Welcome to the February edition of the monthly newsletter!
While we welcomed the new year with open arms, January started off with a few curve balls. We saw short-term consumer confidence weaken due to a rise in both inflation and the Omicron variant of the coronavirus. While this latest flow of economic data suggests that the economy is recovering, it appears that many households are beginning to worry about inflation and what’s going to be done about it.
Quickly switching gears for a brief look forward, February begins the runway leading up to tax season. You should have received your W2 from your employer by January 31st; if you haven’t, make sure to check with them. Start thinking about how you’re going to file your taxes and if you’re going to hire someone to help -- April 18th will be here before you know it. And if you’re owed a tax refund, the sooner you file the sooner you can reinvest what’s rightfully yours!
Sending you and yours happy Valentine’s day wishes, and a reminder that we’re grateful to count you as a client. If there’s anything you need, please schedule some time with our office.
Stocks were negative in January.
Major bond indexes were down last month.
After several stressful years of pandemic lock downs and decreased spending, this year's consumer buying itch is still tingling well past the holiday season. Many continue efforts toward normalcy with increased consumption, attempting to live a more familiar life through travel and simply getting out of the house. Unfortunately, this increased demand for goods and services was met with low supply, contributing to persistent inflationary concerns. It's been announced that the Federal Reserve is preparing to raise interest rates to curb inflation, and we'll make sure to report back as we learn more.
Additionally, the unemployment rate is now 3.9%, back to pre-COVID-19 levels and GDP clocked in at 6.89%, above expectations of 5.5%. Those are really strong numbers which factor into the Fed’s decision to raise interest rates. If the economy was on wobblier footing – higher unemployment, slower GDP growth – they would be less inclined to taper their bond purchases and raise interest rates.
THE BEST MULLET IN AMERICA
It was with passion and purpose that 11-year old Allan Baltz from Arkansas entered his long luscious locks into the USA Mullet Championship. In late 2021, Allan’s fun quarantine hairstyle ended up taking first in the kid’s division and the prize money was all his. Having had personal expereince in foster care, the generous middle schooler used his $2,500 winnings to help other children find a family, donating his winnings to two Arkansas nonprofits: Together We Foster and Project Zero. Allan’s story of giving back has not only increased awareness, it’s inspired many others to also donate to foster care organizations, raising more than $3,000. Now that’s a story that will bring a smile.
To read more on this moving story or watch Allan Baltz’s hair blow in the wind, click here.
THOUGHT FOR THE MONTH
Michael Jordan (born February 17, 1963) is an American basketball player and businessman. According to the official National Basketball Association (NBA) website, you'll find: "By acclamation, Michael Jordan is the greatest basketball player of all time." You don't become the GOAT (Greatest of All Time) without some challenges along the way. His inspiring quote (above) is a powerful reminder of how overcoming failure can lead to excellence.
Dow Jones Industrial Average: The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
Dow Jones U.S. Real Estate Total Return Index: The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.
NASDAQ Composite: The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.
S&P 500 Bond Index: The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.
S&P 500 Consumer Discretionary: The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.
S&P 500 Consumer Staples: The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.
S&P 500 Energy: The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.
S&P 500 Financials: The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.
S&P 500 Index: The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.
S&P 500 Utilities: The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.
S&P U.S. Aggregate Bond Index: The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.
S&P U.S. Treasury Bond Index: The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.
Consumer Prices - CPI: Consumer prices (CPI) are a measure of prices paid by consumers for a market basket of consumer goods and services. The yearly (or monthly) growth rates represent the inflation rate.
PCE (headline and core): PCE deflators (or personal consumption expenditure deflators) track overall price changes for goods and services purchased by consumers. Deflators are calculated by dividing the appropriate nominal series by the corresponding real series and multiplying by 100.
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A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.
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