Mosaic Weekly Article 11.11.2022

I would like to start this weekly update by thanking and honoring all our Veterans for their service and loyalty to our country.

“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” John F. Kennedy

There is a term often used in the financial world that I believe is appropriate in assessing this week’s market moves, “Green Shoots”. What are green shoots you ask?

"Green shoots" is a term used to describe signs of economic recovery or positive data during an economic downturn. The term "green shoots" is a reference to plant growth and recovery, when plants start to show signs of health and life, and, therefore, has been employed as a metaphor for a recovering economy.                                                                                                                                                              Source: Investopedia

The latest CPI (consumer price index) data released this week might be telling us that the work being done by the Federal Reserve is indeed starting to work. The CPI increased 0.4% for the month and 7.7% from a year ago, both lower than expectations. The declines came mostly in medical care services, used vehicles and apparel. Rents and shelter costs were slightly higher year over year, but a moderation in pricing is expected as well in the months ahead. Inflation, overall, remains at high levels but this latest data point makes a case that the levels have peaked (June) and may be rolling over now. Our markets welcomed this news and responded in a positive manner.

The other significant data point the Federal Reserve is watching is the labor market. The Fed has stated in several recent meetings that they would need to see the unemployment rate move higher before a slow down in interest rate increases could take place. We are now seeing more signs, particularly in the technology sector, of real job losses taking place. Companies like Meta, Twitter, and Salesforce have announced reductions in their respective work forces over the last several weeks. While job openings in total remain strong, certain sectors of the economy are seeing a real slow down in corporate spending which in turn is causing some turmoil. While we are never advocates of individuals losing their jobs, we do point out that this is a consideration the Federal Reserves takes into account when making their decisions.

Where we go from here is still up for debate, the signs are there for us to possibly breathe a little easier. The bumpy ride is not over, but I will gladly take positive days like we had on Thursday and smile. We are quickly plowing our way into the holidays, the colder weather, and all the craziness this will bring. Though I will undoubtedly love these upcoming months and the time spent with my friends and family, my thoughts will constantly turn to an early spring and the potential emergence of "green shoots."

Have a wonderful weekend!

https://www.investopedia.com/terms/g/green-shoots.asp

https://www.cnbc.com/2022/11/10/consumer-prices-rose-0point4percent-in-october-less-than-expected-as-inflation-eases.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

https://www.cnbc.com/2022/11/10/peak-inflation-in-europe-is-almost-within-reach-european-central-bank-member-says.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

https://www.cnbc.com/2022/11/10/meta-twitter-salesforce-tech-layoffs-impact-on-the-economy.html