The Independent Market Observer

As Goes January, So Goes the Year? Let’s Hope So

January 31, 2023

“As goes January, so goes the year” is a well-known Wall Street maxim that, like most Wall Street maxims, is sometimes true and sometimes, well, not true. As of today, we are very much hoping it does turn out to be true this year. January has been a very good month so far, with a significant bounce back from the terrible results of 2022. It would be nice to see that bounce continue. The good news is that—while still expecting volatility—we can expect the market to continue doing well this year. Let’s walk through the reasons, starting with history.

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Economic Release Snapshot: GDP Growth Beats Expectations

January 30, 2023

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

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Why Is ESG Investing So Controversial?

January 26, 2023

Following up on my colleague Sarah Hargreaves’s post on ESG investing, I thought I would comment on some discussions and questions I have had on the topic. For what is at bottom a simple attempt to make better investment decisions, it has become a surprisingly controversial topic. So, let’s dig in a bit into what is actually happening when we talk about ESG investing. 

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What’s Next for ESG Investments?

January 25, 2023

After two years of explosive growth, investments incorporating environmental, social, and governance (ESG) criteria endured a challenging market environment throughout 2022. The combination of elevated inflationary pressures, geopolitical tensions, and an energy crisis following Russia’s invasion of Ukraine precipitated a challenging backdrop for sustainable investments. Furthermore, skepticism in the U.S. around the efficacy of ESG—due to greenwashing and heightened politicization—slowed the pace of progress compared to that experienced in 2020 and 2021. But as investors turn the page on a volatile 2022, what does the path forward for ESG investments look like?

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Economic Release Snapshot: Producer Inflation Moderates at Year-End

January 23, 2023

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

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Investor Worries on the Rise—But Is It Time to Panic?

January 20, 2023

I have gotten more than the usual number of worried emails, texts, and calls recently—not only from Commonwealth advisors, driven by the concerns of their clients, but from my clients as well. While I understand most of what’s behind those worries—the debt ceiling, at the moment—what is interesting is that last year, during the bear market, I heard much less in the way of worry. It’s not that people weren’t concerned, but there wasn’t the level of immediate fear that I am hearing right now.

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The U.S. Hits the Debt Ceiling (Again): Now What?

January 19, 2023

As of today, the U.S. has borrowed as much as it legally can and will be prohibited from borrowing any more. Or, in the language of the headlines, we have hit the debt ceiling. The new Congress has failed to pass a law allowing the Treasury to borrow the money to make payments that previous Congresses have required the Treasury to make. The Treasury will therefore have to use cash on hand right now, as well as any inflows, to pay the outstanding bills for as long as it can—until the money runs out.

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Monthly Market Risk Update: January 2023 [SlideShare]

January 18, 2023

My colleague Sam Millette, manager, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Market Risk Update. Thanks for the assist, Sam! Let’s take a closer look.

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Economic Release Snapshot: Inflation Expectations Fall

January 17, 2023

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

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Will Q4 Earnings Defy Expectations?

January 13, 2023

We are at the start of the period in which companies release their results for the fourth quarter of 2022, known as earnings season. With everything going on—inflation, rate hikes, a labor shortage, the strength of the dollar, a pending recession, the list goes on and on—the results are unusually uncertain this time around. Analysts are struggling to figure out exactly what all this means.

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Economic Risk Factor Update: January 2023 [SlideShare]

January 11, 2023

My colleague Sam Millette, manager, fixed income on Commonwealth’s Investment Management and Research team, helped me put together this month’s Economic Risk Factor Update. Thanks for the assist, Sam! Let’s take a closer look.

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The Debt Ceiling: We’ve Seen This Movie Before

January 10, 2023

With the new Congress taking office—and specifically the extended time it took for the House Republicans to elect their new speaker—markets are increasingly focused on the potential effects of politics on the economy this year. I have had several questions about the debt ceiling in particular, so let’s take some time and think through what all of this might mean.

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Economic Release Snapshot: Business Confidence Drops

January 9, 2023

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

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Looking Back at the Markets in December and Ahead to January 2023

January 6, 2023

December saw a sell-off, reversing some of the bounce from October and November and leaving markets up for the quarter. Unfortunately, that only reversed a small part of the damage done earlier in the year. 2022 closed as one of the worst years in recent memory for financial markets.

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Angst Is in the Air: A December Jobs Report Preview

January 5, 2023

As we wait for tomorrow’s jobs report, there is a lot of angst in the air. One of the most predicted recessions in history is very likely to hit this year. The manufacturing business sentiment survey yesterday was down, seemingly confirming that outcome. The Fed is looking to substantially weaken the labor market, in search of lower inflation, and according to the meeting notes released yesterday, is going to keep raising rates until that happens. All of the signs are that the jobs market will weaken significantly. But the question remains, is the job market actually going to weaken?

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Market Thoughts for January 2023 [Video]

January 4, 2023

December closed out a tough year for markets. The U.S. indices showed single-digit declines for the month, capping off drops for the year of about 7 percent for the Dow, more than 18 percent for the S&P 500, and 32 percent for the Nasdaq. The primary drivers were rising inflation and Fed rate increases. Still, job growth remained healthy, and consumer spending and business investment rose.

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Economic Release Snapshot: A Busy Start to 2023

January 3, 2023

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

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