11/7: Weekly Economic Update from PMG Wealth Mgmt.

November 7, 2022

THE WEEK ON WALL STREET

Hawkish comments by Fed Chair Jerome Powell, following the announcement of another 75 basis points interest rate hike last week, cast a pall over financial markets, sending yields higher and stocks lower.

The Dow Jones Industrial Average slipped 1.40%, while the Standard & Poor’s 500 declined 3.35%. The Nasdaq Composite index lost 5.65% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 1.04%.^1,2,3

POWELL DISAPPOINTS

The official statement released following the Federal Open Market Committee (FOMC) meeting appeared to suggest a potential for future easing of interest rates. Investors cheered the news, sending stocks higher. But the optimism was crushed 30 minutes later on hawkish comments by Fed Chair Powell during his post-meeting press conference.

Losses accelerated into Thursday, led by technology names, which were under pressure due to rising bond yields. The yield on the two-year Treasury note rose to its highest level since 2007. The sentiment took damage from workforce reduction/freeze news from multiple technology companies; some considered it a sign of a pending recession. Stocks managed to erase some of the week’s losses on Friday following a strong employment report and a drop in the U.S. dollar.⁴

FROM DOVE TO HAWK IN 30 MINUTES

In the statement accompanying the 75 basis point rate increase, the FOMC said that future increases would consider the cumulative monetary tightening to date and the lag in impact such tightening involves.⁵

But in his post-meeting press conference, Fed Chair Powell struck a more hawkish tone. He said that current inflation data did not support any slowdown in rate increases and that the terminal rate (the point at which rates will no longer rise) may be higher than initially expected.⁶

THE WEEK AHEAD: KEY ECONOMIC DATA

Thursday: Consumer Price Index (CPI). Jobless Claims.

Friday: Consumer Sentiment.

Source: Econoday, November 4, 2022

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

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THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: The Walt Disney Company (DIS).

Wednesday: Roblox Corporation (RBLX), Occidental Petroleum Corporation (OXY).

Thursday: Becton, Dickinson and Company (BDX).

Source: Zacks, November 4, 2022

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Phil Guerrero, CFP®

President

Wealth Advisor

phil@pmgwealth.com

George Maroudas

Wealth Advisor

george@pmgwealth.com

Terry Maziarka

Client Service Manager

terry@pmgwealth.com

847.550.6100

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WEEKLY QUOTE

"If you would be loved, love and be lovable."

Benjamin Franklin

WEEKLY TIP

The first step to saving money is to figure out where you are spending it. Break down essential and inessential costs in your life.

WEEKLY RIDDLE

Create a 13-letter word using all 13 of the following letters:

O A I I S T T R R D N A M

LAST WEEK'S RIDDLE

What is worn by the foot and often bought by the yard?

ANSWER: Carpet.

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

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CITATIONS:

1. The Wall Street Journal, November 4, 2022

2. The Wall Street Journal, November 4, 2022

3. The Wall Street Journal, November 4, 2022

4. The Wall Street Journal, November 3, 2022

5. The Wall Street Journal, November 2, 2022

6. The Wall Street Journal, November 2, 2022