Blog

The Long Run is Boring

May 17, 2025

Ruminating on those who spend their careers as markets or economics pundits, Bloomberg columnist Joe Weisenthal often opines that, to him, only the medium-term is interesting. The short- and long-term are simply not interesting or worth talking about.

The Markets (as of market close May 9, 2025)

May 13, 2025

Stocks closed mostly lower last week as investors looked ahead to trade negotiations between the United States and China over the weekend. Despite the announcement of a trade deal between the United States and the United Kingdom, investors remained unsure of the extent of that deal and, more particularly, whether any meaningful progress would be made with China. As has been the case over the last several weeks, the stock market was marked by volatility.

The Markets (as of market close May 2, 2025)

May 5, 2025

Wall Street enjoyed another solid week of gains on the heels of some strong corporate earnings data, a better-than-expected jobs report, and more signs that the White House and China may be open to trade talks. By the close of trading last Friday, the Dow had posted 10 straight sessions of gains, while the S&P 500 enjoyed nine consecutive sessions. Investors have seen signs that the economy is resilient in the face of tariffs, despite the fact that the GDP contracted in the first quarter.

FYI on GDP

May 3, 2025

The Bureau of Economic Analysis released its advance estimate for first quarter GDP on Wednesday, reflecting an economic decrease of 0.3%. Businesses scrambled to get ahead of tariffs, sending imports soaring. Most headlines keyed upon surging imports as the driver for GDP’s decline, which has led to a widespread misunderstanding of how imports impact the GDP figure.

The Markets (as of market close April 25, 2025)

April 28, 2025

Wall Street enjoyed a solid week of gains last week as investors were encouraged by signs of progress in the U.S.-China trade dispute. Each of the benchmark indexes listed here moved higher, driven by gains in AI megacaps and some blue-chip stocks. First-quarter earnings season is in full swing. Of the 180 S&P 500 companies reporting so far, 73% beat expectations. Ten of the 11 market sectors posted weekly advances, with the exception of consumer staple companies, which dipped about 0.73%.

King Dollar: A Case of Regicide?

April 25, 2025

The impacts of the US dollar’s foreign exchange market fluctuations on financial assets and the economy are varied and somewhat confusing.

Where are the Bond Market Vigilantes?

April 19, 2025

One of the more striking reactions in capital markets after President Trump’s tariff announcement on April 2 was in the US government bond market. The 10-year US Treasury note yield sold off. Its yield popped from 4% to 4.5% in a matter of days. That is a rapid increase in the typically moribund government bond market.

The Markets (as of market close April 11, 2025)

April 14, 2025

A late-week rally helped push stocks higher to close a turbulent week on a favorable note. Last week began with stocks mixed as investors tried to gauge President Trump's on-again, off-again tariff policy. Ten-year Treasury yields jumped nearly 20 basis points to 4.20% last Monday, rebounding from the previous week's six-month low. Stocks retreated last Tuesday following the administration's threat of a 104% tariff on China, effective the following day.

The Markets (as of market close April 4, 2025)

April 8, 2025

Wall Street endured its worst week since the Covid crisis as investors shunned risk in response to inflation and recession fears following President Trump's sweeping tariffs and China's immediate retaliatory response. Despite a better-than-expected jobs report, comments made last Friday by Federal Reserve Chair Jerome Powell indicated that, while the economy was in a good place, the administration's current economic policy raised the risk of higher unemployment and inflation.

The Markets (as of market close March 28, 2025)

April 1, 2025

Despite getting off to a good start, stocks wavered throughout much of last week, ultimately closing lower. Each of the benchmark indexes lost ground, with the S&P 500 finishing the week lower for the fifth time in the last six weeks after reaching record highs in mid-February. Several negative factors weighed on investors, including hotter-than-expected core consumer prices and a slowdown in consumer spending.

Is the Bear Still in Hibernation?

March 29, 2025

Stock market corrections are defined as declines of at least 10% from recent highs. They are called corrections because the drop often “corrects”, and prices return to the longer-term trend. Since 1974, the S&P 500 has experienced 27 market corrections with the most recent one occurring in the summer of 2023.

The Markets (as of market close March 21, 2025)

March 25, 2025

Wall Street saw a weekly gain last week for the first time in four weeks. Fed forecasts of two more interest rate cuts this year helped renew investor confidence. Each of the benchmark indexes closed higher last week, led by the Dow, which gained over 1.0%. All 11 of the S&P market sectors advanced, led by financials, health care, industrials, and information technology. Bond values rose higher, dragging yields to their lowest levels in more than two weeks.

Powell Plays It Cool

March 22, 2025

One of the key macroeconomic policies pursued by the Trump Administration is the imposition of tariffs on imports. The policy has attracted some applause, some ire, but more than anything, it has created a lot of confusion.

The Markets (as of market close March 14, 2025)

March 18, 2025

Wall Street saw momentum ebb and flow throughout last week, with stocks ultimately closing lower for the fourth week in a row. Investors were influenced by growing uncertainty over inflation and tariffs. Despite a strong close to the week, the overall decline in equities has been notable. In less than a month, the benchmark indexes moved into correction territory at a rapid pace.

Corrections, Headwinds, and Tailwinds

March 15, 2025

The US stock market selloff officially reached “correction” territory this week as measured by the arbitrary figure of a 10% peak-to-trough decline. Stock market weakness began in late February, when Walmart issued disappointing earnings guidance for 2025. Walmart is a bellwether stock and is part of the now-struggling “momentum” factor, which includes such names as Nvidia and Tesla.

The Markets (as of market close March 7, 2025)

March 10, 2025

Stocks suffered through their worst week since September last week, with each of the benchmark indexes listed here falling more than 2.3% with the exception of the Global Dow, which gained less than 1.0%. Investors faced trade tensions, policy uncertainty, and a slightly weaker-than-expected jobs report. Each of the market sectors declined last week, with the exception of health care. Information technology dropped more than 7.4%.

Are Tariffs a Red Herring?

March 8, 2025

US stocks have hit a rough patch. Although the S&P 500 is only down 2% for the year, the tech-heavy NASDAQ and the small-cap Russell 2000 indexes are down about 6% and 7% year-to-date, respectively.

Stocks Have Looked “Expensive” For a Looong Time

February 28, 2025

There is consternation across professional investors that the US stock market has become expensive relative to corporate earnings. An “overvalued” stock market is viewed as negative because the most typical way stocks approach “fair value” is by their prices falling. The other way for stocks to become fairly priced would be for earnings to grow while prices remain steady, but that takes time and a strong collective belief in what the future holds for earnings.

The Markets (as of market close February 21, 2025)

February 25, 2025

Wall Street saw stocks close lower last week as investors soured on risk following the release of weaker-than-expected economic data and inflation worries. Each of the benchmark indexes ended the week in the red. Among the market sectors, consumer discretionary and communication services underperformed. Bond prices moved higher on increased demand, dragging yields lower. Crude oil prices declined for the third straight week. The dollar index ticked lower, while gold prices advanced.

The Markets (as of market close February 14, 2025)

February 18, 2025

The markets ended last week higher, despite falling retail sales and ever-changing tariff proposals from the administration. Each of the benchmark indexes listed here gained ground, led by the Global Dow and the NASDAQ. Information technology and consumer staples led the market sectors, while consumer discretionary, health care, and financials underperformed. Crude oil prices trended lower, as did the dollar. Gold prices eked out a weekly gain.

Capital Investment Plans Perking Up

February 15, 2025

In recent weeks, the Trump administration has been floating, implementing, and delaying a wide range of tariffs on imported goods from several countries. The list of tariffs is too long to inventory here, but much digital ink has been spilled about the varying effects such trade policies are expected to have upon consumer prices and employment.

The Markets (as of market close February 7, 2025)

February 11, 2025

The markets closed lower last week as investors reacted to the possibility of additional tariffs from the Trump administration, the potential for rising inflation, a weak earnings report from a major Megacap, and a lower-than-expected jobs report. Of the indexes listed here, only the Global Dow managed to eke out a weekly gain. The remaining indexes closed lower, led by the Dow and the NASDAQ. Ten-year Treasury yields rebounded last Friday, but not enough to keep from ending last week lower.

Why Haven’t Higher Interest Rates Dented Stocks?

February 8, 2025

Theoretically, a stock price is the present value of all the expected future cash flows (e.g., profits) per share that a company will generate as a going concern. When interest rates rise, the present value of those cash flows falls, all else equal. This is sometimes referred to as the “time value of money” (and is also why bond prices move inversely with bond yields).

The Markets (as of market close January 31, 2025)

February 3, 2025

Stocks trended higher for much of last week until Friday, when a Friday slide pulled several of the benchmark indexes listed here lower. Only the Dow and the Global Dow ended the week with gains, while the NASDAQ, the S&P 500, and the Russell 2000 finished in the red. Last Friday, word that the president would enforce tariffs against Canada, China, and Mexico cooled investors' appetite for risk, sending bond yields and the dollar higher.

