Will we win the Great War on Inflation and can we win without falling into a recession? That question has been the big question since the Chairman of the Federal Reserve Jerome Powell declared war on inflation in March of 2022. One year into the conflict, Chairman Powell has held to his word and raised interest rates from .25% to 5% and inflation has dropped to 5%. An unlikely participant joined the conflict March 10th with the failure of Silicon Valley Bank. The bank failure may bring an end of the Great War on Inflation and the warning light that causes the Federal Reserve to retreat and stop raising rates. While the War on Inflation has taken center stage, the financial markets have quietly produced two volatile yet sneaky strong quarters.
Over the last quarter volatility has been the theme. In early February, concerns about rising inflation and interest rates sparked a sell-off, with the S&P 500, Dow Jones Industrial Average, and NASDAQ Composite all falling by more than 10% from their recent highs. However, the markets rebounded in the latter half of March, with the S&P 500 and other indices posting gains for the month.
Despite the ups and downs, the major indices ended the quarter in positive territory. The S&P 500, which tracks the performance of 500 large-cap companies listed on U.S. stock exchanges, was up approximately 6.2% for the quarter. The Dow Jones Industrial Average, which measures the stock performance of 30 large, publicly-owned companies in the U.S., was up approximately 7.8%. Meanwhile, the tech-heavy NASDAQ Composite, which includes many of the world’s largest tech companies, was up approximately 2.8%.
Time will tell if the War on Inflation has ended and these sneaky quarters when things feel the bleakest are significant contributors to your long-term financial success.
On the Personal Side:
Spring has sprung and I am excited to get my old jeep out from time to time and huff some pollen. The girls are in full on dance season and are really excelling. Lila will finish middle school this coming quarter and Amelia will finish elementary school. I feel like time is sneaking up on me too with more gray in my beard and a daughter going to high school next year.
On the Business side:
We are in the final phases of changing from Matt Logan Inc to TMRW Wealth. The sign on the building has been changed already. The new website should be done in the coming weeks. While the process has taken a little longer than I optimistically hoped, we are very excited with how things are coming together. Keep an eye out as we will also be sharing our new contact information with the launch in an email. Please be sure to download our new contact information when we send out that email.
Bristey had her baby! Wrenley Grace Thomas was born on February 10th. We are excited for Bristey and her family. Everyone is healthy and doing well.
Social Media:
We want to connect with you more via social media. Let’s connect on LinkedIn or Twitter at @mattloganinc ,or follow my channel on Youtube or follow my page on Facebook. We will be posting regularly on our blog as well so be sure to check it out from time to time.
Introductions:
Tax time sparks a lot of conversations with people about financial situations. With tax season ending many people have experienced tax surprises and are looking to be a little more pro-active in their financial lives. If we can be of assistance, please feel free to pass our name along.
Online Access:
If you have already set up your account and would like to access your accounts, click here.
The Bus:
The purpose of the bus is to support all the amazing nonprofits in the area. As more events are being schedule for charitable organizations and auctions and raffles are being put together, we want to donate more. We love to donate certificates for the bus to various charity auctions. If you would like to use the bus, you can email [email protected] to inquire about it. For more information on the bus, you can go to www.whythebus.com.
Fourth Quarter Outlook:
We feel that the Silicon Valley Bank event may contribute to the end of the Fed raising interest rates. Inflation appears to be getting in line. The top three things for investors to watch in the second quarter of 2023 could be:
- Inflation and Interest Rates: One of the most important things for investors to watch in the second quarter of 2023 will be the trajectory of inflation and the response of central banks around the world, which could impact interest rates and global growth prospects.
- Global Economic Recovery: The pace of global economic recovery and the impact of ongoing pandemic-related disruptions on various sectors of the economy will continue to be an important factor for investors to monitor.
- Geopolitical Tensions: Ongoing geopolitical tensions, including trade tensions between major global powers, could continue to impact the financial markets and contribute to volatility in the second quarter of 2023.
As always, we are here to help and grateful for the opportunity to serve you and your loved ones.
With gratitude,
Matt Logan
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. The views stated in this letter are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Barclays Capital U.S. Aggregate Bond Index, which used to be called the “Lehman Aggregate Bond Index,” is a broad base index, maintained by Barclays Capital, and is often used to represent investment grade bonds being traded in the U.S. Barclays Capital (BarCap) U.S. Aggregate Bond Index is made up of the Barclays Capital U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Based Securities Index, including securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million.
