{"id":6036,"date":"2022-09-06T12:12:10","date_gmt":"2022-09-06T18:12:10","guid":{"rendered":"https:\/\/www.keystonefinancial.com\/?post_type=oi_article&p=6036"},"modified":"2022-09-06T12:12:12","modified_gmt":"2022-09-06T18:12:12","slug":"market-commentary-september-6-2022","status":"publish","type":"oi_article","link":"https:\/\/www.keystonefinancial.com\/articles\/market-commentary-september-6-2022","title":{"rendered":"Market Commentary | September 6, 2022"},"content":{"rendered":"\n

You may have heard this one: Don\u2019t fight the Fed.<\/p>\n\n\n\n

The Fed is the Federal Reserve Bank of the United States. Among other things, the Fed influences monetary conditions in pursuit of price stability and full employment. As we\u2019ve seen recently \u2013 with unemployment low and inflation high \u2013 the Fed\u2019s job isn\u2019t simple or straightforward.<\/p>\n\n\n\n

\u201cDon\u2019t fight the Fed\u201d is a bit of wisdom that encourages investors to align their portfolios with current monetary policy. \u201cThe rationale is deceptively intuitive. If the Federal Reserve is cutting interest rates or is generally accommodative, then the ensuing liquidity should provide a positive backdrop for risk assets like stocks. If the Fed is raising rates or constraining liquidity, that activity tends to be a headwind for equities and other assets,\u201d reported Steve Sosnick of Barron\u2019s.<\/p>\n\n\n\n

After the Fed confirmed its commitment to rein in inflation by raising rates, the Standard & Poor\u2019s 500 Index finished August lower.<\/p>\n\n\n\n

\u201cIn retrospect, bulls should maybe have been more worried that one of the most reliable tools the Federal Reserve has for subduing inflation is to scare the U.S. equity market,\u201d reported Isabelle Lee and Lu Wang of Bloomberg. They cited studies that found, \u201cDisinflationary effects have historically kicked in when the S&P 500 drops more than 19%\u2026It breached that level in June and is now approaching it again\u2026every dollar lost in stocks leads to a 3-cent reduction in spending.\u201d<\/p>\n\n\n\n

It will be interesting to see whether spending moves lower. While stock markets dropped in August, consumer sentiment moved higher. After falling for three consecutive months, the Conference Board\u2019s Consumer Confidence Index\u00ae increased in August. (The Index sets 100 at 1985 sentiment levels. In 1985, the United States was in its third year of economic growth following a recession.) Last month, sentiment was 103.2, up from 95.3 in July.<\/p>\n\n\n\n

Some economists see consumer sentiment as a lagging economic indicator, meaning that it reflects what happened in the past, because it takes time for consumers to respond to economic events. Others think consumer sentiment is a leading indicator because it suggests where spending, which is the biggest driver of U.S. economic growth, may be headed. Consumer spending accounts for close to 70 percent of gross domestic product (GDP), which is how economic growth is measured.<\/p>\n\n\n\n

Last week, major U.S. stock indices finished lower after the U.S. employment report showed solid jobs growth, suggesting that the Federal Reserve will continue to raise rates, reported Ben Levisohn of Barron\u2019s. U.S. Treasury yields rose across the yield curve when compared to the previous week\u2019s close.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Back to School<\/h3>\n\n\n\n

Across the country, school supplies have been purchased and many children have returned to the classroom to start a new school year. The give and take between teachers and students can produce some memorable \u2013 and humorous \u2013 moments. The following are from stories shared in Reader\u2019s Digest.<\/p>\n\n\n\n

Teacher: Where is your homework?
Student: It\u2019s still in my pencil.<\/p>\n\n\n\n

Teacher: Why can\u2019t freshwater fish live in salt water?
Student: The salt would give them high blood pressure.<\/p>\n\n\n\n

Teacher: How would you make the world a better place?
Student: I\u2019d make potato skins a main dish rather than an appetizer.<\/p>\n\n\n\n

Teacher: Mira went to the library at 5:15 and left at 6:45. How long was Mira at the library?
Student: Not long.<\/p>\n\n\n\n

Teacher: Why do you think our librarian is leaving?
Student: Because she\u2019s read all our books?<\/p>\n\n\n\n

Teacher: In Franz Kafka\u2019s The Metamorphosis, a man who is discontented with his life, wakes up to find he has been transformed into a large, disgusting insect.
Student: So, is this fiction or nonfiction?<\/p>\n\n\n\n

Teacher: Why aren\u2019t you wearing your glasses?
Student: My glasses are for reading, not math.<\/p>\n\n\n\n

What are your favorite school stories?<\/p>\n\n\n\n


\u201cI have learned silence from the talkative, toleration from the intolerant, and kindness from the unkind; yet strange, I am ungrateful to those teachers.\u201d
\u2014Khalil Gibran, writer and poet<\/p>\n\n\n\n

<\/p>\n\n\n\n

Investment advisory services offered through\u00a0Keystone Financial Services, an SEC Registered Investment Advisor. These views are those of Carson Coaching, not the presenting Representative, the Representative\u2019s Broker\/Dealer, or Registered Investment Advisor, and should not be construed as investment advice. This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker\/dealer. Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.\u00a0 However, the value of fund shares is not guaranteed and will fluctuate. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client\u2019s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index. The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED),\u00a0https:\/\/fred.stlouisfed.org\/series\/GOLDPMGBD228NLBM. The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. The Dow Jones Industrial Average (DJIA), commonly known as \u201cThe Dow,\u201d is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Past performance does not guarantee future results. Investing involves risk, including loss of principal.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete. There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss. Consult your financial professional before making any investment decision. Investment advisory services offered through\u00a0Keystone Financial Services, an SEC Registered Investment Advisor.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

You may have heard this one: Don\u2019t fight the Fed. The Fed is the Federal Reserve Bank of the United States. Among other things, the Fed influences monetary conditions in pursuit of price stability and full employment. As we\u2019ve seen recently \u2013 with unemployment low and inflation high \u2013 the Fed\u2019s job isn\u2019t simple or […]<\/p>\n","protected":false},"author":14,"featured_media":6038,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":""},"categories":[],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/6036"}],"collection":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article"}],"about":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/types\/oi_article"}],"author":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/comments?post=6036"}],"version-history":[{"count":1,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/6036\/revisions"}],"predecessor-version":[{"id":6039,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/6036\/revisions\/6039"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media\/6038"}],"wp:attachment":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media?parent=6036"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/categories?post=6036"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/tags?post=6036"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}