builder sentiment actually improved. Next week, will be watching additional earnings reports as well as the first read on fourth quarter GDP. To view our latest articles including the monthly Market Insights, Fraud and Scam Updates, and Secure Act 2.0 Impacts, please click here: https://mybuckingham.com/insights. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
January 13, 2023
This week the S&P 500 posted a gain of over 2.5% on encouraging inflation data. The highly anticipated CPI (Consumer Price Index) report on Thursday was in-line with recently lowered expectations. Month-over-month, headline inflation decreased 0.1% (in large part due to lower gas prices) while the “core” reading (excluding food and energy) increased 0.3%. Year-over-year, headline inflation increased 6.5% while core inflation increased 5.7%. The year-over-year figures continue to decelerate. What all of this means is, it is increasingly likely that the Fed will raise rates by only 0.25% on February 1st, again on March 22nd, and be done at that point with the Fed Funds rate just below 5%. Longer-term interest rates continue to cool, with the 10-year Treasury yield around 3.5%, and mortgage rates continue to slowly decline, with an average 30-year loan rate falling below 6.5%. In other economic reports this week, weekly jobless claims remained low and consumer sentiment improved. Next week, there are several reports to watch on housing, producer inflation, and retail sales for December, not to mention the ramp-up of Q1 corporate earnings reports. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
January 6, 2023
This week the S&P 500 rose over 1% due to the market increase on Friday after a “just right” monthly jobs report, even though the unemployment rate fell to 3.5%. Discerning what the Fed might do next influences sentiment and returns daily. Friday’s job report, which showed slowing wage growth, points to the Fed nearing the end of its rate hike cycle. While the odds still favor 0.25% Fed rate hikes on February 1st and March 22nd, the odds of hikes after that have fallen. This week’s monthly ISM Manufacturing report remained in contraction territory as expected, but we were discouraged by the ISM Services report that slipped into contraction territory for the first time since mid-2020. This gauge fell well below expectations and dropped significantly from a month ago. Next week’s update on the Consumer Price Index, where month-over-month inflation may turn negative and year-over-year inflation is expected to decelerate from 7.1% to 6.5%, will weigh on how the market feels about the Fed’s next moves. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
December 30, 2022
The S&P 500 posted a slight decline for the final week of the year, capping off a down year for stocks. This was the fourth calendar year decline for the S&P 500 on a total return basis in the past twenty years. Treasury yields crept higher for the second week in a row, with 3-month yields around 4.26%, 2-year yields around 4.43%, and 10-year yields around 3.88%. While the price was higher for most of the year, oil closed around $80 per barrel after starting the year around $75. On Thursday, the SECURE Act 2.0 was signed into law, keeping the government funded but also changing several rules in financial planning and taxes including RMDs, Roth IRAs, and 529 plans - you can look forward to our updates on the new rules in the coming weeks. Next week we will be watching the monthly jobs report, with unemployment expected to remain around 3.7%. The markets and our offices will be closed on Monday, January 2nd in observance of the New Year’s holiday. We wish you a very safe and happy New Year!
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
December 23, 2022
This week, the market finished mostly flat heading into the long holiday weekend as we received information on several important economic reports. The third quarter estimate of GDP came in higher than expected at an impressive annualized rate of 3.2%. The PCE (Personal Consumption Expenditures) index for November (closely followed by the Fed), showed month-to-month inflation of 0.1%, better than the 0.3% figure released in October. Even though prices remain elevated, they are showing signs of slowing. Additionally, data reports show that real disposable income increased 0.4% and consumer spending increased 0.1% last month. Housing starts and building permit figures came in lower than the previous month and year-over-year, illustrating the impact of interest rates on the housing market. In other news, we saw positive earnings reports across sectors in the market this week including Nike, which exceeded analyst expectations on margins and global growth, and FedEx, which benefited from the materialization of price increases. Next week, the economic calendar is light but we look forward to reads on pending home sales, U.S. home prices, and initial and continuing jobless claims. The markets and our offices will be closed Monday, December 26th in observance of the Christmas holiday. We wish everyone Happy Holidays and safe travels. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
December 16, 2022
This week, we received information on several important economic reports. November Consumer Price Index (CPI) rose only 0.1% month-over-month or 7.1% year-over-year, and “Core” CPI, an index which excludes the more volatile food and energy prices, increased 0.2% for the month or 6% annualized. The market responded positively to the encouraging data as prices increased less than consensus expectations. The retail sales report showed a monthly decline of 0.6% (vs. a gain in October), a sign that consumers are cutting back on discretionary spending. In highly anticipated news, the Federal Reserve once again increased short-term interest rates by 0.50% (down from the previous 0.75% hike), bringing the federal funds rate to 4.25%-4.50% - its highest level since 2007. Additionally, the Fed increased its federal funds target for 2023 to 5.10%. The market ended the week slightly lower after Chairman Jerome Powell provided commentary for inflation expectations and stated the fed funds rate will likely increase into 2023 and is not likely to decline until 2024. Next week’s economic calendar includes information on housing starts, the consumer confidence index and index of leading economic indicators, the Personal Consumption Expenditures/Core PCE price index, and real disposable income and consumer spending. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Manager & Research Analyst
Investment Funds Specialist
December 9, 2022
The S&P 500 declined over 3% this week, as good economic reports led stock investors to worry about the Fed continuing to raise short-term interest rates, while the price of oil fell about 10% to under $72 per barrel, similar to where prices were a year ago. On Monday the latest read on the services portion of the economy showed better-than-expected growth that was also higher than the prior reading. Consumer sentiment improved, with higher readings for both the current conditions and expectations components. Producer Price Inflation was 7.4%, above expectations but below the prior month’s reading of 8.0%. The 10-year Treasury yield rose slightly after stabilizing around 3.5% and the 3-month Treasury yield declined on a weekly basis for only the second time since March, with a yield of 4.17%. Next week we will be watching the Consumer Price Index with an expected headline inflation level of 7.3%. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
December 2, 2022
The S&P 500 posted a 1.1% gain this week, after comments from Fed Chairman Jerome Powell sparked a rally on Wednesday. He all but said that the Fed would raise rates by 0.5% on December 14th, but again noted the Fed is not close to being done raising rates and that they expect to keep rates elevated for a considerable amount of time. As of November 30th, the Dow Jones Industrial Average entered a new bull market, having rallied 20.4% from its low closing price on September 30th. Longer-term Treasury yields continued to drift lower and volatility, as measured by the VIX index, had a weekly close below 20 for only the fifth time this year. Friday’s monthly jobs report was stronger than expected, with national unemployment staying at 3.7%. The ISM report on manufacturing, however, slipped into contraction territory for the first time since 2020. Next week we will be watching additional manufacturing updates, including a report on producer price inflation (PPI). The “Year End Wrap-up & Thoughts for the Year Ahead” webinar is at 1pm ET on Tuesday December 6th. Please register here https://mybuckingham.com/events/year-end-wrap-up-and-thoughts-for-the-year-ahead. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 25, 2022
The S&P 500 gained 1.5% during the holiday-shortened week and the Dow Jones Industrial Average closed at its highest level since April. Notes from the Fed’s November 2nd meeting were released, which seemed to further solidify the chance that the next rate hike in mid-December will be 0.5%. Longer-term Treasury yields continued to drift lower and volatility, as measured by the VIX index, declined to its lowest level since August. On Monday the price of oil dipped to just over $75 per barrel, nearly a 2022 low, after the Wall Street Journal reported that Saudi Arabia was considering a production increase. Prices rose later in the day, however, as the report was denied. Still, oil prices declined for the third straight week. Next week we are watching a manufacturing report on Thursday that may show contraction but also the monthly jobs report on Friday that is expected to show jobs being added to the economy and still low unemployment. Our next webinar is “Year End Wrap-up & Thoughts for the Year Ahead” at 1pm ET on Tuesday December 6th. Please register here https://mybuckingham.com/events/year-end-wrap-up-and-thoughts-for-the-year-ahead. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 18, 2022
This week the S&P 500 posted a relatively modest move, declining 0.7%, as the defensive sectors outperformed. It was a relatively calmer week for markets, with the moves in interest rates, currencies, and stocks being much smaller than what has been seen over the past several weeks and months. The price of oil, however, fell about 10% this week on lowered demand expectations, in part due to China’s continued COVID lockdowns. The Producer Price Index (PPI) inflation report showed inflation growing less quickly than expected and growing less quickly than the prior month. The PPI report for October showed headline year-over-year inflation of 8.0%, compared to the prior month’s 8.5% reading. The housing market continues to feel pressure from higher mortgage rates, with new home starts and permits falling by 8.8% and 10.1% from a year ago, respectively. The inventory of existing homes for sale remains tight and while the median home price is still higher than a year ago, the volume of sales in October dropped 5.9% from September and dropped over 28% from a year ago. We wish you all safe travels next week for Thanksgiving; the markets will be closed on Thursday and will close early at 1pm on Friday. Our next webinar is “Year End Wrap-up & Thoughts for the Year Ahead” at 1pm ET on Tuesday December 6th. Please register here https://mybuckingham.com/events/year-end-wrap-up-and-thoughts-for-the-year-ahead. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 11, 2022
Thank you Veterans, we are grateful for your service. This week the S&P 500 gained over 5%, nearly all of which came on Thursday after a better-than-expected inflation report. The Consumer Price Index showed inflation growing less quickly than expected and growing less quickly than the prior month. The report for October showed headline year-over-year inflation of 7.7%, compared to the prior month’s 8.2% reading. The core reading, which excludes food and energy prices, increased 6.3% year-over-year, which improved from the prior reading of 6.6%. This led to a sentiment shift about the path of future Fed rate hikes, with market participants hoping that fewer hikes will come to fruition. 2-, 5-, and 10-year Treasury yields fell by about 0.3% and the Technology sector led the stock rally with a 10% gain. Next week we are watching the update on the Producer Price Index as well as several housing data points. Once again Buckingham Big Hearts is supporting Toys For Tots and we are accepting donations through December 7th https://mybuckingham.com/about/buckingham-big-hearts. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
November 4, 2022
As expected, the Federal Reserve raised short-term interest rates by 0.75% on Wednesday to a range of 3.75% to 4.0%. While the Fed hinted at slowing the pace of hikes and possibly raising by 0.5% at each of the next two meetings (December 14th and February 1st), they also noted the ultimate stopping point will be higher than previously expected. Compared to previous expectations, the Fed may now raise rates at a slower pace for longer, slow down the economy for longer, and be slower to reverse course. After weeks of strong gains, the S&P 500 declined 3.3% this week, with the downside being led by the Technology and Communications sectors while the Energy and Materials sectors posted gains. The monthly jobs report on Friday continued to show strength with 261k jobs being added in October and September’s report was also revised higher by 52k jobs. This week’s reports on the manufacturing and services portions of the economy both showed growth, but at a slower pace than previous reports. While the 3-month Treasury yield is currently around 4.1% and ultimately headed higher when the Fed raises rates, the 2-year Treasury yield is 4.66%, 5-year 4.33%, and 10-year 4.17%. When short-term rates are higher than long-term rates, this is known as an inverted yield curve. An inverted yield curve, often, but not always, precedes a recession. Once again Buckingham Big Hearts is supporting Toys For Tots and we are accepting donations through December 7th https://mybuckingham.com/about/buckingham-big-hearts. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact. Thank you.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
October 29, 2022
The S&P 500 posted another strong gain this week, increasing nearly 4%. From this month’s intraday low on the 13th to the intraday high on the 28th, the market gained over 11%. Yields drifted lower this week, with the 10-year Treasury yield ending just over 4%. Due to higher mortgage rates, home activity has slowed. A report this week showed the largest month-over-month decline in average home prices (-1.3%) seen in over a decade. On the other hand, this week’s first read on Q3 GDP came in slightly higher than expected at 2.6%. Compared to last quarter, when GDP was -0.6%, the largest changes came from lower services consumption and lower residential investment being more than offset by improvements in inventories and lower imports. Lastly, the IRS announced increased limits on 401(k) and IRA contributions in 2023: $22,500 and $6,500, respectively, plus catch-up contributions if you are age 50 or older. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
October 21, 2022
This week the S&P 500 gained over 4.5%, driven by Fed commentary and corporate earnings reports. So far approximately 20% of companies have reported quarterly results. Many more are scheduled to report next week, including the top 5 stocks in the S&P 500, which make up over 20% of the value of the index. Bond yields continued to rise (bond prices continued to fall) as we approach the early November Fed meeting. However, on Friday the Wall Street Journal reported that some Fed officials “have begun signaling their desire to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy.” This sent bond yields lower and stock prices higher on Friday. In this week’s economic calendar, industrial production was positive and better than expected, while weekly jobless claims also improved from the prior reading. The Leading Indicators index, however, declined and went further into negative territory on a year-over-year basis, which has been coincident with previous recessions. Next week we look forward to the first read on Q3 GDP, which is expected to be positive, unlike the first two quarters, and there are many updates on the health and sentiment of consumers. This coming Tuesday we are hosting a special virtual event called Achieving Balance: Managing Stress During Your Career and Throughout Retirement, with keynote speaker Dr. Travis Parry. This live webinar will be on Tuesday October 25 from 6-7pm. Please register here and send the link to someone you know who may be interested: https://mybuckingham.com/events/parry.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
October 14, 2022
This week the S&P 500 declined over 1%. After touching a new year-to-date low on Thursday, stocks rallied over 4% from the open to the close during the day. This was after a consumer inflation (CPI) update that showed headline inflation of over 8%. Along with a producer inflation (PPI) report that also showed headline inflation of over 8%, the odds point to another 0.75% Fed interest rate hike in about three weeks. This will continue the Fed’s fastest rate hike cycle in the past 40 years. Market participants, however, are hoping for a Fed “pivot” – a time when they will not be raising rates so quickly and eventually, stop raising rates altogether. There are some signs that inflation could be slowing, including the year-over-year prices of shipping ocean freight, used cars, and oil. We are soon hosting a special virtual event called Achieving Balance: Managing Stress During Your Career and Throughout Retirement, with keynote speaker Dr. Travis Parry. This GoTo Webinar will be on Tuesday, October 25 from 6-7pm. Please register here and send the link to someone you know who may be interested: https://mybuckingham.com/events/parry.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
October 7, 2022
This week the S&P 500 increased about 1%, with a strong market rally early in the week being balanced by a selloff on Friday. Energy led the market higher this week, with OPEC+ announcing a cut in production in response to weakening oil prices. Real estate and Utilities lagged the market on interest rate pressures, as investors continue to watch for economic data that would indicate a slowing of the Fed’s aggressive monetary policy. A weaker than expected manufacturing index on Monday and higher jobless claims on Thursday gave some hope that the economy is starting to slow enough for the Fed. However, on Friday a strong jobs report showing 3.5% unemployment sent markets down on concerns that the Fed may continue with aggressive rate hikes. Next week the markets will be watching the September CPI report for any evidence that inflation pressure is easing as well as the consumer sentiment reading on Friday. We are excited to announce a special virtual event called Achieving Balance: Managing Stress During Your Career and Throughout Retirement, with keynote speaker Dr. Travis Parry. This GoTo Webinar will be on Tuesday, October 25 from 6-7pm. Please register here and send the link to someone you know who may be interested: https://mybuckingham.com/events/parry.
