Spring is here! And with it all of the uncertainty surrounding upcoming April tariffs, possibly-transitory inflation, and daffodils! Yay!
And it wouldn’t be spring without the Federal Reserve’s mid-March meeting, which in this case resulted in NO change to the interest rate charged by the Fed to its most-favored banks (currently 4.25%-4.5%). Short-term rates are established by the Fed’s Open Market Committee (FOMC), while longer-term rates are determined by the market, specifically the auctions at which Treasurys are sold. Year-to-date, the yield on the ten-year Treasury Note has fallen from 4.573% to 4.252%. It’s a decent-sized move over a two and a half month period full of news, speculation, and Elon Musk, and it indicates that investors are anticipating an economic slowdown which will require the Fed to reduce rates further.
February’s retail-sales numbers came in worse than expected, the New York Fed’s Empire State Manufacturing Survey showed business activity dropped significantly in March, and the Federal Reserve Bank of Atlanta revised its estimate for first-quarter GDP to negative 2.1% (down from negative 1.6%). But there was good news, too. Bird flu is waning, there are indications from the White House that looming tariffs may not be as onerous as first announced, and U.S. existing-home sales rose 4.2% in February, higher than expected.
There are nearly 200 law schools in the U.S. Applications for slots in law schools are up over 20% compared to last year. Could it be because thousands of people have been laid off by the government, some of whom have been rehired, others of whom are rehired in theory but not fact, and many of whom have been written off? I can’t say for sure that lawyers have more job security than other careers, but I can say that their student loans are apparently going to be handled by the Small Business Association instead of the Department of Education, and the SBA has no experience in debt collection (SBA loans are administered through banks). Is this a positive or a negative?
For the week, stock markets actually rose, albeit mildly, with the Dow Jones Industrials outpacing the Standard & Poor’s 500 and the Nasdaq Composite. Year-to-date, though, stocks are down. But for the trailing-twelve months, stocks are up. Got all that? Let me reiterate that almost all investors are unsure of what’s coming down the road politically, globally, and in markets, which is why we are recommending that many clients maintain an appropriate cash cushion, bond ladder, and stock allocation. But that might not be right for you, so call your advisor!! (Two exclamation points means I’m serious but not a really enthusiastic tween. Which would require heart-shaped dots of course.)
For the week ending on March 21st, the S&P finished at 5,667, the Nasdaq at 17,784, and the Dow at 41,985. The yield on the ten-year Treasury Note closed at 4.252%. U.S. crude oil cost $68.32 per barrel, N.Y. gold cost $3,022.50 per ounce, and one Euro was worth $1.08.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, Axios, The Economist, CNBC, CNN, Morning Brew, Yahoo Finance, Bloomberg, MarketWatch, The Wall Street Journal, Reuters, 1440 Digest, Business Insider, The New York Times, The Washington Post, and The Associated Press. If you have questions, please call us at 203.458.5220, or reply to this email to reach me, Liz Cook.
Usually when someone is awarded millions of dollars for the hot coffee that spilled on them, I think, “well, maybe you shouldn’t hold a cup of boiling water in your lap.” But the recent case of a $50 million jury settlement to a delivery driver who got boiling coffee POURED ON HIM FROM THE DRIVE-THROUGH WINDOW AT STARBUCKS is different. He had no control over the coffee, it caused serious burns to his groin area, and he’d probably be glad to give the money back if only he could be unharmed again. If he isn’t one of the extra 20% of law school applicants already, he should think about it.