The Lowry Letter®

Week of 11/8/2023

Retirement Plan contribution limits for 2024 have been increased, though by a smaller percentage than 2023! More on this next week.

Also, this is the final reminder for our “Ask the Joes®” webinar, taking place on Thursday, Nov 9, at 4:30pm EST. Our review of the Secure Act will be led by Sean Durkin from the Capital Group/American Funds. Sean will also provide his firm’s outlook on the markets and economy.

The link for the webinar is here:

https://us02web.zoom.us/j/81914758836?pwd=M2RqR2QwSXhDcjhUTjEzQ0k2ZTNzUT09

Our Monthly Market Recap is here, appropriately titled “Tricks not Treats for Markets in October."

It’s important to remember that most policy decisions, like interest rate changes, take months to affect the financial system. Even though there have been no Federal Reserve rate changes since July, financial conditions have tightened significantly since then. As of October 31, the increase in the Goldman Sachs US Financial Conditions Index* ranked in the 98th percentile relative to all other periods in the last 40 years (Bloomberg).

Auto thefts have declined until a sharp spike in recent years. The curious part is the specific auto makers targeted, Hyundai and Kia, due to specific vulnerabilities. The lesson is that improvements in crime rates are more likely due to better security than “better people.”

What we are reading right now:
Joe Sr: The End of the World is Just the Beginning by Peter Zeihan
Joe Jr: Romney: A Reckoning by McKay Coppins

*The Goldman Sachs US Financial Conditions Index is a weighted average of riskless interest rates, the exchange rate, equity valuations, and credit spreads, with weights that correspond to the direct impact of each variable on GDP. All indices are unmanaged, and investors cannot invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results.

Q: Things seem to have calmed down in the market. Why is that?

A: It’s a mixed bag. We are in one of those bizarre periods when good news is bad and bad news is good. Strong economic growth prompts concerns about continued high inflation and the market responds negatively. Job weakness points to a possible change in Federal Reserve Policy and investors are cheered up. It’s a strange, but not unprecedented environment for long-term investors.

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