Mitch Bodenmiller, CFA
Portfolio Manager & Research Analyst
September 30, 2022
This week the S&P 500 declined nearly 3%, capping off an up-then-down quarter that resulted in about a 4% loss. This year’s sell-off has been the longest since 2011 and there have been few places to hide, as the aggregate bond index and gold were down even more than the S&P 500 during the third quarter. On a positive note, this week’s unemployment claims dipped to the lowest level since May and this likely sets up a decent monthly jobs report next Friday. However, this gives the Fed room to continue raising rates, with another hike likely in early November. Higher interest rates are among the multiple factors that have pressured stocks. Treasury yields reached new multi-year highs this month, with 2-, 5-, 10-, and 30-year bonds currently yielding around 4.2%, 4.1%, 3.8%, and 3.8% while even 3-month Treasuries are yielding around 3.3%. The final read on Q2 GDP released this week was unchanged at -0.6% and next week’s economic calendar is heavy with updates. Investor sentiment, as measured by the AAII (American Association of Individual Investors) survey, is extremely bearish. While readings this poor have happened only a handful of times in the past 35 years, the average 3-, 6-, and 12-month forward returns have been well above average. We are excited to announce a special virtual event called Achieving Balance: Managing Stress During Your Career and Throughout Retirement, with keynote speaker Dr. Travis Parry. This GoTo Webinar will be on Tuesday October 25 from 6-7pm. Please register here and send the link to someone you know who may be interested: https://mybuckingham.com/events/parry.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
September 23, 2022
Stocks finished lower again this week with the Dow Jones Industrial Average intraday levels crossing into bear market territory on Friday. Stocks fell mainly due to commentary following the Fed meeting which included a third-consecutive hike of 0.75% in short-term interest rates. This brings the overnight lending rate to 3.00-3.25% as the central bank reiterated its intentions to aggressively fight inflation. Rate hikes are expected to continue near-term with Fed Chair Jerome Powell stating, "We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%”. However, as stocks continue to remain under pressure, valuations appear more attractive on a 3- to 5- year basis. Jobless claims rose slightly last week yet remain below the four-week moving average. All 11 S&P sectors are lower on Friday with Energy being the weakest as oil prices fell around 6% to below $80 a barrel, marking an 8-month low. Next week, we look forward to initial and continuing jobless claims, a read on consumer confidence, real GDP revision, personal consumption expenditures (PCE), real consumer spending, and disposable incomes. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Manager & Research Analyst Investment Fund Specialist
September 16, 2022
The market declined about 5% this week (after a 3.5% increase last week), with most of the move coming from Tuesday’s 4.3% drop. Tuesday’s move was the result of higher-than expected consumer price inflation (CPI) data opening the door for more aggressive interest rate hikes by the Fed. Producer prices (PPI) came in as expected while jobless claims came in better than expected. The 10-year Treasury yield reached fresh highs of 3.49% before falling back to about 3.45%. Encouragingly, U.S. railroad companies reached a tentative deal with workers avoiding a strike and rail shutdown. Next week, we look forward to the Fed rate decision where expectations are for another 0.75% interest rate hike to combat inflation and cool the economy. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Allen Z. Thuma, CFA, CFP®
Senior Portfolio Manager & Research Analyst
September 9, 2022
The S&P 500 gained over 3.5% this week, more than reversing last week’s loss. Stocks and other risk assets rallied despite the increasing odds of a 0.75% Fed hike on September 21st. Stocks rallied on lower oil prices and other signs that inflation may be moderating. Accordingly, travel-related stocks led and while the Energy sector gained, it lagged the overall market. Weekly jobless claims improved again this week and the ISM Services Index was higher than last month and the report was well into growth territory. This continues the recent trend of positive economic reports. Next week there will be important updates on consumer and producer inflation, as well as consumer sentiment and industrial production. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
September 2, 2022
The S&P 500 declined over 3% this week on continued negative sentiment from the Fed’s tough stance on inflation. On Friday, stocks initially rose on a “goldilocks” monthly jobs report that saw a higher headline unemployment number but also higher participation. 315k jobs were added and national unemployment rose from 3.5% to 3.7%. The participation rate (those in the workforce) rose 0.3% from last month and average hourly earnings rose 5.2% from a year ago. The jobs report was initially considered “just right” by the stock market because the Fed has a dual mandate of full employment and modest inflation. If unemployment starts to rise, that may temper the Fed’s need to increase interest rates. If the Fed increases rates by 0.75% on September 21, the target rate would be just over 3%. For now though, recent economic reports still look good. Tuesday’s consumer confidence report increased from the prior reading and Thursday’s ISM Manufacturing Index also improved and stayed in growth territory. Next week we are looking forward to a holiday-shortened trading week and we hope you have a fun and safe Labor Day weekend. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
August 26, 2022
The S&P 500 declined over 3% on Friday, giving up the prior gains for the month of August. Stocks sold off due to concerns of higher Fed Funds rates in the near-term, combined with the Fed maintaining those rates for longer than previously hoped. This week Federal Reserve members met in Jackson Hole, WY. Friday’s press conference with Chairman Powell left the stock market feeling cold about the Fed being too aggressive in its attempt to bring down inflation. Market rates for short-term Treasury bonds rose this week and it seems increasingly likely that short-term rates (3-month Treasury yield is 2.75%) will be higher than long-term rates (10-year Treasury yield is 3.03%) in the near future. When this happens it is known as an inverted yield curve, which often, but not always, precedes a recession. On Thursday, the second read of Q2 GDP improved from the first reading, but was still negative at -0.6%. Housing data remains weak while the relative bright spot this week was slightly lower inflation, with core PCE at 4.6% compared to last month’s reading of 4.8%. Next week we look forward to the monthly jobs report as well as an update on the manufacturing segment of the economy. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
August 19, 2022
This week the S&P 500 declined just over 1%, the 10-year Treasury yield crept higher to nearly 3%, the U.S. dollar strengthened back towards multi-year highs, and cryptocurrencies generally declined by more than 10%. Consumer companies, such as Home Depot and Wal-Mart, beat lowered expectations this week, posting positive same-store-sales results for the second quarter. Broad retail sales for the month of July were reported to be the same as the month of June, but a bit higher when excluding vehicles and gas. Weekly jobless claims declined (improved) this week to 250k new applicants and the 4-week moving average declined for the first time since April. Linda Parenti, CFA, discussed recently passed legislation and a possible peak in inflation in our latest monthly Market Insights: https://mybuckingham.com/insights/august-2022-market-insights. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
August 12, 2022
The S&P 500 gained for the fourth week in a row, increasing another 3% this week. Volatility, as measured by the VIX index, closed below 20 for the first time in over 4 months and the Nasdaq Composite Index is now up over 20% from its mid-June low. Stock market participants were excited by tamer-than-expected inflation data, which in turn may reduce the pressure on the Fed to raise rates by 0.75% again in late September. The headline Consumer Price Index increased 8.5% (Core CPI 5.9%) from a year ago, below expectations of 8.7% (and 6.1%). This week, however, crude oil and wholesale gasoline gained over 5% after reaching 6-month lows of $87/bbl and $2.76/gal last week. Next week we look forward to several consumer-based updates, both from broad economic indicators as well as from quarterly reports from companies such as Home Depot. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
August 5, 2022
The S&P 500 had a small gain for the week with lower volatility. Interest rates rose, mostly on Friday, after a surprisingly strong jobs report. Four weeks ago we pondered whether or not we had seen unemployment reach its best levels. Despite a slow and steady increase in weekly unemployment claims, Friday’s monthly jobs report was much stronger than expected. 528k jobs were added in July, bringing unemployment down to 3.5%, matching a pre-pandemic low. Average hourly earnings increased 5.2% from a year ago. Also this week the ISM Services report was stronger than expected, increasing compared to a month ago. Q2 corporate earnings reports are also generally being reported ahead of expectations. While on one hand these are good indications that the economy is not currently in a recession, on the other hand it has increased the odds of more Federal Reserve interest rate hikes. While the odds change frequently, right now the futures market sees another 0.75% increase in the Fed Funds rate on September 21st. Next week we will get fresh updates on consumer and producer inflation, which may help provide further clues as to how aggressive the Fed might need to be in the coming months. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
July 29, 2022
The S&P 500 gained more than 4% this week, capping off a very strong month with a return of over 9%. This is despite the Federal Reserve again raising short-term interest rates by 0.75% on Wednesday and despite Thursday’s negative read on second quarter GDP, which was -0.9%. GDP for the first quarter was -1.6%. Having two consecutive quarters of negative GDP marks an unofficial sign of recession, though the second quarter figure could be revised later. Still, unemployment remains historically low and corporate profits have grown from a year ago. Part of the negative GDP report was due to inventories, which can be a volatile component of the report, so not all signs point to a recession. On Friday, the Fed’s preferred measure of inflation, Core PCE, was reported at 4.8%, similar to last month’s read. Despite high inflation, medium-term and long-term bond yields have generally fallen over the past month and a half, which have also helped equity returns. Next week’s economic updates are important for fresh data on both the services and manufacturing parts of the economy, as well as the monthly jobs report on Friday. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
July 22, 2022
Despite a pullback on Friday, this week the S&P 500 gained over 2%. Defensive sectors lagged while Consumer Discretionary stocks, such as Amazon, posted strong gains. The S&P 500 closed above its 50-day moving average for the first time in three months as the index has gained over 7% in the past 5 weeks. The market is still down over 16% this year, but since the pre-COVID peak on February 19, 2020, the S&P 500 has returned over +8% annualized despite experiencing 2 bear markets. This week’s economic data focused mostly on housing, which is showing signs of slowing. Existing home sales were down month-over-month and year-over-year. Mortgage activity, which includes purchases and refinances, was the slowest in over 20 years. Higher interest rates, influenced by inflation and the Fed, have lowered affordability for homebuyers. On July 27th the Federal Reserve is expected to raise short-term rates by 0.75% to a range of 2.50-2.75%. Next week the four largest companies will report quarterly earnings and the calendar is heavy with economic updates including more housing data, consumer sentiment reads, and the first look at second quarter GDP, which is expected to be just +0.4%. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Managing Director of Investments
July 15, 2022
Even with a bounce-back on Friday, the S&P 500 posted a 1% decline for the week. Both Consumer sectors held up better than the market overall as the price of oil fell. Stocks seem to be moving on a daily basis in tandem with the odds of whether the Federal Reserve will raise interest rates by either 0.75% or 1.00% later this month. Currently, the odds favor 0.75%, but that is far from certain. One of the main drivers of Fed policy is inflation. This week’s headline readings for consumer (CPI) and producer (PPI) inflation were higher than expected. Core CPI (excludes food & energy) of 5.9% was just below last month’s reading while core PPI was 8.2%, well below the 9.7% reading last month. Next week we will see several more companies report second quarter results and there will be several updates on housing. See how savers are being rewarded in our latest Market Insights: https://mybuckingham.com/insights/july-2022-market-insights. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 8, 2022
The S&P 500 gained nearly 2% this week. Friday’s monthly jobs report showed national unemployment at 3.6% for the fourth month in a row, just above the pre-pandemic low of 3.5%. Underemployment, a measure of unemployment that includes those not working a full-time job though they would prefer to, reached a 30-year low of 6.7%, just edging out the previous lows reached in 2000 and 2019. Weekly jobless claims are still historically low but continue to slowly increase while job openings are historically high but are starting to decrease. Bringing all of these data points together, we wonder if right now is as good as it can get for jobs in the near-term? This week’s update on the ISM Services Index continued to show growth and actually improved from the previous reading. Given the strong jobs and services reports, next week all eyes will be on consumer inflation (CPI) and producer inflation (PPI) reports to help gauge whether or not the Federal Reserve will raise rates by 0.75% in less than three weeks. Lastly, it is worth mentioning that the U.S. dollar is at its strongest level since 2002, having strengthened by over 16% in the past year. A stronger dollar means you could buy more foreign currency for each dollar than before, which would make international purchases relatively less expensive. There are winners and losers with a stronger dollar because it also means imports and commodities are less expensive, all else equal, and it means our exports are more expensive in foreign markets. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 1, 2022
