🦉 This Week in the Markets

A 4-Minute Recap

Author

Al Atencio
August 16, 2024 • Estimated Reading Time: 4 minutes

Catch-up with what’s happening in the markets in 4 minutes.

I’m reading and scrolling, and bringing you the best, so you don’t have to.

End of Week Markets Update

1) Last week's big market scare went away as quickly as it came. Bull market back on? 🤣 

This is a great example of why long-term buy-and-hold investors should tune out these events.

Volatility spiked in part because funds were forced to unwind yen carry trade bets. That’s not you! Unlike levered funds who are forced sellers, you don’t need to react.

2) The big inflation spike is practically over. Inflation metrics continue to confirm it.

But, as we know, the debate persists.

One problem: while economists focus on decreasing rates of change, households focus on the higher absolute costs of goods and services post-pandemic - which will not come back down.

3) Despite the overall downtrend in inflation, housing is the big ticket item that continues to stay higher for longer.

4) In this week’s example of advisors making more money than clients - it even happens to savvy billionaire families.

Business ventures often don’t meet expectations.

The problem is when that happens and advisors or managers still make a ton of money.

Think hard about who you get financial advice from. In the wise words of grandpa Buffet:

“Wealthy individuals, pension funds, endowments and the like will continue to feel they deserve something “extra” in investment advice. Those advisors who cleverly play to this expectation will get very rich. This year the magic potion may be hedge funds, next year something else.”

Warren Buffet - 2023 Berkshire Hathaway Annual Latter

Charts

Core CPI inflation (which excludes volatile food and energy) is one of the Fed's preferred metrics to track inflation.

The 3-month change in Core CPI is now below 2%. Which is the % threshold the Fed has been looking for to cut interest rates.

Everything indicated that the Fed will start cutting rates soon, at the next September Fed meeting.

Is a recession looming? Not according to fund managers.

Over 80% of mangers surveyed by BOFA are expecting either a soft-landing or no landing scenario for the global economy.

And finally, some parting wisdom:

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