Inflation Makes a Comeback

We hosted Liz Ann Sonders, Chief Investment Strategist at Charles Schwab to discuss the current state of the market and other pertinent topics, including recent inflation and interest rate news, how the 2024 presidential election may impact markets, and how investor risk profiles can help determine where investors should place their money. Important Disclosure: This recording is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal or tax advice. All investments involve risks, including the loss of principal. An investor should consult with their financial professional(s) before making any investment decisions.

The U.S. equity market officially entered bear market territory at the close on June 13, 2022. The Fed has engineered the tightening of financial conditions – including the equity market sell-off – in order to slow the economy and get inflation under control. Staying invested through the volatility is the best approach to achieving your long-term investment objectives.

Stocks sold off on Friday, April 29th as expectations of a recession increased. The Federal Reserve will continue to tighten financial conditions - targeting the equity and housing markets - until inflation is brought to heel. There is a lot of bad news already priced into this market, but it could get worse as the Fed tries to engineer an elusive economic “soft-landing.”

Stocks have had a volatile start in 2022 with prices down over 10% intraday from the peak, briefly into correction territory. Interest rates are primarily to blame but geopolitical risk is contributing. So far, there is only limited cause for concern and some positive technical signs are appearing.

Today is the 150th anniversary of the Chicago Fire, and Congress almost burned down the U.S. economy with the recent debt limit crisis. With the Senate voting to raise the limit, the current crisis has been averted, but only temporarily. The labor market recovers fitfully, and supply chain disruptions increase the likelihood of a short bout of “stagflation-lite.” The Fed is still on track to announce tapering in November. Show Notes:  Investing in the Age of Financial Repression

Inflation, interest rates and peak growth rates in GDP, corporate earnings and stimulus. Is this as good as it gets, and is the bill for all the fiscal and monetary stimulus about to come due?

The inflation genie is out of the bottle. Is it transitory or will the Fed be forced to respond - and what does that mean for the stock market?

Stock markets have had the best twelve month performance since 1936, fueled by massive policy stimulus and positive vaccine developments. Last week the Federal Reserve pivoted away from their long-standing policy of preemptive rate hikes - inflation is coming. Will it derail the rally?

At what point do increasing inflation expectations affect investor risk appetite? With vaccine success and reopening on the horizon, will the fiscal stimulus plan cause the economy to overheat? Beacon Pointe Chief Investment Officer, Michael Dow, CAIA, CFA, CPA shares his insight ahead of the next stimulus bill.

In this year-end episode of ‘Markets in Motion’, Beacon Pointe Chief Investment Officer, Michael Dow, CAIA, CFA, CPA, takes listeners on a look-back journey of the extraordinary year of 2020 as well as what’s to come in 2021.