The S&P 500 had a 1% gain today to start the third quarter, but the index still declined over 2% for the week. The Utilities sector outperformed while the more cyclical sectors led the downside. The final read on Q1 GDP was similar to the previous reading, this time at -1.6%. While a classic definition of a recession is two consecutive quarters of negative GDP growth, an updated definition from the National Bureau of Economic Research (NBER) is “A recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months”. The ISM Manufacturing Index also slowed from the previous reading but still showed growth for the month of June. Next week we will get an update on the ISM Services Index as well as the monthly jobs report. Next week’s trading will be shortened by the Fourth of July holiday and we wish everyone a fun and safe holiday weekend! If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 24, 2022
Crude oil prices and interest rates fell this week, which helped fuel a 6% stock market rally. Crude oil futures prices slipped from about $110 per barrel to $107 this week and interest rates on 2, 5, and 10-year Treasury bonds each fell 0.1% or more. Energy sector stocks entered their own bear market, with that sector falling more than 22% from the high close on June 8th to the low close on June 23rd. All other sectors gained this week, with a mix of cyclical and defensive sectors leading the way. All 33 major banks passed the Federal Reserve’s annual “stress test”, which had tougher standards than a year ago. This year’s model included 10% unemployment, a 40% drop in commercial real estate prices, and a 55% stock market decline. Weekly jobless claims continue to slowly rise, but are still near the low end of their historic range. Although next week will mark the start of July, the monthly jobs report will be released the following week on July 8th. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 17, 2022
Stock market weakness continued as the Federal Reserve raised rates by 0.75% on Wednesday. This was the largest single increase in over 25 years as the Fed tries to help combat inflation. The Fed raised rates faster than recently expected, with a new target range of 1.5-1.75%. The futures market now expects the Fed to raise rates by 0.75% again on July 27th and end the year with a target range of 3.5-3.75%. Though yields remain at multi-year highs, the yields on 2, 5, and 10-year Treasury bonds barely increased this week. This part of the yield curve remains fairly flat, with yields in the range of 3.15-3.35%. This week crude oil prices fell about $10 per barrel to $110 while the Producer Price Index, a measure of business inflation, had a headline reading of 10.8%. This week we published an article Why Bother Staying Invested in a Bear Market and a video A New Bear Market that covers bear markets, emotions, and opportunities. We are here with you during this time of uncertainty, just as we have been through past periods of stress. We have a strong, knowledgeable team that is ready to help you. Please call us at (937) 435-2742 with any concerns.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 10, 2022
Friday’s headline reading on consumer inflation was above expectations at 8.6%, with core inflation (excluding food and energy) at 6.0%. The surprise of being higher than last month’s reading led stocks lower before the open on Friday and contributed to the 5% loss for the week. Unlike last week, the more cyclical sectors underperformed the defensive sectors and even the Energy sector declined despite slightly higher oil prices. The University of Michigan’s consumer sentiment survey fell to a new low, “comparable to the trough reached in the middle of the 1980 recession”. We will see an update on producer price inflation next week. This week bond prices declined and yields increased ahead of next week’s Fed meeting and likely announcement of a 0.5% interest rate hike. Next week, on Thursday June 16th, we will host a webinar “Should Your Small Business Have a Sponsored Retirement Plan”. If you or someone you know is a small business owner, please visit https://mybuckingham.com/events/should-your-small-business-have-a-sponsored-retirement-plan to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 3, 2022
The S&P 500 lost over 1% this week while Treasury bond yields rose about 0.2% across several maturities. Even though the market declined this week, the more cyclical sectors relatively outperformed while the more defensive sectors lagged. This came despite oil rising to $120 per barrel, even though OPEC agreed to a larger than expected supply increase for July and August. Friday’s jobs report for the month of May showed 390k jobs being added, which was above the average estimate. The unemployment rate remained unchanged at 3.6%, as the participation rate increased slightly. In other economic readings for May, the ISM Manufacturing report was above expectations and the ISM Services report was just below expectations, but both readings showed growth. Coming soon, on Thursday June 16th, we will host a webinar “Should Your Small Business Have a Sponsored Retirement Plan”. If you or someone you know is a small business owner, please visit https://mybuckingham.com/events/should-your-small-business-have-a-sponsored-retirement-plan to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 27, 2022
The S&P 500 gained over 6% this week, led by the Consumer Discretionary, Financial, and Technology sectors. All eleven sectors saw gains, as did mid cap, small cap, and international stock indices. There was some weakness in Tech and Communication stocks early in the week after Snapchat lowered their outlook due to macroeconomic concerns, but most of the stocks it affected ended the week in positive territory. The minutes from the Federal Reserve meeting in early May were released this week, which further solidified the likelihood of 0.5% rate hikes at the next two meetings on June 15th and July 27th. This week’s second read on Q1 GDP was -1.5% but the Atlanta Fed currently projects Q2 GDP to be positive. Next week we look forward to the monthly jobs report, where unemployment is expected to improve to 3.5%. We hope you have a happy and safe Memorial Day weekend and if you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 20, 2022
The S&P 500 lost 3% this week, the seventh weekly decline in a row. While the S&P hit bear market territory (a 20% decline from highs) on an intraday basis today, it has not yet done so on a closing basis. Still, this certainly feels like a bear market even if it is not yet official. The Dow Jones declined for the eighth week in a row, which is the longest streak since 1923, or 99 years ago. Living through down markets is not easy and the emotional toll can be quite high. Do not let fear drive your financial decisions. Focus on the longer term, stick with plans that have been made, and remember that not selling when prices are low takes discipline. If you are close to retirement or newly retired, please remember that your investments are needed for the decades ahead instead of focusing on the week-to-week volatility. The range of returns in any one year is wide but the range of annualized returns over 5, 10, and 20-year periods narrows and skews quite positive. Economic data points this week included retail sales for April that were positive, industrial production that was positive, still strong housing starts and permits, and jobless claims that are historically low. We are here with you during this time of uncertainty, just as we have been through past periods of stress. We have a strong, knowledgeable team that is ready to help you. Please call us at (937) 435-2742 with any concerns.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 13, 2022
Stocks rallied Friday, but still fell overall for the week as investors weighed the latest readings on inflation and comments from Federal Reserve officials. The Labor Department reported headline the April Consumer Price Index (CPI) up 8.3%, while Core CPI (which excludes the more volatile energy and food prices) rose 6.2% on a year over year basis. April’s Producer Price Index (PPI) showed an increase of 11.0%, with Core PPI rising 8.8% over the past 12 months. Resilient demand combined with rising wages and tight supplies continue to boost consumer goods and services pricing. The global supply chain continues to be impacted by the ongoing Russia-Ukraine conflict and the COVID-19 lockdowns in China, most notably affecting the supply of metals, energy commodities, semiconductor chips, and grains. Next week, we are looking at updates on retail sales, industrial production, building permits and housing starts, along with initial jobless claims. This Monday, May 16, we are sponsoring the third of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. Earlier this year we hosted a webinar “How to Buffer Your Financial Plan and Investments Against Market Volatility”. Given the increased market volatility, we believe it is still timely and hope you may find it helpful. Please click here for the replay https://vimeo.com/channels/buckinghamvideolibrary. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Manager & Research Analyst
May 6, 2022
Volatility in the market continued into the month of May with stocks reacting to a series of economic updates during the week. The S&P 500 ended the week flat despite experiencing strong up and down swings of roughly 3% on Wednesday and Thursday. As expected, the Federal Reserve raised short-term interest rates by 0.50%, bringing the target range to 0.75% - 1.00%. Two rate moves of similar size are now widely expected in the upcoming June and July meetings. The market initially rallied in response to this news and additional commentary from Fed Chairman Jerome Powell including the state of the U.S. economy, the suggestion that inflation may have peaked, and that a 0.75% hike is not currently being considered. The Fed also plans to begin reducing the size of its balance sheet next month to progressively remove excess liquidity from the financial system. In other news, the U.S. Labor Department released its employment report for the month of April with 428,000 positions added by employers. According to Dow Jones Newswires, this marks the 12th consecutive month of over 400,000 jobs being added. The unemployment rate remained unchanged at 3.6% and year-over-year wage growth of 5.5% met expectations. Next week, we are looking at updates on the Federal budget, core CPI, PPI, and an initial reading on the consumer sentiment index. On Monday, May 16, we are sponsoring the third of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad Portfolio
Manager & Research Analyst
April 29, 2022
The S&P 500 finished the month of April down around 9%. First-quarter gross domestic product (GDP), reported on Thursday, fell -1.4% compared to estimates of a 1% increase. This contracted largely due to less corporate inventory building and fewer imports, but underlying data in solid consumer and business spending point to a positive outlook on U.S. growth in the months ahead. In other economic news, the Labor Department once again reported encouraging weekly jobless claims figures, with this recent week showing a drop in applications for unemployment protection. Share-price volatility rose this week as several large-cap Technology companies reported earnings. These included Microsoft and Meta Platforms (Facebook) which delivered solid operating results and price performance. Overall, investor sentiment is historically bearish as this week’s American Association of Individual Investors survey showed the highest reading in bearish sentiment and most negative reading in the bull-bear spread since March of 2009. However, this is often contrarian, as extreme bearish sentiment has historically been followed by the largest average gains for the S&P 500. Next week, we are looking at the Federal Open Market Committee meeting and commentary from Fed Chair Jerome Powell, and updates on ISM manufacturing, construction spending, factory orders, nonfarm payrolls, and unemployment rates. Monday, May 16th we will have the third of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Manager & Research Analyst
April 22, 2022
This week, stocks fell further as investors assessed more corporate earnings and hawkish comments that were released from Federal Reserve Chair Jerome Powell. It is now expected that a 0.5% hike could be seen at the next meeting in May as Jerome Powell signaled the U.S. Central Bank will have to move more aggressively to counter inflation. The S&P 500 declined just over 2%, with growth stocks underperforming value stocks. With no recent major developments in the Russia-Ukraine war, traders have been more focused on the bond market. Notably, U.S. government bond prices continue to slide as investors expect continued inflation and rising interest rates. In related news, monthly existing home sales fell due to climbing mortgage rates. On the job front, recent data for initial jobless claims came in higher than expected but continues to remain low due to strong demand for labor. Next week, we will get updates on consumer confidence and personal consumption, real consumer spending, and new home sales. Monday, April 24th we will have the second of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Analyst
April 15, 2022
Markets were closed in observance of Good Friday. In the shortened week, the S&P 500 declined just over 2% while small cap stocks gained. The bond market continues to be an area of focus due to high inflation. The 10-year Treasury yield is now 2.83% and several sources showed the national average mortgage rate is over 5%. The Consumer Price Index showed headline annual inflation of 8.5% and core (excluding food and energy) inflation of 6.5%. Inflation for businesses, measured by the Producer Price Index, showed headline inflation of 11.2% and core inflation of 9.2%. For consumers, the prices of energy, vehicles, hotels/airfare, and household furnishings all increased double-digits from a year ago. Education and medical-related categories showed the smallest increases at under 3%. A reading on consumer sentiment was higher than expected and weekly unemployment claims remained low. Monday April 18th we will have the first of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 8, 2022
