Congress finally agreed this week to end the longest government shutdown in US history. The market celebration early in the week was short-lived as nervous investors just couldn’t get past a couple of clouds presently hanging over the markets.
First of all, the odds of an interest rate cut in December are declining. Chairman of the Fed, Jerome Powell, warned the markets just two weeks ago that another interest rate cut in December was “far from assured,” but the markets shrugged it off. However, similar comments from other Fed governors this week have caused the markets to now put the odds of another rate cut in December at 50/50.
Concerns about inflation moving in the wrong direction seem to be central in the Fed’s reluctance to cut rates further.
Additionally, there’s a creeping nervousness among some investors that the boom in AI and data center-related stocks may have gotten a little ahead of itself. While there’s a risk some of the big gains in these stocks could soon unwind, it’s unlikely to look anything like the Internet Bubble as these big tech companies today are sitting on massive piles of cash. It would actually be healthy for the overall markets to see some investments rotate away from these highly-valued tech companies to companies trading at greater discounts.
https://russellinvestments.com/us/blog/market-volatility-rotation-tech-mwir
Have a great weekend.
Jack C. Harmon II, CFP®, CIMA
Principal, Harmon Financial Advisors
Registered Principal, Raymond James Financial Services
Harmon Financial Advisors, Inc. is an independent, fee-based financial planning firm and an independent Registered Investment Advisor. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. and Harmon Financial Advisors, Inc. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Harmon Financial Advisors, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc.
The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information in this commercial email has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Harmon Financial Advisors, Inc. and not necessarily those of RJFS or Raymond James.
There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results.
Investing involves risk and you may incur a profit or loss regardless of strategy selected. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility
Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.
Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Investments & Wealth Institute™ (The Institute) is the owner of the certification marks “CIMA” and “Certified Investment Management Analyst.” Use of CIMA and/or Certified Investment Management Analyst signifies that the user has successfully completed The Institute’s initial and ongoing credentialing requirements for investment management professionals.
