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The swiftness and the severity of the increase in bond yields and the equity market downturns, accompanied by rotation into Value stocks in lieu of Growth stocks and starting at the very outset of January, was very much like we expected. We understand that the general trajectory of equity markets during and after the beginning of the Federal Reserve’s (Fed) tightening of monetary policies phase should be greatly determined by whether the tightening is into a still robust economy. We view PMI levels as the best indication of the strength of the economy, and we anticipate a continuing robust global economy for at least the majority of this year.
The longer inflation is allowed to persist, the more likely will such expectations become more “entrenched.” The Fed is concerned that wage gains above worker productivity gains could possibly lead to a wage-price spiral type of inflation. Such inflation would tend to be more persistent. Expectations of wage gains, along with a tight labor market, are manifestations of the beginning expectations of continued elevated inflation.
We agree with the consensus that selective stock picking will become increasingly important during 2022 to achieve optimal returns. While we also expect volatility, we expect that volatility to occur earlier than consensus. We believe that excess cash at the beginning of this year presents the best risk/reward position to take advantage of the anticipated market declines. We would not be surprised if the market downturn in the S&P 500 exceeded 10% before rebounding to close with single digit returns. We expect the 10-year Treasury yield to exceed consensus expectations. Furthermore, we also expect oil prices, economic growth rates and inflation rates to all exceed consensus estimates.
Today’s volatile markets are not a surprise to us. As we stated in last week’s commentary: “We continue to expect ongoing volatility in financial markets.” We also highlighted that the Omicron variant “will be a continuing concern. Its ultimate effects on economic activity and financial markets remain unknowable. We view the latest downturn in interest rates as problematic.”
The transfer of wealth from one generation to the next is an obstacle all high-net-worth families face during the estate planning process. The team at NewEdge Wealth has prepared a whitepaper with everything you need to know to prepare the next generation for wealth.
As we head into the new year, now is the time to take stock and assess whether your wealth strategy utilizes the appropriate strategies to address the current tax law, soaring market returns, and any changes to your goals or family circumstances.
It was announced this morning that President Biden will renominate Jerome Powell as the Federal Reserve chair. He will also elevate Fed Governor, Lael Brainard, to vice chair of the Fed.
On November 2nd, 2021, Congress released the most recent tax provisions for the Build Back Better Act, including several proposed changes to retirement plans. Amongst the changes are those that directly target contributions to retirement accounts with large balances, limit future Roth Conversions and potentially eliminate the Backdoor Roth IRA strategy.
After months of negotiations between moderate and progressive Democrats, on November 2, 2021, Congress released the latest version of the Build Back Better Act for the $1.75 trillion social and climate spending bill.
With all the noise out of China, we turned to a panel of seasoned Chinese investors to hear their insights and share with us how they’re investing.
Hosted by John Straus, Jr., panelists Marissa Dungey and Jim Dougherty, Founding Partners of Dungey Dougherty PLLC, discuss the proposed changes included in the Build Back Better Act and the impact it may have on you, your family and estate
Both fearless women in their own right, Lindsey Boyd, Founder of Rondel Jewelry, and Sarah Flint, Founder of Sarah Flint shoes join our host, Susan Kim, CFA®, to share their visions, successes and challenges, and how they are building incredible luxury brands.
President Biden and Democrats in Congress have been working on a $3.5 trillion spending and tax package, and the details are starting to be revealed. On September 15th, the House Ways and Means Committee voted to approve tax provisions to be included in the Build Back Better Act.
House Democrats have circulated initial proposals around tax policy changes that they want to include within the Build Back America Act, the massive tax-and-spending budget reconciliation bill that party leaders hope to move through the chamber in the coming weeks. Many of the proposals within the bill are what was expected in one form or another, but there are a few new wrinkles.