Extended Rate Pause
- Federal Reserve officials were unwilling to conclude they were done raising interest rates when they decided earlier this month to extend a pause in rate increases but minutes of their most recent policy meeting suggested they might be comfortable holding rates steady for at least the rest of the year. – WSJ
- The “Magnificent 7” is up over 70% this year and accounts for 94% of S&P 500 YTD returns. The sudden progression of AI into mainstream culture has not only inspired consumer excitement about the sophistication of AI technologies but also sharpened investment focus, with over 35% of S&P 500 companies mentioning AI in 3Q23 earnings transcripts and global private investment projected to reach $200bn by next year. AI should remain investable for the long haul, with the rapidly developing AI industry suggesting opportunities will broaden beyond the top 7 stocks. For investors wary of overextended markets, there are plenty of stocks that haven’t seen the same run-up in valuations this year, with the remaining S&P 500 only up 3.5% YTD. – JP Morgan
- After 11 consecutive interest rate increases since March 2022, the central bank has kept its benchmark interest rate steady at a 22-year high of 5.25-5.50% since July. The dollar hit a three-month low recently and longer-term rates have rallied as investors grow increasingly confident that the US Federal Reserve will start cutting interest rates by mid-2024. – Financial Times
Information in this commentary is gleaned from third party sources, and while believed to be reliable, is not independently verified. This content is not intended to be tax, legal, investment or fiduciary advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. Past performance does not guarantee future results.