Perspectives

Some cracks are appearing in the U.S. economy. Initial jobless claims with revisions were 228,000 last week. The ISM mfg & svc indices both fell notably in March. The Fed’s H.8 release showed bank loans declining at the end of March. The Dallas Fed reported loan demand was down with contacts noting “waning consumer confidence from recent financial instability as a concern.” The American Banker Association (ABA) indicated tighter credit conditions. We continue to believe the Fed’s Se… View More

U.S. equities were higher for the third week in a row (S&P 500 +3.5%). Headlines were sparse, with lower volatility around banks. Flows to money market accounts eased from the prior two weeks. Best sectors were energy (+6.2%) and consumer discretionary (+5.6%); worst sectors were communication services (+1.5%) and healthcare (+1.8%).   Where Do Earnings Expectations Stand As We Head Into 1Q Earnings Season? With the first quarter earnings season set to begin in a couple of weeks, 2023 EP… View More

The Federal Reserve raised short-term interest rates by another quarter point on Wednesday. That, by itself, was clear, with the Fed now targeting a range for short-term rates between 4.75% and 5.00%. The problem was that the Fed continues to ignore the most important issue in monetary policy. That most important issue is the money supply, which surged by 40% in the first two years of COVID, the fastest since the 1940s, and has since dropped by the most since the Great Depression. You would thi… View More

Has the Bank Crisis Really Been Solved? After conversing with our Chief Economist Don Rissmiller yesterday about the status of the banking system, the question came up about whether the risk of deposit flight still remains. Commercial bank deposits, which yield next to nothing, have fallen by roughly -$571 bn while money market mutual funds, which yield closer to 4%, have taken in +$456 bn since the hiking cycle started. With the ability to move money by the click of a button, the search for de… View More

Source: Bob Doll Crossmark Investments   Sincerely, Fortem Financial(760) 206-8500team@fortemfin.com   … View More

Equities had their worst week since September (S&P 500 -4.6%). All sectors were down with banks the biggest decliners due to the SIVB financial failure. Treasuries rallied across the curve, with two-year yields recording their largest two-day move since 9/11. Best sector performers for the week were consumer staples (-1.9%), utilities (-2.9%), and technology (-3.1%). Worst performers were financials (-8.5%), materials (-7.6%), and REITS (-7.0%).   Chart reflects price changes, not tot… View More

As we are sure you have seen, the FDIC stepped in to take over Silicon Valley Bank (SIVB) over the weekend. First and foremost, we want to assure that your assets at Charles Schwab are safe and secure. To begin, we want to highlight a key difference between investment (brokerage accounts) and bank deposit accounts. Investment accounts are held in trust name for a client’s benefit. The assets are not comingled with the brokerage company’s assets. Because of this, if the brokerage company we… View More

U.S. equities were higher last week (S&P 500 +1.9%) after three weeks of declines. Markets continued to reprice upward Fed rate expectations. Best sectors were materials (+4.0%), communication services (+3.3%) and industrials (+3.3%); worst performers were utilities (-0.7%) and consumer staples (-4.0%). 1. There is clearly not yet enough progress on inflation to satisfy the Fed which means higher risk of ongoing hikes. This factor coupled with declining money supply and the inverted yield c… View More

Dear Clients,   Today is the 1st Annual Coachella Valley Giving Day. CV Giving Day brings the region together as one community, raising money and awareness for local nonprofits in the Coachella Valley. Fortem Financial is a long-time supporter of the local non-profit, Martha's Village & Kitchen, where their mission is transforming lives of the impoverished and homeless. All donations made today up to $20,000.00 will be matched. Visit the Martha's donation page here: CV Giving Day Martha'… View More

"There are two types of economists," said famed economist John Kenneth Galbraith, "those who don't know, and those who don't know they don't know." This, along with movie producer William Goldman's assertion that "nobody knows anything" are two quotes that remind us to be humble when making forecasts about the future path of the economy and the financial markets. To the extent to which economics will always be a social science and never a hard science like, let's say, chemistry, it is incumbent … View More