This week the S&P 500 declined over 1%, with the Technology sector leading the downside, while the defensive sectors gained. The bond market continues to move ahead of the Federal Reserve, which gave signals that it may raise short-term interest rates by 0.5% at its early May and mid-June meetings. The 2-year Treasury yield surpassed 2.5% and the 10-year yield topped 2.7%, each the highest levels seen in three years. The Fed also has $9 trillion in bonds to manage; they plan to let up to $95 billion of bonds mature each month. All else equal, this could result in lower bond prices and higher interest rates. This year, higher rates have been a headwind for stock prices due to higher corporate borrowing costs as well as having a higher hurdle rate for risk-taking. Weekly unemployment claims continued to show a strong job market and next week we will get inflation updates, with core producer and consumer inflation both expected to be 8.4% year-over-year. Monday April 18th we will have the first of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 1, 2022
The S&P 500 was nearly unchanged this week; defensive sectors gained while banks had a tough week. Yields were in focus again, as the 2-year Treasury yield was higher than the 10-year Treasury yield by the end of the week. This slightly “inverted” yield curve (short rates higher than long rates) can mean a lower profit spread for banks on loans versus deposits. The national average rate for a 30-year mortgage hit 4.7%, the highest since the end of 2018. The national average has not climbed above 5% in the past 10 years, while in the 10 years before that rates were usually above 5%. Unsurprisingly, mortgage refinancing activity continues to fall towards multi-year lows. However, new purchase mortgage activity, while down from a year ago, is still looking fairly average across several years. Friday’s monthly jobs report showed strength in the labor market with a higher participation rate and a lower national unemployment rate of 3.6%. The ISM manufacturing report also showed strength in jobs, but missed expectations on new orders and prices paid were higher than expected. The final read on Q4 GDP was 6.9%. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 25, 2022
The S&P 500 gained over 1.5% this week with much calmer daily activity than we’ve seen for most of this year. The bond market, however, continues to make moves, with the 10-year Treasury yield moving up to 2.5% on Friday. Treasury yields at different maturities, such as 2-year, 10-year, and 30-year, have all increased significantly this year. Treasury yields from 2 to 30 years are now all in the range of 2.25-2.6%, which is a fairly “flat” yield curve (a yield curve is a graph of yields at various times to maturity). Yields have increased because of higher inflation and the Fed. Higher inflation has resulted in more aggressive talk from the Fed about raising rates; Fed speakers have recently hinted at raising rates by a half of a percent at an upcoming meeting or meetings, instead of the more common quarter percent increases. On the economic front, weekly jobless claims improved markedly and consumer sentiment, while low, matched expectations. Even though next Friday will be the first of the month, the monthly jobs report will be released the following Friday. This Monday the 28th we will have the first part of a three-part webinar series on Planning Your Retirement. Please click here for details and to register: https://mybuckingham.com/events/planning-your-retirement-webinar-series. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 18, 2022
The S&P 500 gained 6% this week and reached its highest level in a month, coming out of correction territory and bringing the year-to-date decline to about -6%. International stocks generally did well, with Chinese stocks having strong gains after its government spoke of stabilizing its economy and capital markets. Oil prices declined for the week, including a brief time below $100 per barrel. As expected, this week the Federal Reserve raised its overnight lending rate by 0.25%. The Fed also indicated it could raise rates by 0.25% at each of the remaining six meetings this year. The 10-year Treasury yield nearly touched 2.25%, but closed higher for the week at 2.15%. This correlates to mortgage rates; the 30-year national average rate topped 4% for the first time since 2019. Producer price inflation hit 10.0% year-over-year and next week we will see an update on consumer confidence. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 11, 2022
The S&P 500 declined over 2.8% this week. Oil prices rose to over $130 per barrel on Monday but actually fell for the week. The 10-year Treasury yield made a big move again, this time back up to 2%. On Wednesday we expect the Federal Reserve to raise the federal funds rate by 0.25%. Market participants currently expect up to 6 rate hikes this year. Inflation reads continue to run hot, with headline Consumer Price Index (CPI) at 7.9% and core inflation (excluding food & energy) at 6.4%. Hopes that we would soon see a slower rate of inflation have been pushed further down the road because oil and grain prices have increased significantly since the start of the Ukraine crisis. This week Amazon (AMZN) followed Alphabet’s (aka Google’s) lead by announcing a 20:1 stock split. This summer both stocks will split, where share count goes up and price goes down to offset. This could lead to those stocks being included in the Dow Jones Industrial Average, which is a stock price weighted index. As we said in March of 2020: we are here with you during this time of uncertainty, just as we have been through past periods of stress. We have a strong, knowledgeable team that is ready to help you. Please call us at (937) 435-2742 with any concerns.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 4, 2022
The S&P 500 declined 1.3% this week as the VIX index (measures volatility) had its highest weekly close in over a year. Ukraine news again dominated market sentiment and affected the price of oil, which hit new multi-year highs, which led to the Energy sector having the best return this week. On the opposite end, banks lagged due to falling longer-term interest rates. The 10-year Treasury yield made a relatively large move, falling a quarter of a percent to 1.72%. This week Federal Reserve Chairman Powell all but said the federal funds rate will be increased by a quarter of a percent in mid-March, putting to bed any thoughts of a half percent hike this month. However, the Chairman left the door open for a half percent hike later this year if conditions were right. The monthly jobs report was stronger than expected and national unemployment dipped to 3.8%. Reads on services and manufacturing in February still showed growth, though the services report came in below expectations. Once again, we recently released a new 4-minute video, Market Twists: When markets are volatile, it pays to not push the panic button: https://vimeo.com/channels/buckinghamvideolibrary and lastly, if you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 25, 2022
In a surprising twist, after being down as much as 5% this week, the S&P 500 ended the week with a gain of 0.8%. The VIX index (measures volatility) hit the second-highest level in the past year but ended the week with a modest decline. News coming out of Ukraine and Russia again dominated market sentiment, pushing the S&P 500 into correction territory, meaning on a closing basis it was down more than 10% from recent highs. Below the surface, it was noted that earlier this week over half of the stocks in the S&P 500 had seen at least a 20% drawdown (move from high to low) from their 52-week highs. Corrections are common; a 10% or more drawdown in the S&P 500 happened in 12 of the past 20 years. This is one of the points we made in our new 4-minute video, Market Twists: When markets are volatile, it pays to not push the panic button: https://vimeo.com/channels/buckinghamvideolibrary. On the economic front, personal income and consumer spending were a bit stronger than expected in January and next week we will see important updates on manufacturing and services, as well as the monthly jobs report. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 18, 2022
The S&P 500 declined 1.6% this week, all of which came at the end of the week on news of rising tensions in Ukraine. On Monday, West Texas crude climbed over $95 per barrel for the first time since 2014, but by the end of the week oil briefly traded below $90 and the Energy sector lagged the overall market. Somewhat surprising in a volatile week: small cap, mid cap, and international stocks outperformed the S&P 500. On Wednesday, the 10-year Treasury yield hit 2.05% but retreated to 1.93% to end the week after Fed comments indicated they would only increase overnight rates by 0.25% at their March meeting. Core producer price inflation rose 8.3% year-over-year while January retail sales were better than expected. An index of Leading Economic Indicators (LEI) declined month-over-month for the first time in a year but the year-over-year reading, which we pay more attention to, remains quite positive. Next week stock and bond markets will be closed on Monday in observance of Presidents’ Day (technically Washington’s Birthday per the NYSE) and we will see more consumer-related economic updates, including two reads on consumer confidence. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 11, 2022
The S&P 500 gave back last week’s gains, but the day-to-day ups and downs have resulted in very little change over the past 3 weeks. After this week’s higher than expected consumer inflation report, Treasury yields rose in anticipation of Fed rate hikes including the slight chance that the Fed would raise rates by 0.5% in March instead of the expected 0.25%. The 10-year Treasury rose as high as 2.06%; the first time it has been over 2% since the middle of 2019. Crude oil again hit a new high late in the week on news that Russia could invade Ukraine at any time. A read on consumer sentiment surprised to the downside, with low readings in both the current conditions and expectations components. The survey also showed expectations for 5% inflation over the next year. Next week we will get updates on producer price inflation and retail sales. Earlier this week we hosted a webinar “How to Buffer Your Financial Plan and Investments Against Market Volatility”. Please click here for the replay https://vimeo.com/channels/buckinghamvideolibrary. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 4, 2022
The S&P gained again this week, returning 1.5%, but with internal volatility in some of the largest stocks due to quarterly earnings updates. Nearly all sectors gained but the Energy sector gained the most, as West Texas crude hit $93 per barrel, the highest since 2014. The monthly jobs report surprised to the upside as January jobs added were higher than expected and December’s number was revised upwards. Still, there are seasonal adjustments that may have inflated the number and the national unemployment rate ticked up to 4.0% as the participation rate increased. The strong jobs report solidified expectations for Fed rate hikes and led to the 10-year Treasury yield marking a two-year high at 1.93%. In other economic news, reads on services and manufacturing grew in January, though the growth was at a slower rate than December. Next week we will get updates on consumer inflation and consumer sentiment. This Wednesday, February 9th we will be hosting a webinar “How to Buffer Your Financial Plan and Investments Against Market Volatility”. Please click here to register: https://mybuckingham.com/events/how-to-buffer-your-financial-plan-and-investments-against-market-volatility.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 28, 2022
The S&P 500 moved more than 2% each day this week but ended up with gain of 0.77%. While the more speculative parts of the market sold off, the Technology sector gained due to positive Q4 reports from Apple and Microsoft. About one third of companies have reported so far and the number of earnings “surprises” are at an average level. Volatility, as measured by the VIX index, touched a one-year high but actually declined for the week. The Federal Reserve met this week and all but announced that the first interest rate hike in over three years will occur in mid-March. The futures market is currently pricing in 5 rate hikes of 0.25% by January 2023. The Fed will also soon stop purchasing bonds and will likely let maturing bonds roll off their balance sheet in the coming months. On the economic calendar, the first read on Q4 GDP was 6.9%, well above expectations, while reads on consumer confidence and personal income came in a bit below expectations. Next week we look forward to the monthly jobs report, where unemployment is expected to remain below 4%. On Wednesday February 9th we will be hosting a webinar “How to Buffer Your Financial Plan and Investments Against Market Volatility”. Please click here to register: https://mybuckingham.com/events/how-to-buffer-your-financial-plan-and-investments-against-market-volatility.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 21, 2022
This week, the S&P 500 lost over 5% as investors were focused on rising interest rates and concerns about how aggressively the Federal Reserve will tighten monetary policy. Rising Treasury yields have pressured more speculative stocks and less capitalized, high-growth companies. The technology-heavy NASDAQ Composite Index entered correction territory this week, falling more than 10% from its November high. We saw jobless claims come in higher than expected at 286,000 compared to the 225,000 estimate. Fourth-quarter earnings season continues with some of the largest holdings in the S&P 500 reporting next week, including Microsoft and Apple. In other news, we are looking forward to reads on the consumer confidence index, GDP, core PCE inflation, personal income, and consumer spending. Next Tuesday, January 25, we will be hosting a webinar “Making Sense of Blockchain, Bitcoin, and Digital Assets”. Please click https://mybuckingham.com/events/making-sense-of-blockchain-bitcoin-and-digital-assets to register.
