October 26, 2023

Weekly Market Update

By Michael McKeown, CFA, CPA - Chief Investment Officer

Weekly Market Update

Chart of the Week

The Federal Reserve Open Market Committee meets next week to decide on the next interest rate move. The Fed raised rates in July and elected to pause in September. Fed Presidents indicated they are content to stay on hold in November and possibly December. This would signal the end of the interest rate hiking cycle.

Looking back over the prior 11 pauses, the yield on the 10-year Treasury was higher two years later in the cycles following 1974 and 1980. One year after the pause, interest rates were at a maximum of 0.8% higher. Today rates are 1% higher than in July. History suggests that a downside in yields remains a possibility.

What happens to the 10-year when the Fed pauses

What We’re Reading

A Few Laws of Getting Rich – Morgan Housel
Consumer Checkpoint: Not Falling in the Fall – Bank of America
Where Are We in the Small Cap Cycle? – William Blair
The economy has been strong. Why are economists so eager to predict it will tank? – LA Times

Podcast of the Week

This is What an 8% Mortgage Means for the Housing Market – Odd Lots, Bloomberg

Marcum Wealth in the News

Catch my discussion on Yahoo Finance about alternative assets like music royalties

Last Week

Housing starts and building permits topped estimates, though higher mortgage rates are expected to keep a lid on home prices. Both services and manufacturing data showed expansion this month, according to the S&P report. Perhaps the story in the news will shift from the recession calls to reflation.

The Past Week

The Week Ahead

The most interesting data point this coming week starts with GDP. Economists expected 0% growth in the third quarter. Strong data now has consensus predicting 4.3% growth, well above the long-term trend of 2%. The price index data for personal consumption is important as the Fed looks to see if core prices are going down.

The Week Ahead

Thank you for reading.

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