Heavy Lies the Crown

February 1, 2025

NVIDIA, the second largest constituent in the S&P 500 index, has become one of the most valuable companies on the planet because of its monopoly-like control of the microchips that go into AI architecture. Hundreds of billions of dollars have been deployed as companies have raced to build out their AI frameworks.

The Markets (as of market close January 24, 2025)

January 27, 2025

Wall Street closed up last week as investors considered the bevy of executive orders issued by President-elect Donald Trump during his first week in office. Each of the benchmark indexes listed here ended the week higher, led by the Global Dow and the Dow. Communication services, health care, and industrials outperformed among the market sectors, while energy lagged. Ten-year Treasury yields ticked higher. Crude oil prices dropped nearly 4.5%, the largest weekly decline since November...

Investor Attention Shifts to Europe

January 25, 2025

Europe’s stock markets have badly trailed the US market in recent years. Some of this performance disparity has been attributed to a lack of fast-growing companies in Europe, particularly in the technology sector.

P/E Ratios Do Not Mechanically Predict Returns

January 18, 2025

The US stock market’s price-to-earnings (P/E) ratio, defined as the price per share of all the stocks in the S&P 500 index divided by next year’s expected earnings per share, is elevated relative to history. It stands at 21x (“21 times”) next year’s earnings. The average P/E over the last thirty years is 17x.

The Markets (as of market close January 10, 2025)

January 13, 2025

Stocks fell sharply last week as favorable economic data furthered sentiment that the Federal Reserve would keep interest rates elevated for a longer period of time this year. Each of the benchmark indexes lost value with only energy and health care advancing, while the remaining market sectors ended the week in the red. Crude oil prices rose to levels not seen since ...

Why Are Bond Yields Rising?

January 11, 2025

On September 18th last year, the Federal Open Market Committee – the part of the Fed that makes interest rate decisions – gathered and decided to lower its overnight target interest rate by 0.50%. The move was the Fed’s first interest rate cut since it began hiking rates in 2022 to tackle inflation. At its next two meetings in November and December, the Fed cut by 0.25% each, lowering its target interest rates by 1% in total.

The Markets (as of market close December 13, 2024)

December 17, 2024

Stocks pulled back last week as tech shares pared gains from the prior week. The NASDAQ posted a minimal gain, while the S&P 500 retreated from recent record highs. Nine of the 11 market sectors declined last week, with only consumer discretionary and communication services advancing. Investors will be paying close attention to the Federal Open Market Committee, which meets December 17-18, at which time the Committee will have to decide if the recent uptick in price inflation is...

Considering Rising US Stock Market Valuations

December 14, 2024

2024 has been quite a year for the US stock market. The S&P 500 is up 27%. The worst peak-to-trough drawdown was only 8%, well below the average drawdown (14%) for a calendar year. There have been 56 all-time highs, which equates to a new high every four trading days. There have been only three down days of -2% or worse.

The Markets (as of market close December 6, 2024)

December 10, 2024

A stronger-than-expected jobs report (see below) helped drive stocks mostly higher last week and raise optimism of an interest rate cut when the Federal Reserve meets later in December. Consumer discretionary, communication services, and information technology helped drive the market, which was otherwise tempered by downturns in energy, utilities, real estate, and materials.

Do Markets Care About Tariffs?

December 7, 2024

Some of the lasting stock market memories of President-elect Trump’s first term were the daily gyrations he was able to stimulate simply by uttering the word “tariff”. Those market swings now register as barely a blip, and the market did just fine whilst Trump was president. The financial media loved to amplify those bumps, though. It made for exciting news.

The Markets (as of market close November 29, 2024)

December 3, 2024

Thanksgiving week proved to be a positive one for stocks. Each of the benchmark indexes listed here closed higher, led by the Dow and the Russell 2000. Financials, consumer staples, and industrials led the market sectors, with only energy and communication services declining.

The Markets (as of market close November 15, 2024)

November 19, 2024

Last week saw stocks close markedly lower as investors were discouraged by hawkish comments from Federal Reserve Chair Jerome Powell, who put a damper on the likelihood of another interest rate decrease this year. Among the market sectors, energy, financials, and utilities closed the week higher, while the remaining sectors ended the week in the red, led by health care, which saw stocks fall after President-elect ...

Everyone is Gloomy About Europe

November 16, 2024

One of the more notable market developments since the election has been the sliding of Europe’s stock markets. The US market’s S&P 500 index has risen 2% since election day, whereas a basket of European stocks tracked by the Vanguard FTSE Europe ETF has slipped 4%.

The Markets (as of market close November 8, 2024)

November 13, 2024

Investors had plenty to think about last week as they focused on the results of the presidential election and the Federal Reserve's move to further reduce interest rates (see below). Each of the benchmark indexes listed here closed up by the end of the week, with consumer discretionary, information technology, and financials outperforming.

Higher Interest Rates – A Fait Accompli?

November 9, 2024

The US stock market posted its best post-election day ever after Trump’s election win this week, rising 2.5%. The previous best post-election day was the trading session following Biden’s election in 2020, when the market rose 2.2%...

The Markets (as of market close November 1, 2024)

November 5, 2024

Wall Street saw stocks end the month of October with a whimper last week, although equities began November on a high note. Each of the benchmark indexes listed here closed last week lower, except the Russell 2000. A surprisingly weak jobs report (see below) at the end of the week was offset by solid earnings reports from a couple of tech giants.

Be Wary of Election Clichés

November 2, 2024

Last week, JP Morgan suggested that the recent rise in long-term interest rates could be linked to the possibility of a Trump election victory next week. A popular bond market “Trump Trade” has been to wager that short-term rates will fall whilst long-term rates will rise – a yield curve “steepening” trade.

The Markets (as of market close October 25, 2024)

October 28, 2024

Tech shares helped the NASDAQ close up last week. The remaining indexes listed here didn't fare as well. Renewed concerns about the Federal Reserve's interest rate policy dampened investor appetite for risk. Bond prices also faded during the week, driving yields higher. Crude oil prices climbed higher as investors monitored ongoing tensions in the Middle East.

A Product of Expectations

October 26, 2024

Back in mid-September, it seemed clear that the Federal Reserve leadership’s forward guidance (their interviews, committee minutes, jawboning, etc.) pointing to interest rate cuts had successfully begun to lower interest rates. The 30-year mortgage rate had dropped to a 12-month low (6.1%) and the 10-year Treasury note had eased down to 3.6%. The Fed proceeded to cut its target rate by half a percent, a big move for the Fed, and it felt like the interest rate downtrend had begun.

The Markets (as of market close October 18, 2024)

October 21, 2024

Wall Street marked another week of gains last week, with each of the benchmark indexes climbing higher. The Dow and the S&P 500 attained new records, while the NASDAQ rode a spurt in tech and communication shares. Nine of the 11 market sectors closed the week higher, led by utilities, financials, and real estate.

Are Tech Stocks Overvalued?

October 19, 2024

As measured by the index provider MSCI, the US currently makes up 64% of the global stock market. Ten years ago, the US share was less than half. The increase in the US weight is attributable to relative performance: the US stock market has trounced stock markets around the world over that time.

The Markets (as of market close October 4, 2024)

October 7, 2024

Investors were confronted with plenty of market-moving information last week as they waded through negative developments and some positive signs. Growing tensions in the Middle East and a slowdown in the manufacturing sector were causes for concern, while a better-than-expected jobs report (see below) helped alleviate some of those worries, at least for a time.

An Unusual Macro Environment

October 5, 2024

Luke Kawa from Sherwood News noted this week that the US stock market, gauged by the S&P 500 index, is off to its best first three-quarters of a year in the 21st century. The market was up over 20% year-to-date through the end of September.

The Markets (as of market close September 27, 2024)

October 1, 2024

Wall Street enjoyed solid gains last week, following a rough start to the month. Each of the benchmark indexes listed here advanced, with the exception of the Russell 2000, which is generally the most volatile of the aforementioned indexes. Eight of the 11 S&P 500 market sectors closed the week ahead, led by materials and utilities.

Welcome Back, Dollar Weakness

September 28, 2024

Due to the end of massive debt-fueled overinvestment in real estate, China’s economy has dramatically slowed. As most developed countries’ central banks, including the Federal Reserve, have been raising interest rates to fight inflation in recent years, China has been facing the opposite problem: deflation.

The Markets (as of market close September 20, 2024)

September 24, 2024

The interest rate decrease by the Federal Reserve helped drive stocks higher last week. Each of the benchmark indexes listed here closed higher, led by the Russell 2000. Communication services, energy, and utilities were the best performing market sectors, while consumer staples, health care, and real estate lagged. Gold prices surged past $2,600.00 per ounce, hitting a new, record high on Friday.