Emily M. Cozad
Portfolio Analyst
January 14, 2022
This week the S&P 500 lost less than a half of a percent as several banks kicked off “earnings season” for Q4 results. While many banks reported better than expected results, many bank stocks sold off on Friday, causing a weekly loss for the Financial sector. A weaker dollar helped the relative performance of commodities, energy, and international stocks this week. After touching 1.8%, the 10-year Treasury yield was nearly unchanged for the week at 1.77%. There were many economic reports, including core consumer inflation 5.5% higher than a year ago and core producer inflation 8.3% higher than a year ago. Retail sales declined from November to December, which was below expectations, as was the report on consumer sentiment. Next week we will get several data points on housing and the markets will be closed on Monday, in observance of Marin Luther King Jr. Day. On Tuesday January 25, we will be hosting a webinar “Making Sense of Blockchain, Bitcoin, and Digital Assets”. Please click https://mybuckingham.com/events/making-sense-of-blockchain-bitcoin-and-digital-assets to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 7, 2022
After briefly touching a new high on Tuesday, the S&P 500 sold off Wednesday due to the Federal Reserve taking a more aggressive tone towards rate hikes and reducing the amount of bonds the Fed will hold later this year. Treasury yields rose about a quarter of a percent this week, which is a relatively large move, with the 5-year yield around 1.5% and the 10-year yield around 1.77%, both the highest since early 2020. The average 30-year mortgage rate also rose to the highest level in over a year. Higher interest rates drove investors towards Value stocks, which are more heavily weighted with Financials and Energy, while Growth stocks lagged, which are more heavily weighted in Technology. Friday’s monthly jobs report showed the national unemployment rate at 3.9%, with average hourly earnings 4.7% higher than a year ago. The ISM reports on services and manufacturing showed growth in December, though less growth than the month before. Next week we will see updates on inflation and consumer confidence. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 31, 2021
The S&P 500 ended the year on a high note, with a gain of over 1% this week and a total return of about 29% this year. All sectors gained this year, as did mid-cap and small-cap stocks, while the Dow Jones Industrial Average (comprised of only 30 stocks) gained over 21%. For only the second time in the past 20 years, the Barclays U.S. Aggregate Bond Index posted a calendar year loss, declining about 1.6%. The loss resulted from rising interest rates, which caused bond prices to decline. Weekly jobless claims were 198,000 which put the 4-week moving average below 200,000, a 50-year low. Next week’s monthly jobs report could show the national unemployment rate declining to 4.1% and we will also see important updates on manufacturing and services. Thank you for your continued trust and support and we hope you have a prosperous 2022. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 23, 2021
The S&P 500 gained in this holiday-shortened week, more than making up for last week’s decline and setting a new closing high Thursday. Coincidentally, a volatility index fell to a 1-month low as fears about the severity of the Omicron variant of COVID lessened. The Consumer Cyclical and Technology sectors led the rebound while Utilities and Financials lagged. Additionally, the FDA granted emergency use authorization to Pfizer for an antiviral pill that can be taken within the first few days of having COVID symptoms that dramatically reduces the risk of hospitalization or death. On the economic calendar, the final read on Q3 GDP was 2.3%, slightly higher than estimates, and separate reads on consumer confidence and consumer sentiment were above expectations. The latest read on consumer inflation, core PCE, was 4.7% higher than a year ago, which was also above expectations. Next week we look forward to closing out a strong year for stock returns, with the S&P 500 total return currently over 27%. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 17, 2021
This week the S&P 500 declined 4 out of 5 days and overall lost nearly 2% after a strong gain last week. Defensive sectors such as Consumer Staples, Healthcare, Utilities, and REITs (we like the acronym SHUR) gained while cyclical sectors such as Energy, Consumer Discretionary, and Technology had the largest losses. On Wednesday, the Federal Reserve announced it will be buying fewer bonds in the coming months and that it will end its bond purchase program in March of 2022, which sets the stage for interest rate hikes. The futures market is currently pricing in 3 rate hikes (0.25% each) next year from the current effective Fed funds rate of 0.08%. The Fed is looking to take action to possibly help slow inflation. For example, this week’s reading on producer price Inflation (excluding food and energy) was 7.7% higher than a year ago, which was higher than expected. Next week, trading will be shortened by a day, as the markets will be closed Christmas Eve, and we will see several economic updates on the consumer. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
This week the S&P 500 rebounded almost 4%, offsetting losses seen over the past two weeks. Most of the gains came on Monday and Tuesday, as stock markets became less concerned about the severity of the COVID variant Omicron. Volatility retreated, as shown by the VIX index returning to a more typical reading below 20. While all sectors saw positive returns, the Technology sector outperformed the market, led by Apple, which hit a new high. Apple is approaching a $3 trillion market cap and is nearly 7% of the S&P 500 index. The Consumer Price Index (CPI), a measure of inflation, was up 4.9% from a year ago excluding food and energy prices, which was in-line with expectations. This was higher than last month’s reading of 4.6%. Next week is stacked with economic updates including more reads on inflation, retail sales, and a Fed meeting. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 3, 2021
This week was marked by continued volatility as the Omicron variant of COVID was detected in the U.S. for the first time and expectations for Fed rate hikes in 2022 increased. A volatility index, the VIX, hit its highest level since January. Higher volatility and lower stock prices often go hand-in-hand, as investors are less confident about future prices. This week the S&P 500 saw 4 straight days with over 1% moves and the loss for the week was about 2%. Fed Chair Jerome Powell spoke to the Senate this week and indicated the Fed would soon discuss reducing its bond purchases more rapidly in the coming months because “The economy is very strong and inflationary pressures are higher”. The ISM reports on manufacturing and services both showed strong growth in November and the monthly jobs report showed fewer jobs added than expected, but the unemployment rate declined more than expected to 4.2%. Also showing strength was an increase in the participation rate, which is the number of people who are employed or are seeking employment. Next week we will get an update on consumer inflation. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 26, 2021
The S&P 500 traded lower this week on concerns about inflation and expectations for higher interest rates next year, combined with news of a new Coronavirus variant. The NASDAQ has fallen around 3% since hitting a new closing high last week, partly due to rising bond yields, which can put pressure on technology stocks. On Monday, President Biden nominated Federal Reserve Chairman Jerome Powell for another term to lead the central bank. Several economic reports were released this week. Third-quarter GDP came in higher at 2.1% quarter-over-quarter and lower than 2.2% expected; weekly initial jobless claims fell notably to 199,000 (the lowest level since 1969), and consumer sentiment data improved slightly. In a move to bring down increasing gas prices at the pump, the Biden Administration pulled 50 million barrels of oil from the Strategic Petroleum Reserve. Next week we look forward to data on consumer confidence, ISM manufacturing, initial jobless claims, nonfarm payrolls, and the unemployment rate. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Analyst
November 19, 2021
The S&P 500 posted a small gain this week while the price of oil fell for the fourth week in a row. The Technology sector (the largest sector in the S&P 500) led the market and posted a new high while Energy (one of the smallest sectors) and Financials lagged. Retail sales and industrial production in October were both stronger than expected, jobless claims improved slightly, and Q3 earnings reporting season wrapped up with many major retailers reporting this week. An ETF that tracks the Retail industry posted a small loss. Next week we look forward to the second read on Q3 GDP, which could be 2.2%, but otherwise it should be fairly quiet, with the markets closed on Thursday for Thanksgiving and open only until 1pm on Friday. We thank you for your continued trust and support, and we hope you have a great Thanksgiving. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 12, 2021
The S&P 500 posted a small loss this week. Most of the market movement came on Wednesday after the updated reading on consumer inflation was higher than expected. Core CPI increased 4.6% from a year ago and was higher than last month’s 4.0% reading. Some of the major increases over the past year have been in the price of oil, fuel oil, gas utility, and used cars. The price of crude oil has not changed much over the past four weeks, remaining just above $80 per barrel. Major auto manufacturers have also recently given more encouraging comments about the semiconductor chip shortages in the short-run, but most still expect shortages of some degree to last well into next year. The CPI report pushed bond yields higher, with the 10-year yield increasing from 1.45% to 1.58% this week, and stock prices lower, albeit less than 1% on that day. Next week we look forward to an update on October’s retail sales. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 5, 2021
The S&P 500 gained each day this week for a total gain of about 2% to start off the month, driven by Fed commentary, improving jobs, and a promising COVID-19 treatment in the works. The Russell 2000, which tracks small cap stocks, and the S&P 500 both closed at new all-time highs Friday. On Wednesday, the Federal Reserve announced its plan to reduce the pace of its bond buying, also known as tapering, and the markets took it in stride. Friday’s monthly jobs report was stronger than expected and included an upward revision to last month’s report. The national unemployment rate is now 4.6%. Friday’s news also included positive phase 2/3 trial results from Pfizer, which indicated its antiviral pill significantly reduced hospitalization and death from COVID-19; the company plans to submit data to the FDA for Emergency Use Authorization as soon as possible. In other economic news, the monthly ISM reports on both the services and manufacturing segments of the economy remained strong and both readings were above the average estimate. Next week we look forward to updates on inflation at the consumer level as well as reads on consumer sentiment. If you have a friend or family member who could benefit from our planning, investment, and/or tax services, please direct them to https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 29, 2021
The S&P 500 again reached a new high, touching the 4,600 mark for the first time while capping off a strong monthly gain of nearly 7%. The five largest companies in the index fared reasonably well after each reported earnings this week. Microsoft (MSFT) surpassed Apple (AAPL) to become the most valuable company in the world today as Apple relinquished the top spot for the first time in over a year. Facebook announced it will change the name of its parent company (which also operates Instagram, WhatsApp, and Oculus) to Meta to focus on its vision of the “metaverse” and the stock ticker will change from FB to MVRS on December 1st. Oil touched $85 per barrel this week but the price receded to close lower for the week. On the economic calendar, we saw the first read of Q3 GDP at 2.0%, which was below the average estimate of 2.7%. Weekly jobless claims improved and we may see 4.7% as the headline unemployment number next Friday from the monthly jobs report. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 22, 2021
This week the S&P 500 notched a new high and marked a new record close. The S&P has hit a new high at some point every month this year, the seventh year this has happened including 2014 where a new high was set every month. The VIX, a measure of volatility, fell to multi-month lows and weekly jobless claims moved lower again. A new Exchange Traded Fund (ETF) that tracks the price of Bitcoin futures contracts was launched this week as Bitcoin hit a new high, but the ETF ultimately had a loss for the week as prices receded. Snap Inc. (aka Snapchat) lost about a quarter of its value this week; its advertising revenue concerns pushed several large cap Communications/Tech stocks lower. However, next week many of these stocks will release quarterly updates. We will continue to evaluate these reports, especially from the five largest market cap companies that currently make up 22% of the S&P 500. This coming Tuesday, 10/26, is the first of a two-part workshop on Estate Planning. Please click here for more details: https://mybuckingham.com/events/the-only-book-youll-ever-need-for-an-organized-estate-two-part-seminar.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 15, 2021
The S&P 500 gained over 1.7% this week, its best showing in over two months. Most of the gains came on Thursday, which had one of the best single-day gains this year. Year-to-date, the S&P 500 has gained over 20% including dividends. Weekly jobless claims improved, falling below 300,000 for the first time since the pandemic began, COVID cases continue to slow, and third quarter earnings reports have started off favorably compared to analyst expectations. Even though oil made a multi-year high at over $80 per barrel this week, the 10-year Treasury yield came down a bit to 1.57%. Core consumer inflation was 4.0% compared to a year ago, the same as last month and in-line with expectations. Core producer inflation was 6.8% compared to a year ago, just above last month’s reading and a bit below expectations. While we expect above-average inflation to stay with us for a while, we are starting to see signs that the rate of change may be leveling off, as covered in greater detail in our October Market Insights newsletter: https://mybuckingham.com/insights/october-2021-market-insights. Next week we look forward to 80 of the S&P 500 companies reporting as well as updates on the housing market. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 8, 2021
This week, Wall Street focused its attention on Washington as Congress moved closer to a short-term resolution that will push the debt ceiling limit deadline from October 18th into December. Initial weekly unemployment claims were down 38,000 to 326,000, an encouraging sign for the economy. Today’s employment report showed that only 194,000 positions were added compared to the expected 500,000; however, wage gains were better than expected and the unemployment rate fell to 4.8% from 5.2%. Overall, the S&P 500 is set to finish higher this week, despite market uncertainties including the debt ceiling debate, China’s slowing growth, a natural gas shortage in Europe, and the potential passing of the infrastructure bill before Congress. The nation’s largest banks are set to kick off third quarter earnings season next week. We will also be looking forward to updates on job openings, core CPI, PPI, retail sales, and the consumer sentiment index. Please join us either in-person or via webinar on October 26th, as we will be hosting the first part in our two-part series: “The Only Book You’ll Ever Need for an Organized Estate”. To register, please visit: https://mybuckingham.com/events/the-only-book-youll-ever-need-for-an-organized-estate-two-part-seminar
Emily M. Cozad
Portfolio Analyst
October 1, 2021
The technology sector led the S&P 500 lower this week, largely due to inflation concerns and higher interest rates. Gross Domestic Product (GDP) rose in line with expectations at 6.7%, and core Personal Consumption Expenditures (PCE) rose to a 30 year high. ISM Manufacturing data remained strong. President Biden signed a bill Thursday night to avoid government shutdown and extend funding through December 3. In the coming weeks, Congress looks to suspend or increase the debt ceiling. The monthly jobs report will be released next Friday. We encourage you to join us Tuesday October 5 for an informative webinar discussing Medicare topics such as enrollment basics, options, penalties, and considerations for changing plans. To register, please visit https://mybuckingham.com/events/the-ins-and-outs-of-medicare.
Allen Z. Thuma
Portfolio Manager & Research Analyst
September 24, 2021
The S&P 500 ended the week positive despite suffering its worst decline since May on Monday. Increased volatility can be attributed to several factors including news that China’s largest property developer, China Evergrande Group, may be headed for bankruptcy. Fears that Evergrande’s potential collapse would lead to larger global contagion have cooled and it appears the Chinese government is willing to intervene if necessary. On Wednesday, the Federal Reserve signaled that a taper of its bond repurchasing program could begin in November with interest rate increases beginning in late 2022. Policy commentary was largely in-line with market expectations and chairman Powell reiterated that financial conditions would remain accommodative even after the Fed stops the bond repurchase program. Next week we close out the third quarter with reads on housing data, labor market conditions, and Q2 U.S. GDP. Personalized Q3 Video Updates will be available to our MyBuckingham app and portal users in just a few short weeks. If you do not have an active MyBuckingham login, please reach out to your Buckingham representative so you can receive these valuable quarterly updates.
