It has been a bit quieter this week as summer vacation season kicks into high gear. We have grown accustomed to seeing slower activity in late July through August but even the slightest headline can change that quickly. With the Federal Reserve set to meet next week, expectations remain that one more interest rate increase will occur before hopefully concluding this monetary policy cycle. Chairman Powell, as usual, will hold a post meeting question and answer press conference where the rhetoric he uses will be closely watched. He is known for using specific language indicating which direction the monetary policy makers are leaning. This will be significant in indicating if they believe they have achieved their stated objectives. Bringing the inflationary levels down to an acceptable level has been the primary goal along with stable unemployment and a moderated growth in the GDP numbers. From my perspective, they have achieved what is needed to land us in a safe place moving forward, while avoiding a recession. Once we get past this meeting next week, the economic forecasters and the Fed will have nearly two months of additional data to digest before the next meeting. That may indeed be enough time to “set the table” and allow the Fed to satisfy their goals.
This has been a big week for corporate earnings. Thus far the results have been more mixed than I think many had been expecting. Seventy-three percent of S&P 500 companies that have already reported have exceeded analysts’ expectations, according to FactSet data. However, that “beat” rate is below a three-year average of 80%, according to The Earnings Scout. Perhaps this is yet another needed sign of a slowing economy and playing into the idea of the Federal Reserve nearing a true conclusion. With 2023 coming out of the gates stronger than anticipated, it would be normal to see some pullback in the weeks ahead as people shift their attention to other things (like vacation!). We still have plenty of the largest S&P 500 companies yet to report their earnings, so it is a little premature to know if the momentum has indeed shifted or not. We shall be watching for any clues!
Many of us are preparing for much needed breaks (myself included) from the day to day schedules we keep. It is important to recharge your batteries, take perspective, and rest for a bit. In my household, we are preparing to not only send our oldest son back to college, but our middle guy will be out the door as well in a few short weeks. We will be down to one left at home! My, what will I do with all that extra time?? I will miss them both very much, but that is life and what we have been preparing for. Having a plan and seeing it come to fruition is the real reward. Just remember to enjoy the ride!
https://www.cnbc.com/2023/07/20/stock-market-today-live-updates.html
https://www.cnbc.com/2023/07/18/goldman-sachs-cuts-odds-of-a-us-recession-in-the-next-year.html
Christopher E. Wasson, CFP®
President
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
MosaicAssetPartners.com
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