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Mosaic Weekly Article 5.15.2022

May 16, 2022

Happy Friday the 13th! For once the market did not get spooked lower to end another long, drawn-out week. Today’s welcome and overdue rally really points to the oversold technical levels we have been seeing in my opinion. To be clear, while I certainly felt better today, we are far from out of the woods. I would characterize the Friday close higher as a typical “bear” market rally. Don’t get me wrong, I hope this is the beginning of an upward trend, but I know the reality and history of events like these. We will need to see more than one good day and better economic fundamentals to truly have made a turn higher. Federal Reserve Chairman Jerome Powell admitted in an interview on late Thursday afternoon that the Fed was behind the curve and late to getting ahead of the inflation bubble. He also reiterated there would most likely be two more half point increases in the months ahead and that the path to a “soft” landing would be difficult. This all sounds eerily similar to the airplane metaphor I used last week! Overall, the broader financial markets reacted positively to the slice of humble pie the Chairman served up and rewarded us accordingly on Friday with a bit of a relief rally.

Over the past week, my mind has been playing the quote from Tom Hanks in the movie Apollo 13, “What exactly do we have on this ship that is working?”. In other words, what in the market is working? There have been few places to hide from this storm. Equities, fixed income, international, crypto currencies, and traditional defensive stalwarts like gold and silver have not been immune to the downturn. Even cash in the bank cannot keep pace with the current inflationary levels we are experiencing. Historically, this all makes for an unusual financial landscape to navigate, but we know this will not last. If anything, new and fresh opportunities are being created to build long-term wealth. While a diversified portfolio has not been rewarded today, we know that over the long-term, this is a well-traveled path to financial success. We have spoken with many of you over the past few weeks, reaffirming goals, revisiting financial plans, and simply catching up. Honestly, this is the best part of our jobs as the relationships and trust we have built over time are truly important and meaningful in many ways. We are thankful for our clients!

Have a great weekend!´╗┐