Brad T. Gregory
Senior Portfolio Manager & Research Analyst
Investment Operations Manager
September 17, 2021
The market had another slight down week, with the S&P 500 losing about 0.9% as volatility rose. 10-year Treasury yields continue to slowly move higher, with a yield of 1.37%. This week’s data points were all about the consumer, with reads on inflation, sentiment, jobless claims, and spending. Each reading was relatively better compared to the prior month’s report. Next week we will be watching commentary from the Fed on Wednesday for clues about their expected tapering process. More exciting, though, will be Tuesday evening when we host Dr. Mark Milstein at 6pm EDT. He will be teaching us how to keep our brains young, with tactics to improve memory, boost productivity, and lower the risk of dementia. Please visit https://mybuckingham.com/events/milstein to register or to have access to the replay for the following two weeks.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
September 10, 2021
After 13 straight weeks of touching a new high, the S&P 500 failed to make one this week, but instead declined slightly each day for a total weekly loss of about 1.6%. Apple (AAPL), which is over 6% of the S&P 500, touched a new high but lost 3% this week after a District Judge in California ruled for Apple in its battle with Epic Games in all ten counts but the last one. The ruling on this count stated that Apple is engaging in anticompetitive conduct and that it must allow app developers to have links to forms of payment outside of Apple’s app store (where Apple would not collect a fee). Today’s report on producer price inflation was higher than expected and higher than last month’s report, with core inflation 6.3% higher than a year ago. Next week we will get a read on consumer inflation in August, which is expected to have a core reading of 4.2% compared to a year ago. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
September 3, 2021
The S&P 500 and the Nasdaq touched new highs again this week. Today’s monthly jobs report widely missed estimates, showing 235,000 jobs being added in August compared to estimates around 733,000. August reports have been known to be volatile and subject to future revisions. The estimate for jobs added in July were revised higher by 110,000. A monthly manufacturing report on Wednesday and a monthly services report today both showed continued growth in the economy. Next week we are looking forward to a holiday-shortened trading week and we hope you have a pleasant and safe Labor Day weekend. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
August 27, 2021
Several stock market indices hit new highs this week, including the Tech-heavy Nasdaq that reached 15,000 for the first time. Defensive sectors lagged this week while the Energy sector (the smallest sector in the S&P 500) had the largest gain. The price of crude oil increased by over 10%, which was the largest weekly gain in over a year. Several factors drove the price higher: hope that COVID cases are leveling off in China and the U.S., a weaker dollar, speculation about production levels ahead of an OPEC+ meeting next week, and a looming hurricane that is forecast to make landfall in Louisiana on Sunday. The Federal Reserve had its annual Jackson Hole symposium this week and the key takeaways were that the Fed is very close to reducing its monthly bond purchases and may stop them next year. Also, the Fed was very clear that this “taper” was not an indicator of raising interest rates any time soon. For the week, Treasury yields slightly increased. For the consumer, existing home sales and new home sales were reported slightly higher than expected, while the latest read on sentiment was nearly unchanged. July core consumer inflation was 3.6% year-over-year, just above 3.5% reported the month before. Next week we look forward to the monthly jobs report. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
August 20, 2021
The S&P 500 declined less than 1% this week after marking a new high on Monday. Still, the S&P 500 has more than doubled from the March 2020 low. Within the market, the more defensive sectors such as Healthcare, Utilities, and Consumer Staples gained, while cyclical sectors such as Energy and Materials lagged. Dollar strength pressured the prices of commodities and international stocks while emerging market stocks were also weaker from continued concerns about additional regulations within China. In the U.S., weekly jobless claims improved to the best level in this cycle, but retail sales fell a bit more than expected in July; we will see even more consumer data points next week. Final reminder, our next webinar is on August 24th: What It Means To Be Retirement Ready. Please register here: https://mybuckingham.com/events/what-it-means-to-be-retirement-ready.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
August 13, 2021
For the tenth week in a row, the S&P 500 touched a new high, and the index is up nearly 20% this year including dividends. August and September have historically been weaker months for stock market returns, so the streak of new highs could be broken at any time. The value style outperformed growth this week but the performance has been very similar both year-to-date and over the past year. Growth has a heavier weighting in the Technology sector while value has a heavier weighting in the Financial sector, for example. Reports on inflation in July still showed above-average year-over-year price increases. At the consumer level, core inflation rose 4.3% but the average price of used cars leveled off a bit. At the producer level, core inflation was 6.2%, which was higher than expected. Lumber futures fell again, hitting a 9-month low, and are 70% below the high set just 3 months ago. We are looking forward to hosting our next webinar on August 24th: What It Means To Be Retirement Ready. Please register here: https://mybuckingham.com/events/what-it-means-to-be-retirement-ready.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
August 6, 2021
The S&P 500 notched a new high and gained nearly 1% this week. Today’s monthly jobs report showed 943,000 jobs were added in the month of July, which brought the unemployment rate down to 5.4%. Earlier in the week, the ISM Services Index for July reached 64.1, a record high in over 20 years of data, which showed growth from all 18 service industries that were surveyed. The strength in these numbers, along with tapering comments from a Fed member, sent Treasury yields up from multi-month lows. This week the 10-year yield went as low as low as 1.13% to as high as 1.30%. The U.S. dollar also strengthened, which put downward pressure on commodity prices. Q2 corporate earnings season is nearly complete, with about 90% of companies having reported results. Next week we look forward to updates on inflation at the producer and consumer level. In just a few weeks, on August 24th, we will be hosting our next webinar What It Means To Be Retirement Ready. Please register here: https://mybuckingham.com/events/what-it-means-to-be-retirement-ready.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 30, 2021
The S&P 500 hit a new high yesterday but posted a slight loss for the week. The calendar was heavy with companies reporting second quarter results, including the five largest companies in the index. Generally results were good, as a higher percentage of companies “beat” estimates than usual. Q3 corporate earnings could be on pace to increase 85% compared to a year ago, which was the low of 2020. The Federal Reserve kept short-term rates unchanged, as expected, and stayed on message about growth, inflation, and rates. The next Fed meeting will be the Economic Policy Symposium at Jackson Hole Wyoming in late August. The first read on Q2 GDP was below expectations but still had a solid showing at 6.5%. Next week we will see updates on inflation, industrial output, and the monthly unemployment report. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 23, 2021
The S&P 500 finished strong with a new high after initially selling off on Monday, resulting in a swing of over 4% from low to high this week. Stocks initially sold off on concerns of rising COVID, attributed to the more contagious Delta variant. Stocks gained each day thereafter as quarterly earnings reports came in generally better than expected. Earlier this week the National Bureau of Economic Research said the 2020 recession only lasted 2 months, with a trough in April 2020, making it the nation’s shortest downturn on record. This followed a 10+ year expansion that was the longest in records dating back over 150 years. The shortest recession before this was six months in 1980. Seemingly following the Fed’s playbook, the European Central Bank said it expects its rates to remain low until it sees inflation reaching 2% or more. Back in the U.S., housing starts and existing home sales came in above expectations; next week we look forward to the first read on Q2 GDP, which may show 8.5% growth in the quarter. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 16, 2021
With the second quarter now over, the major financial institutions have kicked off earnings season this week and we expect to see a large number of companies soon weigh in with their second-quarter earnings results. Fed Chair, Jerome Powell, addressed inflation concerns during the Beige Book summation and confirmed the central bank’s stance on recent inflationary pressures should prove temporary and transitory in nature as the economy continues to recover post-pandemic. We saw a number of reports this week, including the initial weekly jobless claims which fell to a pre-pandemic low of 360,000 and provided yet another sign that the economy is recovering. The Producer Price Index rose 7.3% year-over-year, and the Consumer Price Index for the month of June showed that inflation was up 5.4% from this time last year, the fastest pace since 2008. Retail sales came in stronger-than-expected with an increase of 0.6% following a drop in May as consumers continue to increase discretionary spending on dining out and non-essentials. Next week, we are looking forward to housing data including permits, existing home sales, mortgage applications and rates; along with initial jobless claims. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Emily M. Cozad
Portfolio Analyst
July 9, 2021
The S&P 500 hit a new high again today but only made a small gain for the week. Treasury yields were generally lower and the 30-year yield dipped below 2% for the first time since early February. The Federal Reserve continues to purchase bonds on a monthly basis, with its balance sheet having grown to $8.1T as of the most recent update. The ISM Services index, where any number above 50 shows growth, had a reading of 60.1. This is the fourth month in a row with a reading over 60, which is the longest streak in over 20 years. Oil nearly touched $77 per barrel on Wednesday, but closed lower for the week. Next week we look forward to updates on inflation, consumer spending, and consumer confidence. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
July 2, 2021
The first two trading days of July both closed at new record highs, marking 36 new closing highs for the S&P 500 year-to-date. On Tuesday, the U.S. Consumer Confidence Index rose to a 16-month high. Meanwhile, the housing market continues to be supporting low mortgage rates, as the average rate for a 30-year loan recently dipped back below 3.00%, according to Fannie Mae. The monthly employment report added 850,000 jobs, coming in higher than consensus for the month of June. Payrolls increased by 692,000 and initial weekly jobless claims fell to 364,000 this week, another post-pandemic low. ISM Manufacturing numbers came in within range and remain higher than average. Next week, we are looking forward to ISM Non-Manufacturing numbers, mortgage applications, along with initial jobless claims. In observance of the 4th of July holiday, the markets will be closed on July 5th. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact. We are wishing everyone a safe and fun holiday weekend.
Emily M. Cozad
Portfolio Analyst
June 28, 2021
The S&P 500 notched a new high today after several days of gains this week; and volatility, as measured by the VIX index, hit a new year-to-date low. Federal Reserve Chairman Powell testified to Congress this week and reiterated that the Fed expects inflation pressures to be temporary, which the market interpreted as positive after last week’s concern about the Fed raising rates sooner than previously expected. Treasury rates increased slightly this week, while oil hit a new year-to-date high (and is within 5% of a 5-year high). Today’s read on consumer inflation was in-line with expectations at 3.4% higher than a year ago and next week we look forward to the monthly jobs report. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 18, 2021
While the S&P 500 touched a new high on Tuesday, stocks sold off the rest of the week after the Federal Reserve began discussions about reducing bond purchases in the future, as well as possibly starting to raise rates in 2023. A handful of Fed committee members also see one rate hike possible in 2022. Shorter-term bond yields, like the 5-year Treasury, rose, while 30-year Treasury yields fell. The dollar strengthened this week, which put pressure on commodities, some of which had already been selling off. The Materials sector and various metals such as silver and gold lost over 5% this week, while lumber futures lost about 15% this week and are down nearly half from the early May highs. Corn futures were down 12% for the week through Thursday, but recovered somewhat on Friday. Tuesday’s report on producer inflation showed core inflation (excluding food & energy prices) up 0.7% in the past month and up 4.8% in the past year, in-line with expectations. The 4-week moving average of weekly jobless claims dipped below 400k for the first time in over a year. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor at https://mybuckingham.com/contact.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 11, 2021
This week the S&P 500 hit a new high for the first time in over a month; volatility fell to a new 1-year low and the growth style outperformed value. The weekly jobs report once again showed improvement while an inflation report was higher than expected: the May Consumer Price Index was up 5.0% from a year ago, or up 3.8% excluding food and energy prices. Paradoxically, Treasury yields fell to levels not seen in 3 months, with the 10-year Treasury touching 1.45% near the end of the week. The large spread between headline inflation rates over Treasury yields has our eyes on the Federal Reserve press conference next week on Wednesday afternoon. Will these numbers push the Fed into openly discussing the tapering of bond purchases? We will also get an inflation update at the producer level next Tuesday. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
June 4, 2021
The S&P 500 closed slightly higher during the holiday-shortened week, closing just shy of a new all-time high. In focus for investors this week was May’s monthly jobs report. Analysts were expecting 671,000 new hires during the month, but the numbers came in below expectations for a second month in a row at only 559,000 new jobs. Still, the unemployment rate ticked down to 5.8%. Market participants were not discouraged by the disappointing numbers, as they believed that the Fed will now be more likely to continue their accommodating monetary policy. The 10-year treasury yield moved lower after the jobs report, finishing flat on the week. Crude oil continued to climb higher, nearing $70 a barrel, as demand globally has increased due to worldwide vaccination programs taking hold. Elsewhere, the Biden administration and the GOP are still far apart on negotiations over infrastructure spending. Next week, we are looking forward to additional reads on inflation and housing market data. The replays for our three-part webinar for business owners is now available at https://vimeo.com/channels/buckinghamvideolibrary.
Neal G. Davis, CFA, CFP®
Senior Portfolio Manager & Research Analyst
May 28, 2021
The S&P 500 gained over 1% this week and had a positive return for the month of May. Weekly jobless claims improved significantly, declining from 444k to 406k, which pushed the 4-week moving average down from over 500k to 459k. For reference, in 2019 the level was usually just above 200k, which was historically low. Travel stocks gained this week after the CDC gave Royal Caribbean approval to begin mock voyages (round trips at sea) in late June, which will sail out of Miami with fully vaccinated crew and passengers if they are over age 16. Next week we look forward to the monthly jobs report, which may show national unemployment under 6% for the first time in over a year. The third and final part of our three-part webinar for business owners is Tuesday June 1st. Please visit https://mybuckingham.com/events to register. Finally, we wish you safe travels if you are venturing out this Memorial Day weekend!