Fight the Fed?

September 21, 2024

On Wednesday this week, the Federal Reserve’s Open Market Committee (the FOMC) decided to reduce its target interest rate by 0.50%. There was debate in markets about whether the Fed would go with a smaller cut of 0.25%, but it appears that Fed Chair Jerome Powell was able to wrangle FOMC consensus around a larger cut at the outset of its widely expected rate-cutting cycle.

The Markets (as of market close September 13, 2024)

September 17, 2024

Equities rallied notably last week as investors awaited this week's Federal Reserve meeting in anticipation of at least a 25.0-basis-point reduction in interest rates. Nine of the 11 market sectors ended last week higher, led by information technology. Only financials and energy lagged. The yield on 10-year Treasuries slipped to its lowest level since May 2023. Crude oil prices posted the first weekly advance in over a month.

The Interest Rate Cuts Have Already Begun

September 14, 2024

The big debate in markets over the last few weeks has been whether the Federal Open Market Committee (the “FOMC”), the part of the Federal Reserve that sets interest rate policy, will reduce its target overnight interest rate by 0.25% or by 0.50% at its September 18 meeting. Futures markets show that there is a dead heat between the two potential moves. The current effective overnight interest rate stands at 5.3%.

The Markets (as of market close September 6, 2024)

September 11, 2024

September clearly got off to a rough start for Wall Street. Stocks plunged lower on fears of an economic decline and a waning labor market. Investors feared that the Federal Reserve, which is now more likely to drop interest rates by at least 50.0 basis points when it meets in a few weeks, may be responding too late. Tech stocks took a big hit with the NASDAQ falling nearly 6.0% last week and nearly 12.0% since July 10. Consumer staples, real estate, and utilities were the only market sec

Reasons for Global Equity Market Diversification

September 7, 2024

US large-cap stocks have dominated global equity market returns for several years. There is a fundamental reason for the outperformance: big US corporations have been able to grow earnings at a more rapid pace than foreign multinationals.

The Markets (as of market close August 23, 2024)

August 27, 2024

Investors finally heard what they had been waiting for after Federal Reserve Chair Jerome Powell gave clear indications that the central bank will lower interest rates in September. Powell noted that the labor market has cooled and inflation is slowing. In an up and down week for stocks, each of the benchmark indexes listed here ended up closing higher, led by the RUSSELL 2000.

Get a Move On, Fed

August 24, 2024

The BLS released its annual revision to its payroll data this week. Over the year through March, average monthly job gains were revised down to 174,000 from the originally estimated 242,000. While this large downward revision was expected by most economists, it does indicate a much less robust labor market than originally thought existed for the year.

The Markets (as of market close August 16, 2024)

August 20, 2024

Wall Street rebounded after a rough start to the month, to close out its best week of the year. Investors saw alot of economic data that did little to change the expectations of an interest rate reduction in September. Last week's gains ended four straight weeks of losses, fueled by concerns that the Federal Reserve hadn't lowered interest rates soon enough to prevent a major economic slowdown.

Investors Like Earnings

August 19, 2024

A few weeks ago, the US stock market experienced a violent bout of volatility, ultimately selling off over 8% from its July peak. Given inflation is dwindling and the unemployment rate is rising, the Federal Reserve’s reluctance at its last meeting to commit to cutting interest rates led to investor consternation. Stock market volatility spiked, which created pressure on large leveraged bets that volatility would remain low.

The Markets (as of market close August 9, 2024)

August 13, 2024

Market volatility continued last week as stocks tumbled Monday and Wednesday, only to rebound at the end of last week, but not enough to avoid closing in the red for the second week in a row. Each of the benchmark indexes listed here lost value, with the small caps of the Russell 2000 falling the furthest. Despite the recent downturn, the indexes remain ahead year to date.

Hard Landing Odds are Non-Zero

August 10, 2024

Over the last two weeks, volatility returned to global stock markets. On Monday, the Japanese stock market plunged over 12%, its worst day since 1987. That day, the S&P 500 fell 3%. The VIX, a gauge of US stock market volatility, shot up to its highest levels since the first crazy pandemic days in March 2020.

The Markets (as of market close August 2, 2024)

August 5, 2024

Wall Street experienced a notable downturn last week, with each of the benchmark indexes closing sharply in the red. A weaker-than-expected jobs report, rising unemployment claims, disappointing corporate earnings from major tech firms, and falling manufacturing data prompted the major sell-off last week.

The Markets (as of market close July 26, 2024)

July 29, 2024

Stocks were mixed last week, with the Dow and the Russell 2000 adding value, while the Nasdaq, the S&P 500, and the Global Dow ended the week in the red. Tech shares took a hit as investors prepared for this week's earnings data from four megacap giants. For the week, communication services, information technology, and energy closed lower among the market sectors. Health care and utilities posted the largest gains.

Recent Stock Market Volatility, In Context

July 27, 2024

On Wednesday, the S&P 500 dropped by 2.3%. Bloomberg news noted that day’s decline snapped a 356-trading day streak without a drop of over 2%, the longest the market has gone without such a daily dip in more than 17 years.

The Markets (as of market close July 19, 2024)

July 23, 2024

The market saw stocks come in with mixed returns. The Dow and the Russell 2000 advanced, while the Nasdaq, the S&P 500, and the Global Dow lost value. The Dow reached three new records during the week, while the Nasdaq and the S&P 500 posted their worst week since April. AI stocks led a downturn in tech shares as investors moved to small caps...

Don’t Call It a Comeback

July 20, 2024

US small-cap stocks were mostly ignored by investors before the 1980’s, but that all changed after Eugene Fama and Kenneth French published a seminal academic paper showing that the size factor could help explain asset returns. That is, small-cap stocks generated returns above large-cap stocks.

The Markets (as of market close July 12, 2024)

July 17, 2024

Investors were encouraged by the most recent inflation data, raising expectations of an interest rate cut in September. Each of the benchmark indexes listed here closed the week in the black, led by the Russell 2000. The small-cap index recorded its best weekly performance since October 2023, while reaching its highest level since January 2022. The expectation of falling interest rates and economic strengthening ...

The Cuts Are Coming

July 13, 2024

On Thursday, the Bureau of Labor Statistics published its monthly CPI inflation data. UBS economist Paul Donovan summed up the report nicely: harmonized inflation slowed again (to 1.85% year-over-year). Durable goods prices are falling at the most aggressive rate in two decades. Most sectors experienced deflation somewhere in the US.

The Markets (as of market close July 5, 2024)

July 8, 2024

The stock market fared quite nicely during the Fourth of July week. Each of the benchmark indexes listed here posted gains, with the Nasdaq and the S&P 500 reaching record highs a few times during the week. Only the small caps of the Russell 2000 slid lower. The June jobs report (see below) gave investors encouragement that the Fed may be inclined to cut interest rates as early as September...

The Markets (as of market close June 28, 2024)

July 2, 2024

Stocks closed generally higher last week, with the Russell 2000, the Nasdaq, and the Global Dow posting gains, while the large caps of the Dow and the S&P 500 declined. Ten-year Treasury yields rose as bond prices fell. Crude oil prices gained about $1.00 per barrel. The dollar and gold prices inched higher. Investors are most likely reassessing their positions following the presidential debate between Joe Biden and Donald Trump...

The Building Risks of High Interest Rates

June 29, 2024

On Friday, the Bureau of Economic Analysis released its Personal Consumption Expenditures (PCE) index figure for May. The PCE, the Federal Reserve’s preferred gauge of inflation, rose by approximately zero percent for the month. “Core” PCE was up 0.08%, which is also approximately zero percent...

The Markets (as of market close June 21, 2024)

June 24, 2024

Wall Street rode a rally in tech and AI stocks for most of last week. The end of the week saw a bit of a downturn, but not enough to keep the benchmark indexes listed here from closing the week higher. The large caps of the Dow led the indexes, followed by the Russell 2000, the Global Dow, and the S&P 500. The Nasdaq inched higher. Despite a dip at the end of the week, crude oil prices ...

The Persistence of High U.S. Equity Valuations

June 22, 2024

The most popular stock market valuation metric is the price-to-earnings ratio (“P/E”) ratio, also referred to as the “earnings multiple”. The P/E takes the price per share of a stock, or all stocks in the market, and divides that figure by one year’s earnings per share. For example, NVIDIA’s P/E currently stands at 75x earnings. The S&P 500 is trading at 21x next year’s expected earnings. So, NVIDIA is viewed as more expensive relative to the US stock market.

The Markets (as of market close June 14, 2024)

June 17, 2024

U.S. stocks outpaced the rest of the world last week as global investors sought relief from the turmoil caused by European elections. Tech stocks carried the market as investors digested a pair of cooling inflation reports. The Nasdaq closed at record highs every day last week, and ...

