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Market Commentary

Stocks go up, stocks go down. Interest rates change, housing trends ebb and flow. How do you keep up with the markets and economy? Vizo Financial offers weekly and monthly market commentaries to keep your credit union apprised of the current economic and market trends. Read the latest now!

January Monthly Market Commentary

Economy Faces a Winter Chill

A winter economic soft patch has begun, as spiking Omicron cases exacerbate supply chain and labor market stress and fuel greater consumer and business caution. But while the virus continues to be in the driver’s seat of the recovery, the early 2022 economic cool down won’t result in a deep freeze. Activity should rebound in the spring if health officials are correct and Covid case rates fall, allowing consumers to feel more comfortable to go out and spend. 2022 is still poised to be a solid year for the U.S. economy but there’s likely to be potholes along the way.

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December Monthly Market Commentary

Virus Fears and Inflation Cast a Shadow Over 2022

It may not feel like it given the resurgence in Covid health concerns, elevated inflation and heightened financial market volatility, but the U.S. economy is doing quite well heading into the new year. Unemployment is falling rapidly, people are shopping freely, household balance sheets are solid and businesses are enjoying record profits. The recovery from the 2020 pandemic recession, the deepest – although shortest – since the Great Depression, has been swifter and stronger than any of the previous postwar upturns.

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Weekly Market Commentary

January 24, 2022

While the economy may be going through a soft patch, the stock market is enduring more of a rough patch, with the S&P 500 index tumbling nearly eight percent so far this year, and the tech-laden Nasdaq composite index already in correction territory, having fallen by more than 10 percent from its November high. It’s always a fool’s errand to try explaining why stock prices move one way or the other, particularly over short time periods. For sure, there are occasions when the catalyst is obvious, such as an external shock that heightens investor anxiety and drives them into safe-haven assets, with Treasury securities the usual landing place. The shock of Covid-19 certainly fits that bill and the recurrent waves of the virus clearly had a disruptive influence on the market over the past two years.

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January 18, 2022

Inflation continues to dominate the headlines, overshadowing mounting geopolitical tensions, disturbing health news, ongoing dysfunction on Capitol Hill, growing odds of steeper rate hikes and even the NFL playoffs that began over the weekend. Unlike the weather, however, those in charge are not just talking about it, but are poised to do something about it. In particular, Federal Reserve officials are all on the same page, something that’s not always been the case in recent years. No longer are some policymakers more concerned about an incomplete jobs recovery at the expense of elevated inflation that, until recently, was considered transitory and primed to recede along with pandemic-related disruptions that were thought to underpin it. As articulated by Chair Powell at his Senate confirmation hearings this week, taming inflation is, in fact, an essential step needed to extend the life of the expansion and keep the job-creating engine firing on all cylinders.

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January 10, 2022

As the curtain rises on the new year, it’s notable that 2022 is the year of the tiger, an animal known for its assertive, unpredictable and energetic qualities. Barely a week in and these attributes are already dominating the news cycle and roiling the financial markets. To be sure, 2021 was the year of the ox, a lumbering creature that hardly reflects the swirl of rapid-fire events that unfolded during the year. It may yet turn out that the Fed in cohorts with health professionals will tame the tiger, allowing a more tranquil economic environment to unfold over the course of the year.

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December 27, 2021

The financial markets are ending the year on a roller coaster ride, and the road ahead is not likely to get much smoother. After shedding about three percent early in the week, as health, inflation and policy concerns raised the anxiety level among investors, stocks came roaring back later in the period, with the S&P 500 index racing to a new record high at the end of the week. Meanwhile, interest rates stayed on the path in effect since the Fed announced its pivot to a more hawkish policy last week, with short-term yields sustaining an upward move against a mostly stable bond yield, resulting in a flattening yield curve. At 0.70 percent, the 2-year Treasury yield is the highest since February 2020, while the 10-year yield, at 1.49 percent, is virtually unchanged from its June level.

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December 20, 2021

Anyone who has followed the financial markets for a time knows that they often behave like children, reacting churlishly when they don’t get what they want and giddy with joy when they do. This week was a prime example of the latter, as the Federal Reserve delivered what it promised and investors’ initial reaction was one of unbridled joy. On Wednesday, stock prices surged following the Fed’s much-anticipated announcement that it will speed up the pace it plans to withdraw support for the economy. The decision at the two-day policy setting meeting was amply telegraphed in advance by Chair Powell and a host of other Fed officials who understandably have become alarmed by the speed, breadth and persistence of an inflation upsurge that is no longer viewed as transitory.

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December 13, 2021

In the 1970s, economist Arthur Okun created the so-called “misery index,” designed to track the mindset of a nation that, during the 1970s, was buffeted by high levels of inflation and unemployment, a confluence of events that economists summarily labeled stagflation. Not taking sides as to whether inflation or unemployment was the more important battering ram on public sentiment, Okun just added them together to devise the index. The higher it went, the more miserable people felt, regardless of the cause, and vice versa when the index declined, pulled down by either lower unemployment or inflation – or better still, both.

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December 6, 2021

The "Great Resignation Wave" is recruiting another participant with the likely early retirement of the Federal Reserve's massive bond-buying program. To be sure, like aging boomers accelerating their journey to the golden years, there's always the chance of running into a roadblock that prompts a reversal of course. In the case of boomers, it could be a case of running out of money or simply boredom. With the Fed's journey, it's more likely that it will hit a fork in the road rather than a roadblock, split by the emerging Omicron variant. One way leads to higher inflation, which would pave the way for a faster journey. The other leads to higher unemployment and slower growth, which could prompt a reconsideration of the pace of advance.

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