It’s hard to make sense of the latest GDP (gross domestic product) number from the fourth quarter that was released on Thursday morning. The number came in at +2.9% which was slightly higher than the +2.8% that had been forecasted. This may seem a little confusing considering the amount of recessionary fears we have been hearing about nonstop. This is still lower, however, from the +3.2% reading we saw for the third quarter of 2022. While the economy is clearly “cooling”, I’m sure many are wondering if it is cooling quickly enough for the Federal Reserve to step off the gas as they are now expected to do. In my opinion, this is another sign that a slow down or pause is indeed needed and not a push in the other direction. If we are to get a soft economic landing as possible, we simply have to let the data catch-up. The good thing is, by this time next week, we will have a solid indication of what the Fed is thinking. Their next meeting and decision will take place on Tuesday and Wednesday of next week.
The overall market action was slightly more positive this week, mostly led by better-than-expected corporate earnings. There is, however, more speculation circling that a lot of corporations have not yet revised their expectations low enough for the coming months. While we continue to see evidence of strong consumer spending, corporate spending is slowing considerably. Much of that is evident by the layoffs being seen across the technology world. Don’t get me wrong, many of these companies became “bloated” over the last few years and are being forced to pare back some of the wasteful spending. Worker productivity and redundancy are the main culprits and times like these force companies to do a deeper dive into their balance sheets. This is ok and warranted. I expect we will see more headcount reductions in technology and retail in the coming months. I still don’t believe that it will reach the numbers the Federal Reserve is hoping for, but that part of the playbook is still being worked through. More time is needed before we can reach any true conclusions.
This time of year brings us many things to consider. Cold weather, playoff football, and TAXES. Many of you have already received your 1099R statements for your individual retirement accounts. We are expecting to see the regular 1099 statements for your investment accounts in the coming weeks. Keep in mind that this is out of our control. We are at the mercy of the investment world and the custodial banks to generate and send them out. Like you, we want to get this annual rite of passage behind us as quickly as possible. I will be sure to post a more accurate time frame in this weekly update once we have a little more clarity on the timing. If you have an online login, that will be your quickest way to access and print out your statement. As always, reach out if you need help or guidance.
Have a great weekend!
Christopher E. Wasson, CFP®
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.