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 21, 2021
The S&P 500 ended the week nearly unchanged, as did bond yields. Except for lower oil prices, many commodities rose this week as the dollar weakened slightly. Bitcoin hit its lowest price since February. Weekly jobless claims continue to improve; the U.S. may see further improvement as COVID restrictions are lifted and as many states cancel bonus unemployment benefits in the coming months. On Wednesday the Federal Reserve released the minutes, or notes, of their April 28th meeting. The path to higher rates may look like this: first talk about when to discuss reducing bond purchases (this week’s report), then discuss reducing bond purchases (June at the earliest), then reduce bond purchases, then stop bond purchases, then talk about raising rates, and then raise rates. The Fed has a long way to go before they raise rates to have any major effect on dampening the economy and containing inflation. The Fed is purposefully staying behind the curve during this cycle. Changes in tone or message are potentially more important to markets than when the Fed action actually occurs, because investors tend to look 6-12 months ahead. Next week we look forward to several consumer-related economic updates. The second part of our three-part webinar for business owners is Tuesday May 25th. Please visit https://mybuckingham.com/events to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 14, 2021
The Dow Jones Industrial Average crossed 35,000 for the first time this week, but stocks were generally lower by week’s end. Several stocks or themes that outperformed in 2020, particularly those at the most speculative edge of the market, underperformed this week. There were also sharp sell-offs in lumber and corn after those prices reached multi-year highs. Wednesday’s report on consumer inflation showed core inflation (excluding food & energy prices) up 0.9% in the past month and up 3.0% in the past year. Thursday’s report on producer inflation showed core inflation (excluding food & energy prices) up 0.7% in the past month and up 4.1% in the past year. All of these figures were higher than the average estimate. We would expect above-average inflation readings for several months to come, in part due to comparing to much lower prices a year ago (oil has more than doubled in the past 12 months, for example). The weekly jobless claims report on Thursday showed continued improvement, with 473,000 new jobless claims being filed. Friday’s reports on retail sales and consumer sentiment came in a bit below expectations, with inflation impacting both reports. Starting on Tuesday May 18th, we are co-hosting a three-part webinar series for business owners. Please visit https://mybuckingham.com/events to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
May 7, 2021
The S&P 500 hit another new high despite a surprisingly weak monthly jobs report. Some expected a stronger jobs number, which could have put pressure on the Fed to reduce stimulus. When the opposite was reported, yields fell and stocks rose. Initially the 10-year Treasury dipped below 1.5% for the first time in 2 months, but yields later came back to unchanged around 1.58%. The weekly jobless claims report on Thursday showed continued improvement but the monthly nonfarm payroll report on Friday showed only 266,000 jobs being added in April, well below the nearly 1 million job estimate. The 916,000 jobs added in March were revised down by 146,000 to 770,000. Sector rotation in the market drove value to outperform growth this week, as the give and take seems to be changing by the month. Earlier in the week, reads on manufacturing and services for April remained strong. Next week we look forward to fresh reads on inflation at both the consumer and producer level. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 30, 2021
The S&P 500 again touched a new high but didn’t change much for the second week in a row. Year-to-date, the S&P 500 has gained over 11%. With 60% of large companies having reported first quarter results, the “beat” rate for companies reporting higher than expected sales and earnings is still well above the 5-year average level. Facebook and Alphabet (aka Google) gained this week but both are part of the Communication Services sector, while the Technology sector lagged. The White House announced that 100 million U.S. adults are fully vaccinated against COVID-19 and guidelines continue to change towards a return to the pre-pandemic way of life. President Biden also released the American Families Plan, with its estimated $1.8 trillion cost to be paid in part with a higher tax bracket for the top 1% of earners, from 37% to 39.6%, and higher capital gains taxes for those earning over $1 million. The 3.8% Medicare tax would apply consistently to those making over $400,000 and other rules would change that affect estate taxes, real estate gains over a certain threshold, and carried interest. This week the initial read on first quarter GDP was +6.4%. This was a quarter-over-quarter comparison stated at an annualized rate. Next week we look forward to the monthly jobs report on Friday, which could be 5.7%. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 23, 2021
The S&P 500 set another new high this week, as positive economic news like lower jobless claims and strong PMI (Purchasing Managers Index) reads outweighed concerns about higher capital gains tax rates coming down the line. Higher taxes for those earning over $400,000 are expected to be proposed in the soon-to-be-released “American Families Plan”. This week the rotation within the market had a more defensive tilt, favoring the Healthcare sector, for example. First quarter earnings reports continue to roll in, with about a quarter of large companies having reported so far. The “beat” rate for companies reporting higher than expected sales and earnings is well above the 5-year average level. Next week we look forward to hearing from the Fed (rates should stay unchanged at very low levels) and getting the first read on Q1 GDP, which could be 6.5%. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 16, 2021
The S&P 500 set several new record closing highs and extended its streak of positive returns for a fourth consecutive week. Strength continues as markets enter a “show me” period for economic growth and company earnings. The United States’ largest banks reported earnings this week, with most topping analyst expectations for revenue and earnings per share growth. Big bank earnings also signal the start of “earnings season” with the majority of publicly traded companies expected to release Q1 2021 earnings over the coming weeks. On the economic front, consumers are spending again with March retail sales growing 9.8%, well ahead of expectations for 5.6% growth. The employment picture continues to improve with weekly initial jobless claims at 576,000, beating expectations and marking the lowest weekly total since the beginning of the pandemic. Next week we’ll be watching more quarterly earnings reports, inflation, and employment data. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Brad T. Gregory
Senior Portfolio Manager & Research Analyst
Investment Operations Manager
April 9, 2021
The stock market momentum continued, with the S&P 500 gaining 2.6% and setting another new record high. Technology stocks did well, helping growth outperform value by over 2% this week. Still, the tech-heavy NASDAQ composite is below its all-time high set nearly 2 months ago. Other parts of the investment universe, such as metals, yields, and volatility were fairly quiet, while the price of oil declined 3%. One read on inflation increased from last month, in part due to a comparison against low energy prices from a year ago. For March, the Producer Price Index showed 4.2% annual inflation (3.1% excluding food and energy prices), up from 2.8% for February and 1.7% for January. Next week we will get several different reads on the consumer: inflation, retail sales, and sentiment. If your needs are changing or if you would like more information on the markets or your portfolio, please contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
April 2, 2021
The S&P 500 crossed the 4,000 mark for the first time yesterday. The equity markets were not open today in observance of Good Friday, but today’s strong jobs report moved the futures market even higher. An estimated 916,000 jobs were added in March, bringing the national unemployment rate down to 6.0%. Other economic reads on consumer confidence and manufacturing were quite strong as well. Earlier this week, President Biden introduced at $2 trillion “American Jobs Plan” to upgrade the nation’s infrastructure, which he called a “once-in-a-generation investment in America”. Areas of focus include in-home care, affordable housing, electric vehicle incentives, repairing roads & bridges, electric grid & clean energy, and public schools, with spending focused on the next 8 years. This plan proposes increased corporate taxes over the course of 15 years. This follows the recent $1.9 trillion “American Rescue Plan” that included $1,400 stimulus checks, while in the coming weeks the “American Family Plan” is expected to be unveiled, which will propose tax increases on wealthy individuals, possibly at an income level of over $400,000. To view our past videos, including one highlighting our MyBuckingham mobile app, please visit https://vimeo.com/channels/buckinghamvideolibrary.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 26, 2021
This week saw only slight changes: the S&P 500 rose, the dollar strengthened, and gold fell, but each by less than 1%. Yields fell slightly as well. The VIX, a measure of volatility, declined to the lowest level since February 2020. Under the surface, however, it felt more like a risk-off week with recent high-flyers such as SPACs, Bitcoin, small cap, and certain Media stocks seeing losses. The defensive sectors: Staples, Healthcare, Utilities, and REITs (SHUR) each outperformed the S&P 500. Weekly jobless claims improved significantly, declining from 781,000 jobless claims to 684,000 in this week’s reading. This could foreshadow a good monthly jobs report next Friday, where the unemployment rate may fall to 6%. To view our past videos, including one highlighting our MyBuckingham mobile app, please visit https://vimeo.com/channels/buckinghamvideolibrary.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 19, 2021
Although the S&P 500 touched a new high, the index declined slightly for the week. The Tech-heavy NASDAQ is still about 7% off its February high but this week Growth and Value had similar performance. Volatility, as measured by the VIX, hit a 1-year low. Treasury yields increased again this week, with the 5-year reaching 0.90% and the 10-year reaching 1.75%. On Wednesday the Fed reiterated that near-zero rates are here to stay, likely until 2023, despite expectations for higher inflation. The Fed seems to want to see inflation move above 2% and see unemployment fall much further before thinking about raising rates. Several economic indicators fell a little short of expectations including weekly jobless claims, February retail sales, industrial production, and housing starts. Next week we will get updates on several consumer data points. For more information on the markets or your portfolio, we encourage you to contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 12, 2021
This week several stock indices reached new highs including the S&P 500, the small cap Russell 2000, and the Dow Jones Transportation Index. A recurring theme for several weeks, a higher 10-year Treasury yield, which touched 1.64%, again dampened performance of growth relative to value. The $1.9T stimulus bill was passed and direct deposits should start to hit bank accounts in a matter of days. Inflation reads for February increased from last month. The Consumer Price Index now shows 1.7% annual inflation (1.3% excluding food and energy prices), up from 1.4% last month. The Producer Price Index now shows 2.8% annual inflation (2.5% excluding food and energy prices), up from 1.7% last month. The next couple of readings could show even larger numbers, in part due to comparisons against low energy prices from March and April of 2020. Stock and bond market performance is now showing extreme 1-year readings as well, something that we will touch on in more detail in next week’s Market Insights newsletter. Next week the Fed will give an update, but the futures market is still not pricing in a change in the Fed Funds rate (currently an effective rate of 0.07%) in the next year. For more information on the markets or your portfolio, we encourage you to contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
March 5, 2021
This week the S&P 500 traded in a 5% range but ended the week with a small gain. Momentum stocks had another rough week while small cap stocks gained more than large cap stocks. The 10-year Treasury yield again impacted markets, briefly touching 1.62% before closing around 1.55% this week. Inflation expectations are rising with the general economic recovery and due to the $1.9T stimulus bill being debated in Congress. Do you know if filing your 2020 tax return now or intentionally waiting will help you maximize your potential stimulus payout? You can contact your Buckingham advisor to discuss. The global economic recovery, along with a smaller-than-expected production increase from OPEC, sent oil nearly 4% higher this week. With real interest rates (interest rates – current inflation) increasing, gold and silver declined again this week. Today’s monthly jobs report showed another improvement with more jobs being added than expected and a slightly lower unemployment rate of 6.2%. Services and manufacturing updates earlier in the week showed expansion as well. Next week we will be watching consumer and producer inflation updates for the month of February. For more information on the markets or your portfolio, we encourage you to contact your Buckingham advisor.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 26, 2021
Higher Treasury yields moved markets this week. The 10-year Treasury yield went above 1.6% for the first time in nearly a year, before retreating to 1.45%. This led to a risk-off move in stocks. Volatility increased, the S&P 500 declined about 1.5% this week, and value outperformed growth. Still, the S&P gained over 3% this month and remains positive for the year. For reference, the yield on the S&P 500 is just under 1.6% and higher bond yields have pushed the average 30-year mortgage rate to over 3.1%, about 0.3% higher than it was just a few weeks ago. This has slowed mortgage applications, including refinancing activity. Gold fell nearly 3% this week, putting its price at levels not seen since June, while oil prices rose to the highest in over a year, to over $60/barrel. For the next several weeks, 1-year stock performance will be lapping the sell-off of 2020. From the March 23, 2020 closing low to now, the S&P 500 has gained over 70%, highlighting the importance of sticking with stocks for the long run and not trying to time the markets. Next week we look forward to the monthly jobs report and several other macro data points. To learn more about how we help business owners, please click here: https://mybuckingham.com/services/business-services-and-tax-preparation.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 19, 2021
The market experienced a slight decline this week, as higher dividend-paying stocks in real estate and utilities sectors underperformed due to the continued uptick in interest rates. Financials and energy experienced relative outperformance. Financials benefit from higher interest rates, and energy consumption increased due to frigid weather from unprecedented winter storms in areas such as Texas. Weekly jobless claims continue to remain at elevated levels (861,000). In the cryptocurrency market, Bitcoin crossed a notable milestone at over $1 trillion in market value. Next week, we look forward to data on durable goods, consumer confidence, and consumer spending. To learn more about how we help business owners, please click here: https://mybuckingham.com/services/business-services-and-tax-preparation.
