Anyone hoping for excitement from today’s Fed statement was severely disappointed. As expected, the federal funds rate was lifted 25 basis points (bps) from a range of 5.25 to 5.50%. With the exception of the rate hike and slight wording changes – the “modest” pace of economic growth strengthened slightly to “moderate” – today’s statement was a virtual carbon copy of the mid-June release. It's worth noting that, while the Fed did not release new economic forecasts today, the eco… View More
July 2023
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No one should be popping champagne when they see Thursday’s GDP report. The good news is that it won’t be negative. The bad news is that even if it hits our estimate of 2.1% this is a far cry from the robust growth of the economic expansions in the 1980s and 1990s. The US is in desperate need of policies that raise the long-term growth of the US economy, policies that encourage more capital formation, better education, and making it easier to raise the next generation. In the meantime, we … View More
U.S. equities were higher last week (S&P 500 +2.4%) more than erasing the prior week’s declines. The small-cap R2000 increased 3.6%. The main focus for the week was the June CPI report, which came in softer than consensus on both the headline and core readings. Best sectors were communication services (+3.4%) and consumer discretionary (+3.3%); worst sectors were energy (+0.6%) and consumer staples (+1.2%). Source: Bob Doll, Crossmark Investments Chart reflects price changes,… View More
Expectations for 2024 S&P 500 operating earnings have fallen from $253 at the start of the year to $246 today. While this is only a modest decline, it means that the S&P 500’s entire +14.6% price gain year-to-date has been due to multiple expansion. This may have been easier to understand when 10-year Treasury yields plumbed their 2023 depths of roughly 3.3% in early April, but it is harder to justify now as the 10-year broke decidedly above 4% last week. A combination of slower expect… View More