The Markets (as of market close June 7, 2024)

June 12, 2024

Despite a dip at the end of the week, stocks closed last week generally higher, with the exception of the economically sensitive small caps of the Russell 2000. A robust jobs report at the end of last week may have alleviated concerns about an economic slowdown, but it also strengthened the Fed's case to refrain from lowering interest rates until inflation recedes. Nevertheless, ...

A Cool Beveridge for U.S. Employment

June 8, 2024

Most economists believe that inflation is driven by wage growth, which is driven by demand for labor and “unnaturally” low unemployment. This is why, as the Federal Reserve ratcheted up interest rates in 2022 to halt inflation, Federal Reserve Chairman Jerome Powell on several occasions reminded our citizenry that inflation would not come down without “pain” for households. In Fed-speak, that means putting people out of work. It was believed that unemployment had fallen too far.

Bad Breadth Usually Precedes Minty Fresh Returns

June 1, 2024

The US stock market’s returns in recent years, 2022 notwithstanding, have been principally driven by the outsized performance of a handful of mega-cap technology names. The so-called “Magnificent Seven” stocks have a few members who have been not-so-magnificent of late, however the point remains that market “breadth” has been poor.

Stocks, Bonds and ETFs Moving to One Day Settlement

May 25, 2024

For many years, the trading of securities such as stocks in the US went like this: on Monday, an investor buys a share of stock, and a dealer agrees to sell them that stock. Two days later, on Wednesday, the investor sends the cash to the dealer, and the dealer delivers the stock.

A Light at the End of the Tunnel for Europe?

May 18, 2024

There have been multiple roadblocks for Europe’s economy in recent years. For various reasons, Europe’s economy has been rather slow to recover from the pandemic, particularly compared to the US. Then, on the heels of the pandemic, Russia invaded Ukraine, and, more recently, a spike in inflation was anticipated due to Red Sea shipping disruptions.

The Haves and the Have-Nots

May 11, 2024

This week, the Federal Reserve published an analysis of the vulnerability of public companies to persistently higher interest rates or a severe economic downturn. The study incorporates the most recent data of companies’ aggregate debt structure and “maturity wall” to gauge whether firms will be able to service their debt.

Indiana Trust Employees Deliver "Diaper Drop" to Christ Child Society!

May 8, 2024

At Indiana Trust Wealth Management, our commitment to community service complements our dedication to excellence in investment management! On May 8, 2024, we participated in the Christ Child Society's annual "Diaper Drop!" event, helping local families in need by delivering hundreds of new diapers in a variety of sizes!

The Markets (as of market close May 3, 2024)

May 7, 2024

The markets enjoyed a solid week of gains on the heels of favorable corporate earnings data and a softer-than-expected employment report. Investors could be viewing the dip in job hires and wage growth as the fuel the Federal Reserve needs to consider interest rate cuts.

Productivity is Underrated

May 4, 2024

The Employment Cost Index (ECI) report, published by the Bureau of Labor Statistics (BLS) on Tuesday, reflected compensation costs to employers at a higher growth rate (1.2%) than what was expected for the first quarter of 2024. As most economists believe wage growth drives inflation, and inflation drives Federal Reserve contemplation of interest rate hikes, the ECI report was interpreted rather negatively by capital markets.

The Markets (as of market close April 26, 2024)

April 30, 2024

Stocks closed last week higher, driven up by tech and communication shares. Each of the benchmark indexes listed here climbed higher, led by the Nasdaq, which rose more than 4.0%. With nearly 50.0% of S&P 500 companies reporting first-quarter earnings, 77.0% reported positive earnings per share and 60.0% reported positive revenue according to the latest information from FactSet). Each of the market sectors closed last week ahead, with consumer staples and information technology leading the w

High Nominal Growth Environment is Okay for Stocks

April 27, 2024

The most surprising development in capital markets in 2024 (so far) is that equities have held up despite the evaporation of expectations for the Federal Reserve to lower its target interest rate this year. Back in January, markets expected six or more rate cuts from the Fed. Now, markets anticipate one cut, maybe, by year end..

Our Elkhart Office Has Relocated!

April 24, 2024

Our Elkhart office has relocated to the new "Eastbank Building" in the business development district of downtown, where other suites are still under construction. Please make note of our new ...

Higher Bond Yields, Higher Forward Returns

April 20, 2024

The US investment grade bond market’s average annual return over the last five years through the end of March is distinctly unimpressive. The Bloomberg US Aggregate index, a proxy for the investment grade bond market, returned about 0.5% to investors over that time.

Cheron Merten Named To 2024 Michiana Forty Under 40 Class

April 15, 2024

Indiana Trust Wealth Management is proud to announce that Cheron L. Merten, CTFA™, CFIRS™, has been named to the 2024 Michiana Forty Under 40 class, recognizing her as one of the area's most influential up-and-coming professionals under 40 years old. This prestigious accolade highlights exceptional individuals who not only excel in their professional fields but also strive to make significant contributions to the Michiana community.

Corporate Investment Driving Profits – and Inflation?

April 13, 2024

On Wednesday, the Bureau of Labor Statistics published its March CPI inflation report. Economists and the market expected month-over-month core inflation of 0.3%. The figure came in at 0.4%. So far in 2024, core inflation has stopped falling.

The Markets (as of market close April 5, 2024)

April 9, 2024

Despite a late-week surge, stocks closed lower last week. Investors saw the continued strength of the labor market (see below) as increasing the chances of a soft landing for the economy, while potentially delaying the Federal Reserve from cutting interest rates. Each of the benchmark indexes listed here lost value, with the Russell 2000 and the Dow falling more than 2.0%. Ten-year Treasury yields rose as bond prices slid.

The Markets (as of market close March 29, 2024)

April 2, 2024

Stocks finished the month of March in solid fashion. Each of the benchmark indexes listed here posted gains, with the exception of the Nasdaq. Bond yields dipped lower. Crude oil prices advanced, while energy shares ended up being a top performer. The dollar inched higher, while gold prices continued to climb.Investors seemed to take a breath to begin last week, as stocks ticked lower by the close of trading last Monday.

Stocks Shrug Off Dwindling Expectations for Rate Cuts

March 23, 2024

In 2022, when the Federal Reserve raised interest rates at the fastest pace in its history, virtually all financial asset prices suffered, including stocks. Beyond the day-to-day noise, a company’s stock price can be thought of as the present value of the firm’s future cash flows (i.e., profits) per share. As interest rates rise, the present value of those future cash flows falls. This relationship has led many investors to claim that the Fed “controls” the stock market, to an extent.

The Markets (as of market close March 15, 2024)

March 18, 2024

Equities closed lower for the second straight week last week, with the Russell 2000 losing nearly 2.0%. A sell-off in tech shares pulled the Nasdaq down 0.7%, marking the first back-to-back weekly losses since last October. Higher-than-expected inflation data may have raised investor concerns that the Federal Reserve may keep interest rates elevated for longer than hoped for.

Bubble Talk

March 16, 2024

Ray Dalio, famed founder of the storied hedge fund Bridgewater, recently argued why US stocks are not in a “bubble”, contrary to recent rumblings from other prominent investors. He constructed a “USA Equity Market Bubble Gauge” based upon traditional measures of value, broad market sentiment, the use of debt to finance stock purchases, and a few more metrics.

The Markets (as of market close March 8, 2024)

March 12, 2024

Wall Street fell from record highs to close generally lower last week. A better-than-expected jobs report (see below) helped support the notion that the economy remains strong and that the Federal Reserve will likely cut interest rates, possibly after their June meeting.

Evolving Country Representation in Emerging Markets

March 9, 2024

Emerging Markets as an equity asset class began attracting investor attention in the 1980’s, but what does that moniker represent today? MSCI, the industry-standard index provider, builds its universe of Emerging Market countries by considering a country’s economic development, the size and liquidity of securities traded, and market accessibility to foreign capital.

For the Fed, is Patience a Virtue?

March 2, 2024

With inflation slowing and signs of labor market cooling, the consensus heading into 2024 was that the Federal Reserve would begin lowering its overnight target interest rate range from its currently held position of 5.25% to 5.5% as early as March.

The Markets (as of market close February 23, 2024)

February 27, 2024

Stocks advanced last week, driven higher by tech shares that were bolstered by favorable corporate earnings reports. The Dow, the Nasdaq, and the S&P 500 posted weekly gains for the 16th time out of the last 18 trading weeks. Among the benchmark indexes listed here, only the small caps of the Russell 2000 closed the week in the red. Each of the 11 market sectors ended the week higher, led by consumer staples, materials, and health care.

The Markets (as of market close February 16, 2024)

February 21, 2024

Rising inflation heightened investor concerns last week that the Federal Reserve may not consider lowering interest rates during the first half of the year. Among the benchmark indexes listed here, only the small caps of the Russell 2000 and the Global Dow were able to gain ground. The Dow snapped a five-week winning streak, while the Nasdaq and the S&P 500 also finished the week lower.

