Prosperity Partners Blog
An Uptick in the Unemployment Rate
The unemployment rate rose from 4.4% in September to 4.6% in November—see Figure 1. The US Bureau of Labor Statistics did not conduct its household survey in October due to the government shutdown. The household survey includes the unemployment rate
Fed Cuts Rates Again, Signals a Possible Pause
The Federal Reserve followed through on what was a widely expected rate cut, reducing the fed funds rate a quarter-percentage point (1 basis point = 0.01%) to a range of 3.50 – 3.75%.
Black Friday’s Spending Spree
A December 1 headline from Reuters sums up the start of the Christmas shopping season: US Holiday Shoppers Shake Off Economic Blues for Online Spending Spree.
Data Disconnect
Retailers are ringing up solid earnings, but consumer confidence surveys tell a different story, suggesting the mood is far from upbeat. This disconnect raises a big question: if shoppers are still buying, as we will highlight in a moment, why do they feel so uneasy about the economy?
Buyer’s Market – With Strings Attached
Redfin reported last week that sellers are grappling with the strongest buyer’s market since the real estate brokerage firm began compiling records back in 2013. Sellers now outnumber buyers by 37%.
Investors Unfazed by Shutdown
The government shutdown lasted from October 1 to November 12. It was the longest on record. During that period, the S&P 500 rose from 6,688.46 (September 30) to 6,850.92 (November 12), or an advance of 2.4%. As we’ve noted in prior shutdowns, investors typically ignore political drama.
The Job Market’s Missing Pulse
The government shutdown has been and will always be prominently featured in the 24-hour news cycle. Travelers are feeling it, furloughed federal employees wonder when they will receive their next paycheck, and even the housing market is affected as some buyers are left in limbo.
One Cut, Two Cut: The Fed’s Delicate Balancing Act
The Federal Reserve delivered a widely expected 25-basis-point rate cut (bp, 1 bp = 0.01%), but Fed Chief Jay Powell tempered market enthusiasm by signaling that a December cut is far from certain.
All That Glitters is Gold
On October 12, 2022, the S&P 500 Index hit a cyclical low. In hindsight, that marked the end of the 2022 bear market. Fast forward three years, and the current bull market has now been running for three years.
A Three-Year Anniversary
On October 12, 2022, the S&P 500 Index hit a cyclical low. In hindsight, that marked the end of the 2022 bear market. Fast forward three years, and the current bull market has now been running for three years.
Government Shutdowns: Why Investors Rarely Care
Historically, US government shutdowns have had minimal impact on the stock market. Let’s review the graphic below. Since 1976, government shutdowns of varying lengths have had little effect on stocks, as measured by the S&P 500 Index.
Reductions in Interest Rates and Market Response – Historical Review
A couple of weeks ago, the Federal Reserve cut its key rate, the fed funds rate, by a quarter-percentage point to 4.00-4.25%. It’s the first rate cut since last December. So, is this one and done, or will there be a series of rate reductions? A speech delivered last week by Fed Chief Powell wasn’t overly dovish, but the Fed meets two more times this year, and Powell left the door open to at least one more rate cut in 2025.