Q: When is good news for investors, bad news for the financial markets & when is bad news for investors, good news for the same markets?
A: The Sword of Damocles, The Federal Reserve’s interest rate tightening, hangs over the equity markets. Positive economic news brings fear the tightening sword will fall. Negative economic news celebrates the sword will not fall.
Q: How does the Damocles metaphor impact portfolio strategy for investors?
A: Disinflation combined with news of slowing growth can bring higher valuations especially for high cash flow paying assets.
Q: What happens July 12th that appears to be great news for the stock market?
A: The trailing 12 month Consumer Price Index (CPI), Inflation, appears poised to drop to near 3%.
Dow Jones Industrial Average (12/30/2022 – 06/23/2023)
– Courtesy of Bloomberg LP
Evolution of Atlanta Fed GDPNow Real GDP Estimate for 2023 – Q2 (06/20/2023)
– Courtesy of The Atlanta Federal Reserve
U.S. Consumer Price Index – Urban Consumers Year over Year, Non Seasonally Adjusted (06/23/2021 – 05/31/2023)
– Courtesy of Bloomberg LP
Rents Year over Year Change in Median U.S. Asking Rent (02/2020 – 05/2023)
– Courtesy of Redfin
U.S. Consumer Price Index – Urban Consumers Month over Month, Seasonally Adjusted (06/23/2021 – 05/31/2023)
– Courtesy of Bloomberg LP
Standard & Poor’s 500 Index -Bi Monthly Earnings Per Share and Current Estimates (06/01/2017 – 12/01/2024)
– Courtesy of Bloomberg LP
Headline Round Up
*Stock Market Rally Costs Bears $120 Billion Since Mid June!
*Short Bets on U.S. Stocks Hit $1 Trillion This Month & Highest Since April 2022.
*Morgan Stanley’s U.S. Chief Equity Strategist, Mike Wilson Smith, Has Some Explaining to Do.
*Shockingly Good New Home Housing Starts Since 2016?
*Wall Street Sours on America’s Downtowns. Investor’s dimming view isn’t good for city’s budgets or residents either.
*Distressed U.S. Commercial Property Assets Swell to $64 Billion.
*Facebook/Meta Mark Zuckerburg vs Elon Musk Cage Match!
*Energy Grid Fail: ERCOT Asks Texans to Conserve Energy Again. What about the rest of the summer?
*Superstar Attorneys Raking in $15 Million Per Year More than Top Investment Bankers?
*Permian Basin Out-Producing Saudi Arabia’s Ghawar Field, But Slowed in Recent Months.
*Adobe Inc. Soars on Artificial Intelligence (AI) Feature Rollout Forecast!
*Permian Gold Rush Continues as Civitas Resources, Inc. Buys NGP Energy Capital Management for $4.7 Billion.
*Virgin Galactic Soars into Orbit with June 27 Start Date!
*Bitcoin Tops $30,000, Highest Since April, on Major Crypto Initiatives Backed by Major Market Players.
Profit Report
1. Why does McGowanGroup Wealth Management (MGWM) post our favorite CPA’s and Estate Planning Attorneys on our website*?
* MGWM does not receive compensation for/pay for referrals.
2. Why is your wealth management team important for your financial legacy after you are gone?
3. What are 3 of the biggest mistakes clients can make in retirement planning and how do we avoid them?
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Retiring too soon: Avocation Phase.
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Overfunding kids and grandkids during retirement: Set clear, defined boundaries and stick to them.
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Overspending: 80% of free cash flow leaves a 20% reinvestment rate.