All In for AI

February 17, 2024

Super Micro Computer, Inc. (SMCI), a relatively small company headquartered in San Jose, California with $7 billion in annual revenue, has been publicly traded since 2007. SMCI makes high-performance and high-efficiency servers. The stock has done well over the years and is listed in the Russell 2000 index of small cap stocks.

The Markets (as of market close February 9, 2024)

February 13, 2024

Stocks closed higher last week, with the S&P 500 and the Nasdaq reaching record highs. Investors were encouraged by generally favorable fourth-quarter corporate earnings data and a downwardly revised Consumer Price Index for December. Each of the benchmark indexes listed here gained ground, led by the Russell 2000 and the Nasdaq.

What’s Driving Stock Market Returns?

February 10, 2024

The stock market has notched all-time highs on multiple occasions in 2024, surpassing its previous high-water mark on January 3, 2024. Stock market valuations are bumping higher, as well.

The Markets (as of market close February 2, 2024)

February 6, 2024

A strong labor report and solid earnings data from megatech companies helped drive stocks higher last week. Each of the benchmark indexes listed here posted solid gains with the exception of the Russell 2000. Nine of the 11 market sectors advanced last week, led by consumer discretionary, consumer staples, and health care, while real estate and energy declined.

Pondering Risks to the Stock Market

February 3, 2024

As the US stock market has notched multiple all-time highs over the last two weeks, it may be worthwhile to take a step back and consider what the near-term risks could be for equities.

The Markets (as of market close January 26, 2024)

January 31, 2024

Stocks closed higher last week, with the S&P 500 and the Nasdaq reaching record highs. Investors spent most of the week parsing through corporate earnings results and important economic data. Among the market sectors, communication services and energy rose over 5.0%, while health care ended the week in the red. Ten-year Treasury yields ticked up marginally.

Stocks and Bonds, Positively Correlated

January 27, 2024

Fidelity Investments recently noted that three-year rolling correlations between stocks and intermediate U.S. Treasury bonds have moved into positive territory for the first time in over twenty years. At present, when bond prices go up (and yields fall), stock prices tend to go up, and when bond prices fall (and yields rise), stocks tend to fall.

The Markets (as of market close January 12, 2024)

January 23, 2024

Wall Street saw stocks close higher last week, despite dampening hopes of an interest rate reduction. Each of the benchmark indexes listed here rebounded from a slow start to the year by adding value last week. Some major financial companies posted lower-than-expected fourth-quarter earnings. Information technology and communication services led the sectors, while energy and utilities underperformed. Ten-year Treasury yields slipped lower. Crude oil prices retreated marginally.

The Markets (as of market close January 19, 2024)

January 23, 2024

Wall Street closed the holiday-shortened week generally higher, with each of the benchmark indexes listed here posting gains, except for the Russell 2000 and the Global Dow. The surge in stocks was driven primarily by information technology and communication services, with chip makers leading the charge. Other than financials, which ticked up marginally higher, the remaining market sectors ended the week in the red.

Are the “Magnificent Seven” Stocks Excessively Magnificent?

January 23, 2024

The “Magnificent Seven” stocks – Apple, Microsoft, Alphabet, Amazon, NVIDIA, Tesla, and Meta – were up over 100% on average in 2023 and were collectively responsible for more than two-thirds of the S&P 500’s 26% return. The Magnificent Seven now make up almost 30% of the index’s market capitalization, an unusually high concentration of market value in such a small number of names.

The Perks of Low Expectations

January 13, 2024

The most important driver of returns on stocks is earnings growth. The present value of expected future earnings – whether “future earnings” are estimated using EPS, free cash flows generated, economic profits, or any alternative metric – is what gets baked into stock prices.

The Markets (as of market close January 5, 2024)

January 8, 2024

After pulling off a surprisingly strong rally in the fourth quarter of 2023, the stock market took a tumble during the first week of the new year. All five of the indexes listed here ended lower, with the Russell 2000 and the Nasdaq seeing the largest losses. Information Technology and Consumer Discretionary were the two worst-performing sectors, while health care, utilities, and energy posted decent gains.

Peeking Back at 2023, Sizing Up 2024

January 6, 2024

Market analyst Sam Ro recently highlighted a prescient take from Brian Belski, strategist at BMO Capital Markets, made in January 2023. A year ago, Mr. Belski noted that in the past 90 years, the S&P 500 only had four calendar years with worse returns than 2022’s 19.4% loss (1937, 1974, 2002, and 2008). The year following those four years, the index logged 20%+ gains with an average return of 26.5%.

The Markets (as of market close December 8, 2023)

December 12, 2023

The first week of December saw stocks close higher. Megacaps fueled much of the increase. A better-than-expected jobs report (see below) encouraged investor sentiment about a soft landing for the economy, while cooling expectations of an early cut in interest rates by the Federal Reserve. Each of the benchmark indexes listed here ended last week higher, with the exception of the Global Dow.

US Equities Versus Everything

December 9, 2023

The US stock market, gauged by the S&P 500 index, last reached its all-time-high in 2021. The following calendar year 2022 was one of the worst years on record for balanced portfolios of stocks and bonds, as the Federal Reserve cranked its overnight target interest rate up to douse inflation.

December Nonprofit Spotlight: United Religious Community of St. Joseph County

December 5, 2023

At a time defined by religious division worldwide, it could be easy to overlook the remarkable organizations that are striving to transcend boundaries and bring people of different faiths together. The United Religious Community (URC) stands as a testament to the enduring power of unity and cooperation among diverse religious traditions, as they quietly but profoundly impact lives, while striving to create a more harmonious and inclusive community.

Slowing Economy, Rising Markets?

December 2, 2023

Last month was the third-best November for the US stock market since 1960, as the S&P 500 climbed over 8%. Bonds rallied as well, yields fell, and the Bloomberg US Aggregate Bond index rose almost 5% in price. November was one of the all-time best months for balanced (60/40) portfolios.

The Markets (as of market close November 24, 2023)

November 28, 2023

Market activity was subdued during Thanksgiving week, which saw stocks close higher. Each of the benchmark indexes listed here gained ground, led by the large caps of the Dow and the S&P 500. Each of the 11 market sectors ended the week higher, with health care, energy, and communication services leading the way. ...

The Markets (as of market close November 17, 2023)

November 21, 2023

The market enjoyed a favorable week as each of the benchmark indexes listed here gained ground. Inflation data showed consumer prices moderated in October, while the Federal government avoided a shutdown.

The Fed is Stealth Tightening

November 18, 2023

The Federal Reserve’s current interest rate policy is restricting borrowing and spending, or “demand”, thus curtailing overall economic activity, which will ultimately lead to layoffs at firms, which will raise the unemployment rate and reduce wage growth, all of which will snuff out inflation.

The Markets (as of market close November 10, 2023)

November 13, 2023

Stocks closed generally higher last week on continued hopes that the Federal Reserve is done raising interest rates despite more hawkish comments from Fed Chair Jerome Powell. Tech and growth stocks carried the market for much of the week as investors looked ahead to this week's inflation reports. Ten-year Treasury yields eased somewhat from recent 16-year highs.

The Markets (as of market close November 3, 2023)

November 6, 2023

Wall Street ended a two-week bear run as stocks enjoyed their best week of the year last week. Each of the benchmark indexes listed here posted solid gains, while bond yields declined, dragged lower by escalating bond prices.

Nonprofit Spotlight Award for November 2023: St. Margaret's House!

November 6, 2023

Amid the bustling city streets and high-rise buildings of downtown South Bend lies a critical support day center for marginalized women and children, many of whom are literally subsisting on society's edge. This sanctuary is St. Margaret's House: a place where community is cultivated, lives are changed, and the very essence of compassion in action is at work inside its walls.

Cooling Macro Heats Up Markets

November 6, 2023

Since July, capital markets have been giving the Federal Reserve a wary side-eye. Inflation, while falling, is not yet at the Fed’s preferred target, and employment has been tight. A few weeks ago, futures markets held decent odds for further rate hikes in December and into early 2024.

CORPORATE EARNINGS: NOT SPOOKY AT ALL

November 4, 2023

Mega-cap tech stocks, which have been the clear stock market champions for the last several years, were punched around by investors this week. Alphabet (or as most know it, Google) had a rough market response to its earnings release on Tuesday evening: the stock was down almost 10% the following day, dropping more than $166 billion in market value.

The Markets (as of market close October 27, 2023)

November 4, 2023

Last week saw Wall Street endure another lackluster performance. Investors continued to fret over hawkish comments from Federal Reserve officials as inflation remained above the Fed's target rate of 2.0%. In addition, higher bond yields and unrest in the Middle East also weighed on the market.

