Inflation comes in higher than we had hoped, and geopolitical uncertainty has us monitoring markets closely.
If you recall, in our last two newsletters I’ve mentioned that we’ve gone a few months since seeing a pullback in the markets and that it wouldn’t be a surprise to see a “pause that refreshes,” which is typical of any market and is healthy overall, as it allows things to “reset.” Well, it may have just arrived.
This past week we saw the CPI come in higher than expected. Although not far from the estimates, it’s not the news investors were hoping for. In order for the Federal Reserve to start cutting rates, inflation would need to continue to go down, and the longer this takes, the longer it will take the Fed to start cutting rates. Additionally, the weekend also brought news of further geopolitical tensions as Iran attacked Israel. And as of the time of this writing, the world now watches as Israel weighs its response and possible retaliation. This all could have an impact on the markets. Please understand that any uncertainty can be worrisome and usually will have a negative effect on the markets, as the markets hate uncertainty. Interestingly, when that uncertainty is addressed or when it goes away, the market tends to resume the direction it was going before such an event.
As we look at the data, it currently still supports the position that we’re in the confines of an up market despite the short-term concerns, so we will be taking it one day at time. And as you’ve seen in the past, the nature of active management is to have the ability to navigate as market conditions change. That’s what our firm, along with our various money managers who manage our clients’ money, do week-in and week-out, and should there be an event(s) that warrants a change in our strategies, our managers will also be able to adjust accordingly. If you have any questions at all, we’re always just a call or email away. Please use our dedicated client email – albanoteam@gvcaponline.com – to ensure you get a timely response from us. Until next time!
