Broker Check

Mosaic Weekly Article 7.3.2022

July 06, 2022

Let me start by wishing everyone a very safe and happy 4th of July. Despite the differences we might share, we are fortunate to live in the greatest country in the world. The first half of the year is now officially in the books (thankfully). We have all heard the saying “the good, the bad, and the ugly”. Let’s take that in reverse order for our purposes of reviewing our current situation now that we are halfway through 2022.

The ugly – A lot to cover in this section. War, INFLATION, market volatility, politics, Supreme Court decisions, and general angst to name a few. We have touched on all these topics over the past few months to some degree. While uncertainty remains high for the second half of the year, I believe we are headed in the right direction.

The bad – Covid is lingering, housing data has cooled significantly, and supply chains still show some levels of congestion in certain areas. While these specific issues might be perceived as bad, I don’t quite see them as ugly right now. In fact, I view these concerns as improving in many ways. The housing piece is the x factor, particularly if you are forced to relocate for some reason. Inventories will likely return to more normal levels as mortgage interest rates increase but your monthly payments will be higher.

The good – Now on to the good! Yields in our bank accounts are finally moving higher. Fixed income and bonds are looking more attractive again, which is a big deal for retirees. It’s been a long time since we have been excited about fixed income investments. The unemployment rate remains low, and wages overall have moved higher. Corporate earnings are on the horizon again and with so much negativity already priced in, we could be in for some better-than-expected news. Corporate balance sheets remain relatively healthy, which indicates that they should be able to weather this storm fairly well.

In the weeks ahead, we will be seeing quite a lot of economic data points. This will no doubt influence how the rest of our summer may look. The inflation level readings and Federal Reserve responses will be closely watched. We have yet to retest the market lows we saw on June 17th (which isn’t a bad thing), but often that is needed before we can establish a path higher. For now, we must simply settle in and let the dust settle. Exactly like how I plan on spending my weekend: enjoying a nice BBQ and some much needed rest. I hope you and your family can do the same!