THE MARKETS (AS OF MARKET CLOSE OCTOBER 20, 2023)

October 27, 2023

Last week proved to be a rough one for the market as investors fled from equities following Federal Reserve Chair Jerome Powell's indication that interest rates would remain higher for longer. The escalation of the Israel-Hamas war also weighed on Wall Street and global markets. Each of the benchmark indexes listed here declined by at least 1.6%, with the Nasdaq skidding over 3.0%.

THE INDIANA TRUST NONPROFIT SPOTLIGHT AWARD RECIPIENTS FOR OCTOBER 2023!

October 27, 2023

This month, the Indiana Trust Nonprofit Spotlight award goes to two organizations that are making a difference in the communities we serve – Child and Parent Services in Elkhart, Indiana, and A Better Way in Muncie, Indiana!

TINA PATTON GRADUATES FROM MUTZ PHILANTHROPIC LEADERSHIP INSTITUTE

October 27, 2023

On Tuesday evening, October 10th, the John Mutz Philanthropic Leadership Institute recognized South Bend native, Tina M. Patton, CSOP™, CISM®, Vice President and Director of Nonprofit & Foundation Engagement at Indiana Trust Wealth Management, as a distinguished member of its 2023 graduating class. The Institute, which identifies and develops transformational philanthropic leaders across...

ALL US LARGE CAP EQUITIES DO IS WIN, WIN, WIN

October 27, 2023

US large cap stocks are once again leading the way across equity asset classes in 2023. US large caps are dominated by the “Magnificent Seven” names representing the largest stocks by market capitalization (Apple, Microsoft, Alphabet, Amazon, NVIDIA, Tesla, and Meta). Those seven names accounted for 11.1% of the S&P 500’s 13.1% total return for the year through September.

HIGHER INTEREST RATES AND EXPECTED RETURNS ON STOCKS

October 27, 2023

When interest rates rise, bond prices fall. This is how the time value of money works. Higher rates increase the cost of waiting for future interest and principal payments, so they are worth less today. Future cash flows from bonds are certain, and for those from the US Treasury, they are risk-free. Changes in interest rates mechanically change bond prices.

THE INDIANA TRUST NONPROFIT SPOTLIGHT AWARD RECIPIENT FOR SEPTEMBER 2023!

October 27, 2023

The Mishawaka Education Foundation (MEF) supports local K-12 education at School City of Mishawaka (SCM), leaving a positive impact on students, educators, and the community at large. With a focused approach on enhancing learning opportunities and promoting inclusivity, the MEF serves as a noteworthy example of how grassroots educational initiatives can drive meaningful change.

HIGHER FOR LONGER?

October 27, 2023

The Federal Reserve’s Open Market Committee (FOMC), the part of the Fed that makes interest rate decisions, met on Wednesday and decided to hit the “pause” button, keeping its target interest rate range where it currently stands (5.25% to 5.5%). This was widely expected: the CME Group’s FedWatch tool, which analyzes 30-day Fed Funds futures pricing, had an implied probability of 99% that the...

HONORING EXCELLENCE: IUSB CHANCELLOR'S MEDAL AWARDED TO DAVID R. KIBBE, JD

October 27, 2023

In a night filled with anticipation and celebration, the Indiana University South Bend community gathered on September 19th for the second annual "Night of the Titans" gala. The annual fundraiser dinner, which is known for recognizing exceptional individuals and their contributions to both the university and the community, took on a special significance this year as Susan Elrod, PhD, Chancellor of Indiana University South Bend, presented the prestigious Chancellor's Medal to David R. Kibbe, JD.

DRIVER’S EDUCATION

October 27, 2023

As the father of a teenager who is learning how to drive, I have spent some time the past few months in the passenger seat attempting to teach my daughter the ins-and-outs of driving a car. One of the early lessons in this journey was pointing out the significance of using the right foot to both accelerate and brake.

STOCK PICKING IS HARD

October 27, 2023

Picking stocks that beat the market over time can lead to fantastic returns. Unfortunately, picking those winners is exceptionally difficult as they are few and far between.

FOR LABOR, A SHIFT TO CAPITAL FORMATION

October 27, 2023

Investment is critical for economic growth and for productivity. In the economic sense of the term, it represents the creation of wealth. Building a factory or a house represents physical investment, but it can take intangible forms, such as intellectual property.

FISHING FOR ANSWERS IN JACKSON HOLE

October 27, 2023

The Federal Reserve of Kansas City hosted its annual economic symposium this week in Jackson Hole, Wyoming. Why not hold the meeting in Wichita or Lawrence? The rumor is that legendary Fed Chairman Paul Volcker loved fly fishing in Wyoming, so by hosting the event there it assured his attendance in 1982. The meeting has become the buzziest gathering of economists and journalists on the calendar, with the central focus on the speech from the Fed chair, currently Jerome Powell, who spoke on Friday

NONPROFIT SPOTLIGHT AWARD FOR AUGUST 2023: FISCHOFF NATIONAL CHAMBER MUSIC ASSN!

October 27, 2023

The Fischoff National Chamber Music Association has been quietly transforming the landscape of classical music from its headquarters in South Bend, Indiana, for more than five decades – nurturing musical brilliance and fostering artistic bonds among young chamber musicians, the literal virtuosos of tomorrow.

BEWARE OF SHIFTING STOCK MARKET NARRATIVES

October 27, 2023

Growth-style stocks are those with high valuations attached, many of which do not pay dividends, but which are expected to grow earnings or free cash flow rapidly in the future. NVIDIA is a good example of a growth stock. Other growth stocks do not even generate positive free cash flow today. They are expected to grow quickly at some point in the distant future, years from now.

THE INVERTED YIELD CURVE: A BENIGN INTERPRETATION

October 27, 2023

Indiana Trust Wealth Management Investment Advisory Services by Clayton T. Bill, CFA Vice President, Director of Investment Advisory Services The US equity market, represented by the S&P 500 index, slipped 0.3% for the week ending August 11.The US Treasury market’s inverted yield curve is typically interpreted as a negative leading indicator for the economy. This week, a prominent Federal Reserve official made the case for a more benign interpretation of the situation. The Federal Re

THE FITCH DOWNGRADE IS BARELY WORTH MENTIONING

October 27, 2023

On Tuesday evening this week, Fitch Ratings, one of the three major credit ratings agencies, downgraded the US debt from AAA (its highest rating) to AA+, one notch lower.

LA CASA DI AMISTAD: THE INDIANA TRUST NONPROFIT SPOTLIGHT PARTNER FOR JULY 2023!

August 29, 2023

In the heart of South Bend, La Casa de Amistad shines as a beacon of hope and support for the Latino/Hispanic community – a pillar of empowerment and service since its establishment nearly 50 years ago, in October of 1973. Guided by a profound commitment to fostering growth and inclusivity, La Casa de Amistad offers an array of vital programs and services tailored to meet the diverse needs of these immigrants in their pursuit of a better life in the United States.

Is The Fed Giving the Economy the Green Light?

August 29, 2023

he Federal Reserve raised its overnight target interest rate on Wednesday by 0.25%, to a range of 5.25% to 5.5%. In prepared comments at his press conference, Fed Chair Jerome Powell stated that “for inflation to reach 2% the economy will likely require a period of below-trend growth and some softening of labor market conditions.”

THE MARKETS (AS OF MARKET CLOSE JULY 21, 2023)

August 29, 2023

Last week saw stocks close generally higher, with only the tech-heavy Nasdaq slipping lower. The Dow extended its winning streak to 10 straight sessions, its longest run since August 2017. Investors, probably anticipating another 25.0 basis-point hike from the Federal Reserve this week, moved from information technology, communication services, and consumer discretionary shares to more defensive sectors such as health care, utilities, and consumer staples. Long-term bond prices remained relative

THE CONTINUING CASE FOR FOREIGN EQUITIES

August 29, 2023

International equity diversification has not worked for US investors for 30 years. US asset managers are beginning to abandon foreign stock allocations, or, at least, reduce those allocations to insignificant “window dressing” levels. That way, portfolio managers can claim they still adhere to the key principle of diversification, one of the most fundamental ideas in modern finance.

THE MARKETS (AS OF MARKET CLOSE JULY 14, 2023)

August 29, 2023

Wall Street enjoyed a positive week of returns, with each of the benchmark indexes posting solid gains, despite a marginal downturn at the end of last week. The financial sector began releasing quarterly updates last Friday as investors focused on the state of the banking industry. A few major banks reported increasing profits in the second quarter, while more data will be released this week.

ECONOMIC & MARKET TAILWINDS: TAYLOR'S VERSION

August 29, 2023

The Bureau of Labor Services released its monthly CPI report on Wednesday morning. Headline CPI rose by 0.2% in June. That result was cooler than expected. Year-over-year inflation in June 2022 was 9%. Through June of this year, it has fallen to 3%.