Allen Thuma, CFA
Director of Portfolio Management & Research
February 12, 2021
The S&P 500 had a small gain this week, which was still heavy with quarterly earnings reports. Small cap, mid cap, and international stock indices set multi-year highs, gaining around 2%. The 10-year Treasury yield climbed to 1.20% for the first time since March. We are keeping a close eye on inflation data because higher inflation could push bond yields higher. This week’s update on consumer inflation, the Core CPI (Consumer Price Index) was still tame at 1.4%. Stock and bond markets will be closed on Monday in observance of Presidents’ Day (technically Washington’s Birthday per the NYSE). This Tuesday, February 16th, we will be hosting a webinar explaining SPACs (Special Purpose Acquisition Companies) and Bitcoin. You can register here: https://mybuckingham.com/events/the-year-of-the-spac-and-digital-currencies. If your needs are changing or if you would like more information on the markets or your portfolio, please call us at (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
February 5, 2021
The S&P 500 gained over 4% this week, fully reversing last week’s loss while notching another new high. Last week’s headliner, Gamestock, was down over 80% this week. Silver, a target of the Reddit crowd early in the week, initially climbed 11% but ended the week with nearly no gain. A measure of stock volatility, the VIX index, fell sharply this week, more than reversing last week’s move. Several prominent CEOs announced their departures this week, including Jeff Bezos from Amazon and the leaders of Merck and UnitedHealth. This could signal companies are getting closer to an “after COVID” mindset as the long-tenured CEOs feel comfortable enough to pass control to the next generation. Today the monthly jobs report was released and it showed 49,000 jobs being added, with an improvement in the unemployment rate, which now stands at 6.3%. Another economic indicator, the Purchasing Managers’ Index (PMI), showed strength and the reading was better than expected. The PMI Purchasing Managers' Index (PMI) is a survey from over 400 companies and is considered a leading indicator for private sector services. Lastly, with nearly 300 of the S&P 500 companies having recently reported quarterly results, the earnings “surprise” rate is above normal, which is helping sustain higher stock prices. To learn more about how we help business owners, please click here: https://mybuckingham.com/services/business-services-and-tax-preparation.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 29, 2021
Gamestonk!! No, that isn’t a typo, it references a tweet by Tesla CEO Elon Musk, and it represents how this week the market and the media were consumed with the trading action in highly-shorted small cap stocks like GameStop (GME). A quick summary: thousands of individual investors drove the price of a handful of stocks into the stratosphere, as it forced short-sellers to buy the stocks (they thought would go down) at higher and higher prices, creating an upward spiral. We have not seen an impact on our individual holdings. With our eye on the long-run for your investments, we will continue to focus on quality factors such as end-market growth, innovation, profitability, debt, and valuation. In the short-run, this wild activity in a small part of the market may shake overall confidence a bit, which could lead to lower valuations/prices. It certainly will impact the possible range of outcomes for modeling short-selling and for options pricing. Reiterating our long-term focus, we would like to note that the range of historic stock market returns narrows, and skews positive, as time horizons lengthen. For example, over the past 30 years, the 1-year return of the S&P 500 has ranged from -38% to +34%, but the annualized rolling 10-year returns have ranged from -3% to +20%. The S&P 500 again hit a new high this week, but overall had a loss of around 3%, as volatility increased to the highest since before the Presidential election. To learn more about how we help business owners, please click here: https://mybuckingham.com/services/business-services-and-tax-preparation.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 22, 2021
In this 4-day trading week, due to the Martin Luther King Jr. Day holiday, stocks made fresh highs, gaining about 2%. Strength could be attributed to gains in large cap growth stocks such as Alphabet (Google), Facebook, Apple, Microsoft, and Amazon. Large cap value and growth performance leadership has been going back and forth for several months after growth handily outperformed in 2020. Volatility fell this week while interest rates stayed fairly steady. Corporate earnings season has begun, with several banks having recently reported, but the volume of companies reporting ramps up significantly next week. This Thursday we will also get the first read on Q4 GDP, which could be 4.4%.To learn more about how we help business owners, please click here: https://mybuckingham.com/services/business-services-and-tax-preparation.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 15, 2021
The S&P 500 took a breather from the recent positive momentum and declined about 1% this week. Mid-cap and small-cap stocks, however, gained. On the economic front there were several reports released this week: weekly jobless claims and December retail sales disappointed, inflation remains contained though inflation expectations are increasing, and manufacturing saw strength. Federal Reserve Chairman Powell recently said that when the time comes to raise interest rates the Fed would, but that “is no time soon”. The Fed continues to buy at least $120 billion in bonds each month, which helps keep bond prices higher and interest rates lower. We had a webinar for small businesses this week and the replay can be found here: https://vimeo.com/channels/buckinghamvideolibrary. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
January 8, 2021
Welcome to the new year! The positive momentum in the stock market continued as the S&P 500 set new highs this week, despite political changes and unrest seen in the capital. Many investors are expecting another round of stimulus. Interest rates rose as inflation expectations increased; the 10-year Treasury yield rose to 1.1%, the first time it has been over 1% since March. Today’s monthly jobs report showed the first net loss of jobs in many months, but the unemployment rate stayed the same at 6.7%. Stocks may be susceptible to a pullback with so much positive sentiment in the market, but even a 10% sell-off from here would put the S&P 500 above the pre-COVID highs from February 2020. We had two webinars this week, one about Financial Planning and the other about Investments, and the replays can be found here: https://vimeo.com/channels/buckinghamvideolibrary. We have another webinar on January 12th: “ The Latest Relief Package: What it Offers for Small Businesses” and you can register for it here: https://mybuckingham.com/events. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 31, 2020
The S&P 500 ended the year on a high note, with a small gain this week and a total return of over 17% this year. Small cap and international stocks did well too with double-digit returns, on average. The latest government stimulus bill was finally passed and payments should be hitting bank accounts in the coming days. All eyes will be on Georgia Tuesday night for results from the special election to select the final two Senate seats, though official results may not be known for several days due to mail-in ballots. This week’s jobless claims figure was slightly better than expected but the 4-week moving average increased. This continues to make the case for a weaker monthly jobs report next Friday. We will have a trio of webinars to kick off the new year - please visit the Events tab on mybuckingham.com to sign up for any or all of the sessions that will cover topics for financial planning, investments, and small businesses. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 24, 2020
The S&P 500 was down slightly this week after a loss on Monday, which came from the news that a more contagious variant of COVID-19 was found in the U.K. This led much of Europe to close its borders to the U.K. and raised fears that this version of COVID-19 would spread more quickly around the globe. Despite what seemed like a done deal between the House and Senate, hope for a government stimulus bill continues into next week. Two consumer confidence surveys were released this week, but with mixed indications. The University of Michigan survey showed a notable decline from the month prior, led by a lower “present situation” component. The Conference Board survey barely declined, as its “current conditions” component was only slightly lower. Markets will be closed next Friday, and the monthly jobs report will be released on January 8. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 18, 2020
The S&P 500 declined about 1% this week as government stimulus talks continue to stall. Only a handful of companies (with off-cycle fiscal years) are expected to report earnings in the coming weeks. For fourth quarter results, most of which will be reported in January/February, sales and earnings are still expected to show year-over-year declines. 2021 is expected to show higher sales and earnings in each quarter compared to 2020. Inflation remains tame with core consumer inflation rising 1.6% year-over-year and core producer price inflation rising 1.4% year-over-year. Next week we look forward to the final Federal Reserve meeting of the year. Currently, the futures market is expecting the Fed Funds rate to stay near 0% through all of 2021. Lastly, we would like to highlight our recent quote in US News & World Report. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 11, 2020
The S&P 500 declined about 1% this week as government stimulus talks continue to stall. Only a handful of companies (with off-cycle fiscal years) are expected to report earnings in the coming weeks. For fourth quarter results, most of which will be reported in January/February, sales and earnings are still expected to show year-over-year declines. 2021 is expected to show higher sales and earnings in each quarter compared to 2020. Inflation remains tame with core consumer inflation rising 1.6% year-over-year and core producer price inflation rising 1.4% year-over-year. Next week we look forward to the final Federal Reserve meeting of the year. Currently, the futures market is expecting the Fed Funds rate to stay near 0% through all of 2021. Lastly, we would like to highlight our recent quote in US News & World Report. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
December 4, 2020
Once again the S&P 500 and other stock indices, like the small cap Russell 2000 and broad international benchmarks, made new closing highs today. The Dow closed over 30,000 on a weekly basis for the first time and a volatility index, the VIX, remains near its lowest levels since March, at just above 20. Stocks continue to focus on the promise of vaccines that could start to roll out in just a couple of weeks, though it will take many months for vaccines to become widely available. Longer-term Treasury yields continue to grind higher, with the 10-year yield just shy of 1%. In today’s monthly jobs report, the headline unemployment rate of 6.7% showed improvement, but the participation rate fell, meaning the gains were not very robust. Rising COVID-19 cases since mid-November (the reference week for the jobs survey ended 11/14) may lead to a weaker jobs report for the month of December. Next week we look forward to updates on inflation data. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 20, 2020
On Monday, the S&P 500 started off by making a new daily closing high, but the index declined slightly for the week. The Dow Jones Industrial Average made an intraday high and closing high on Monday, nearly touching the 30,000 mark for the first time. The small cap Russell 2000 Index also made new highs this week. The market initially rallied on news from Moderna that their COVID-19 vaccine trail was successful with 94.5% effectiveness. Later in the week Pfizer/BioNTech updated their data showing 95% effectiveness. Today, both companies applied for emergency use authorization with the FDA. Both companies expect approval of their vaccines as soon as mid-December. Next week should be fairly quiet, with the markets closed on Thursday for Thanksgiving and open only until 1pm on Friday. Our next Market Recap will be posted the following week on December 4th. We thank you for your continued trust and support, and we hope you have a great Thanksgiving. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 13, 2020
On Monday, Pfizer and partner BioNTech announced the successful results of their Phase 3 COVID-19 vaccine trial, which showed 90% effectiveness. This is wonderful news for humanity. We hope and expect that several other successful vaccines will be announced in the coming days and months. The initial stock market reaction was very positive, sending the S&P 500 to a new intraday high. The S&P 500 went on to make a closing high on a weekly basis and is up about 12% this year. The markets and the economy are not always the same thing; we expect some difficult months ahead with rising COVID-19 case counts and hospitalizations. The outlook for stocks seems to have already moved past politics and past the winter, with a focus on when we might start to enjoy a post-COVID-crisis world. Bond yields rose, with the 10-year Treasury moving as high as 0.97%, historically low but at the second-highest level seen since March. On November 17th we will have a very important webinar for business owners discussing Payroll Protection Program (PPP) loan forgiveness and the significant need for proper tax planning and treatment. If you or someone you know owns a business, please visit the Events page to register.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
November 6, 2020
Stocks made gains nearly every day this week and the S&P 500 climbed over 7%, more than making up last week’s loss. Today the S&P 500 made a new weekly closing high, but remains about 2% below all-time highs set on September 2nd. The Technology sector outperformed and the Healthcare sector hit new highs as the Senate is expected to remain in Republican control, which will lead to fewer regulatory changes than were expected in a “blue wave” scenario. International stocks, gold, and even bond prices gained, but the dollar weakened this week. The strong monthly jobs report for October showed a 1% improvement in the unemployment rate, which now stands at 6.9%. The Federal Reserve announced no changes to interest rates, as expected, and their press release language was nearly unchanged from mid-September. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 30, 2020
Stocks fell about 6% this week as additional fiscal stimulus was definitively put on hold and as coronavirus cases rose in the U.S. and abroad. Stock volatility rose to the highest since June, but bond yields and metals prices saw relatively small changes this week. Stock investors are concerned that additional shutdowns like the 4-week lockdown announced yesterday in France will lead to lower global economic activity. Third quarter earnings announcements are still rolling in, with about two-thirds of the S&P 500 having reported so far. While earnings are lower year-over-year, the reports are generally coming in above expectations. This week the first read on third quarter GDP was +33.1%. This was a quarter-over-quarter comparison stated at an annualized rate. Second quarter GDP, for reference, was -31.4%. Next week we expect volatility around the election, but we look forward to the monthly jobs report on Friday. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research
October 23, 2020
For the second week in a row, the bulk of the stock market’s movement for the week came on Monday. Unlike last week, this week the market declined as “significant disagreements” remained between Democrats and Republicans in fiscal stimulus talks. Stocks traded up or down several times this week on positive or negative headlines around these negotiations. It seems more and more likely that a fiscal stimulus bill will not be passed before the election and that these talks were just for posturing. Weekly jobless claims improved and continuing claims fell, again showing signs of a slowly improving jobs market. Next week we will get the first read on third quarter GDP, which should show a significantly positive number. This will be a quarter-over-quarter comparison stated at an annualized rate. Second quarter GDP, for reference, was -31%. To learn more about our financial planning subscription service, please call (937) 435-2742.
Ryan P. Johnson, CFA, CFP®
Director of Portfolio Management & Research