THE MARKETS (AS OF MARKET CLOSE JULY 7, 2023)

July 10, 2023

Stocks fell for the second straight week last week, with each of the benchmark indexes losing ground. The Dow led the declines, followed by the Global Dow, the Russell 2000, the S&P 500, and the Nasdaq. Although the employment report for June (see below) showed a moderate decline in the number of new jobs added, wages continued to track higher, which could support further interest rate hikes by the Federal Reserve. The Fed meets next on July 26, and the latest employment data makes anot

ACTIONABLE SECURITY MEASURES FOR SAFEGUARDING ONLINE ACTIVITY

July 10, 2023

In today's hyper-connected digital landscape, cybersecurity has become an integral part of our daily lives. As individuals and organizations rely more on online platforms and services, the risk of cyber threats and attacks continues to grow. Clients of Indiana Trust Wealth Management should be equipped with the knowledge and tools to help ensure their online activities remain secure.

NONPROFIT SPOTLIGHT FOR JUNE 2023: INDIANA UNIVERSITY SOUTH BEND!

July 10, 2023

Nestled on the banks of the picturesque St. Joseph River, Indiana University South Bend stands as a beacon of academic excellence and community engagement. With its rich history, vibrant campus life, and commitment to student success, IUSB has become a top choice for those seeking a transformative higher education experience.

MANUFACTURING CONSTRUCTION SPENDING IS BOOMING

July 10, 2023

The COVID pandemic put a spotlight upon the consequences of the long-term deindustrialization of the US economy. Critical industries, most notably microchips, were shown to have complex, brittle supply chains which impacted the availability of a wide array of goods, most notably cars.

THE MARKETS (AS OF MARKET CLOSE JUNE 2, 2023)

July 10, 2023

Stocks began on a downturn, but rallied later to end last week higher. Each of the benchmark indexes listed here posted solid weekly gains, led by the Russell 2000, followed by the Nasdaq, the Dow, the S&P 500, and the Global Dow. Investors began the week concerned that the debt ceiling agreement between President Biden and House Speaker McCarthy would not pass the House and Senate.

THE SLOW SLOWING OF THE US ECONOMY

July 10, 2023

The consensus across economists for the closely watched monthly employer survey was the addition of 195,000 jobs for the US economy in May. The report, released on Friday, reflected 330,000 jobs added, beating expectations for the fourteenth straight month.

THE MARKETS (AS OF MARKET CLOSE MAY 19, 2023)

July 10, 2023

Most of last week, investors seemed to react to negotiations concerning the debt ceiling. Despite a lackluster ending to the week, stocks closed generally higher. Tech shares climbed nearly 4.0%, while consumer discretionary stocks also posted gains.

THE 60/40 WILL LIVE AGAIN

July 10, 2023

In the aftermath of the Great Financial Crisis of 2008, virtually every investor began to reassess their stock market exposure. A portfolio of global stocks was off over 50% from peak-to-trough during the crisis, and a balanced portfolio of 60% stocks and 40% bonds was down over 30%.

THE MARKETS (AS OF MARKET CLOSE MAY 12, 2023)

July 10, 2023

Stocks trended lower last week, with only the Nasdaq able to eke out a gain. Investors remained pensive as they await negotiations on the debt ceiling. With roughly 92% of the S&P 500 companies having reported first-quarter earnings thus far, results appear headed down 2.5% from last year. This follows a 4.6% drop in fourth-quarter earnings.

DEBT CEILING HISTRIONICS

July 10, 2023

Markets shuddered as Congress warned that it would not approve the increase to the federal debt ceiling. The Treasury Secretary took to the media with tales of gloom should the federal government default and offered a direct, personal plea to senators and representatives to raise the debt ceiling.

NONPROFIT SPOTLIGHT FOR MAY 2023: HABITAT FOR HUMANITY OF ST. JOSEPH COUNTY!

July 10, 2023

Habitat for Humanity is a global non-profit organization that aims to help low-income families and communities around the world build and improve their homes. Founded in 1976 in Americus, Georgia, by Millard and Linda Fuller, Habitat for Humanity has become one of the most recognizable and respected charities in the world.

THE MARKETS (AS OF MARKET CLOSE MAY 5, 2023)

July 10, 2023

Stocks closed last week generally lower, with only the Nasdaq eking out a minimal gain. A rally last Friday wasn't enough to recoup losses experienced during the week. Investors had quite a bit to digest over the past week. The Federal Reserve hiked the federal funds rate 25 basis points and gave no clear indication as to whether and when more rate increases may be coming.

THE FED’S LAGGED RESPONSE TO LAGGING DATA

July 10, 2023

As expected, the Federal Reserve hiked its overnight target interest rate another 0.25% this week to a range of 5% to 5.25%. Mr. Powell stated the FOMC, the committee at the Fed responsible for interest rate decisions, would now take a data-dependent approach in its policymaking for the rest of 2023.

THE MARKETS (AS OF MARKET CLOSE APRIL 28, 2023)

July 10, 2023

Stocks ended last week higher as strong corporate earnings data helped offset worries of another round of interest rate hikes, following the Federal Reserve's meeting this week. Each of the benchmark indexes listed here posted weekly gains, with the exception of the Russell 2000.

CORPORATE EARNINGS: BAD NEWS FOR THE BEARS

July 10, 2023

With all the focus in the financial press upon the Federal Reserve, inflation, and turmoil in the banking system, it would be easy to forget that what ultimately counts for stock market investors is corporate earnings growth. Profits are what matter.

THE MARKETS (AS OF MARKET CLOSE APRIL 21, 2023)

July 10, 2023

Stocks were relatively listless last week, with only the Russell 2000 posting a gain of 0.6%. The Nasdaq, the Dow, and the Global Dow fell between 0.2% and 0.4%, while the S&P 500 was nearly flat. Energy stocks were among the worst performing, with crude oil prices posting their poorest week in about a month. Gold prices slipped below $2,000.00 per ounce. The dollar edged higher, while 10-year Treasury yields climbed minimally. The start of corporate earnings season has been mixed at best, p

ANNOUNCING THE INDIANA TRUST NONPROFIT SPOTLIGHT PARTNERS FOR MARCH 2023

May 24, 2023

When we partner together to support our local Boys & Girls Clubs, we are truly “investing in great futures!” Please join us in congratulating the Boys & Girls Clubs of St. Joseph County, as well as the Boys & Girls Clubs of Elkhart County, as the Indiana Trust Nonprofit Spotlight award recipients for March 2023!

CONVEXITY CAN BE A PERPLEXITY

May 24, 2023

In 2022, the Federal Reserve raised its overnight target interest rate at a faster pace than any other time over the last forty years, and that action raised interest rates across the yield curve. When yields rise, bond prices fall. That decline in price is part of the total return calculation for bonds, along with interest income.

WILL RISING WAGES DENT CORPORATE PROFITS?

May 24, 2023

This week, Home Depot reported its fourth quarter earnings and provided guidance for 2023. In their outlook for the coming year, Chief Executive Ted Decker noted that the company will invest $1 billion toward raising wages for its hourly employees, a move which is projected to negatively impact the firm’s profit margin. The stock swooned on the news.

A BUMPY ROAD AHEAD FOR INFLATION

May 24, 2023

All that seemingly matters to capital markets is inflation and the Federal Reserve’s response to it. January’s Consumer Price Index (CPI) inflation data will be released next week by the Bureau of Labor Statistics (BLS). It will be parsed ad nauseum by investors, economists, and the press.

EUROPE CATCHING INVESTORS OFFSIDES

May 24, 2023

2022 held many surprises for investors. It was the only year since 1970 when U.S. stock and bond market returns were both negative. The Federal Reserve also kicked off its fastest monetary policy tightening cycle in the last forty years.

SURVEY SAYS…

May 24, 2023

Investors and traders are constantly trying to discern which direction the economy is heading. There are a multitude of surveys and models that are blasted throughout the media, from the University of Michigan’s consumer sentiment survey to the New York Fed’s Empire State Manufacturing Survey.

ANNOUNCING THE INDIANA TRUST NONPROFIT SPOTLIGHT PARTNER FOR APRIL 2023

May 24, 2023

Indiana Trust Wealth Management wishes to congratulate Bob Ball, Founding Executive Director, as well as his staff and volunteers for leading the charge at Inside Out by partnering with agencies and organizations throughout the area to feed the area's hungry children and transform our community – from the inside out!

NONPROFIT SPOTLIGHT PARTNER JANUARY 2023: Scholarship Fdn of St. Joseph Co!

May 24, 2023

For area students who excel academically but have a demonstrated financial need, dreams of higher education may appear to be out of reach. But for those who meet the eligibility criteria, The Scholarship Foundation of St. Joseph County is here to help make those dreams a reality.

VALUE’S REVENGE

May 24, 2023

Heading into 2022, US stocks categorized as large-cap growth had outperformed value-style stocks for over five years. Growth stocks were king of the US stock market for years.

TINA PATTON OF INDIANA TRUST WEALTH MANAGEMENT NAMED TO MUTZ PHILANTHROPIC

May 24, 2023

Indianapolis, Indiana — Tina M. Patton, CSOP™, CISM®, Vice President and Director of Nonprofit & Foundation Engagement at Indiana Trust Wealth Management, has been selected as a member of the 2023 class of the Mutz Philanthropic Leadership Institute. Launched by Indiana Philanthropy Alliance in 2021, the Mutz Institute provides a leadership training experience to skill-up professionals... (read more)

WHAT IF THERE IS NO LANDING?

May 24, 2023

The wide consensus amongst economists and investors is that the US will enter economic recession in 2023. Fidelity Investments, for example, puts the odds on a recession at 75%. Above all other contributing factors to this line of thinking is that the Federal Reserve has been in interest rate hiking mode to put the brakes on economic growth, slow employment gains, and squash inflation. ... (read more)

NONPROFIT SPOTLIGHT PARTNER FOR FEBRUARY 2023: American Cancer Society!

May 24, 2023

Who among us has not been affected in some way by cancer – if not by a personal diagnosis, then by the diagnosis of a family member, friend, or colleague? This year, in the United States alone, there will be an estimated 1,958,310 new cancer cases. And according to official statistics, each of us has an approximate 40% birth-to-death chance of developing an invasive cancer during our... (read more)

A HARD LANDING IN 2023?

May 24, 2023

At the start of 2022, the Federal Reserve embarked on one of its fastest interest rate hiking cycles in history to slow spending in the economy (“demand”) to quell inflation.

NONPROFIT SPOTLIGHT PARTNER FOR DECEMBER 2022: HUMANE SOCIETY OF ELKHART COUNTY!

May 24, 2023

For those of us fortunate enough to have known the life-affirming, unconditional love of an animal, the mention of an abandoned pet is certain to tug on our heart strings. The reality is that there are literally thousands of abandoned and unwanted animals in our very own communities each year, many who have been neglected or abused – animals who desperately need a loving, forever home. ... (read more)

EUROPEAN STOCK MARKET INSOUCIANCE

May 24, 2023

Russia’s invasion of the Ukraine created major disruptions to the global economy, but nowhere was the impact felt more than Western Europe. Crude oil and natural gas prices surged, leading to soaring inflation in energy and food. European equity markets sold off and the euro and pound sterling weakened.

HOUSEHOLD SAVINGS DON’T DRAIN LIKE A BATHTUB

May 24, 2023

When the pandemic hit in 2020, the personal savings rate skyrocketed. Incomes fell, but spending fell much more. Under the circumstances, households could not spend even if they wanted to do so. The federal government also stepped in with the CARES Act, and subsequent fiscal measures, to directly bolster household income.

THE BRIGHT SIDE OF INFLATION

May 24, 2023

Inflation has been the only macroeconomic and capital market story that has mattered in 2022. Over the last few months, a constellation of various data points appears to show it is on the wane, or at least stabilizing. The Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) index, rose by a less-than-expected 0.2% in October.

A FEW BANKS WENT THROUGH THE WINDSHIELD – AND A NOTE FROM OUR CEO

May 24, 2023

There is a saying that traces back to 1941: whenever the US government or the Federal Reserve jams on the brakes, someone will go through the windshield. You just never know who it’s going to be.

INDIANA TRUST ANNOUNCES RMHC MICHIANA "PILLARS OF PURPOSE" SPONSORSHIP

May 24, 2023

Indiana Trust Wealth Management is helping Ronald McDonald House Charities of Michiana “keep families close” as a proud sponsor of their Pillars of Purpose program for 2023! RMHC of Michiana provides comfort care and support to families of critically ill or injured children at Beacon Hospitals in St. Joseph and Elkhart Counties.

THE REVERSAL OF THE REVERSAL

May 24, 2023

The Federal Open Market Committee (FOMC), the part of the Fed that makes interest rate decisions, hiked its target interest rate 0.25% this week in the face of turmoil in the US banking system. Although its tone was softer, the FOMC continued its mantra that further rate hikes this year may be warranted to deal with inflation.

THE MARKET TENDS TO RECOVER BEFORE THE ECONOMY

May 24, 2023

In 2022, the Fed went on the fastest interest rate hiking cycle in the last forty years to squelch inflation, yet inflation stubbornly persists above the Fed’s 2% target.

THAT PEACEFUL EASY EARLY CYCLE FEELIN’

May 24, 2023

There are almost always data points in the ocean of business surveys, yield curves, and stock charts to support one narrative or another. Well-known economic and market pundits continue to focus upon negative late business cycle indicators flashing recession warnings. If a recession occurs in 2023, which is the overwhelming consensus, it would be the most predicted recession in history.

GOLDILOCKS START TO THE NEW YEAR

May 24, 2023

Happy new year to our clients, community partners, and professional colleagues! We begin the new year with a review of capital markets in 2022: virtually nothing worked.

BOND MARKET SANGUINE ON INFLATION

May 24, 2023

The Federal Reserve, and by extension most financial markets, have become fixated upon the Bureau of Labor Statistics’ monthly CPI inflation prints. While that data is backward-looking by nature, headline and core inflation numbers in June were miserably hot.

WHY THE BOND MARKET IS OPTIMISTIC ABOUT INFLATION, IN CHARTS

May 24, 2023

The U.S. bond market appears to be optimistic that inflation is not going to be much of a problem in the coming years. What is the evidence to support the bond market’s current consensus?

THE MARKETS (AS OF MARKET CLOSE JULY 22, 2022)

May 24, 2023

Stocks ended last week in the black, with the market posting its best week in a month. Despite a late-week decline, each of the benchmark indexes listed here posted solid weekly gains, led by the Russell 2000 and the Nasdaq. Bond prices rose, pulling yields lower. Crude oil prices ended a volatile week down by about $3.00 per barrel. The dollar edged lower, while gold prices advanced.

NO EARNINGS RECESSION YET

May 24, 2023

This week was massive for macroeconomic news. The Federal Reserve raised its target interest rate, Congress passed a spending bill, and the Bureau of Economic Analysis (BEA) ignited a raging debate on the definition of “recession”. Some claim that the second quarter’s negative GDP print from the BEA was proof that the U.S. economy is in a recession. It was the second consecutive negative GDP...

THE MARKETS (AS OF MARKET CLOSE JULY 29, 2022)

May 24, 2023

Positive economic news and corporate earnings data helped drive stocks higher last week. Although the Federal Reserve hiked interest rates another 75 basis points, investors may expect subsequent rate increases to be no more than 75 basis points, with the possibility of a slowdown in rate hikes in the not-too-distant future. Each of the benchmark indexes listed here gained at least 2.9%, with...

NONPROFIT SPOTLIGHT PARTNER AUGUST 2022: JUNIOR ACHIEVEMENT OF NORTHERN INDIANA!

May 24, 2023

Congratulations to Junior Achievement of Northern Indiana, the Indiana Trust Nonprofit Spotlight award recipient for August 2022, for preparing young people to succeed in a global economy! Junior Achievement helps students in grades K-12 realize that the educational path they are on today is directly tied to their future success – whether that path includes trade school, college, or an...

THE MARKETS (AS OF MARKET CLOSE AUGUST 5, 2022)

May 24, 2023

Stocks closed last week generally higher. A surprisingly strong labor report for July helped alleviate recession fears, but opened the door to more interest-rate hikes from the Federal Reserve as it continues to slow inflation. The S&P 500 and the Nasdaq finished higher for the third straight week, the longest weekly rally since April. The Russell 2000 also enjoyed a solid week. The Dow...

SMALL CAPS LEAD MARKET RALLY

May 24, 2023

Over the last month, the U.S. stock market has staged an impressive rally. The S&P 500 is now down 9.5% year-to-date, coming back over 15% from its mid-June low.

THE MARKETS (AS OF MARKET CLOSE AUGUST 12, 2022)

May 24, 2023

The stock market posted its fourth straight weekly advance, the longest consecutive weekly rally of 2022. Investors turned to stocks on the premise that the Federal Reserve may reduce the pace of its economic tightening campaign after three major indicators showed that inflation subsided in July. With this week's performance, the S&P 500 has recouped half of its losses from the beginning...

TOTAL RETURNS ARE WHAT COUNT

May 24, 2023

Given recent volatility in stock markets, investors may be drawn to more “defensive” sectors of the stock market such as utilities or consumer staples. It is often claimed that the dividend income from those names provides much-needed stability to returns.

NONPROFIT SPOTLIGHT PARTNER FOR JULY 2022: REINS OF LIFE!

May 24, 2023

Tina Patton, CSOP™, CISM®, Vice President, Director of Nonprofit & Foundation Engagement states, “Indiana Trust is honored to highlight the extensive programming at Reins of Life which is geared toward improving the quality of life for individuals with disabilities through horseback riding therapy – and to be able to share this information with others.”