The theme of this edition of Risks and Opportunities is “Obstacles” – an acknowledgment of the many challenges that hinder a return to normal for economies and financial markets around the world. The subject of the report is the second quarter, which saw significant downturns in the stock and bond markets. However, in the opening of this edition, we reiterate a healthy longer-term view of the economy and financial markets in 2024, which more recent data support.
On a positive note, already in the third quarter, we are seeing the beginnings of recovery as the world gets used to some of the shocks of the first half of 2022, and others begin to subside. The much-awaited CPI number released this week showed that inflation is easing, coming in at only 8.5%. In July the Fed announced another rate hike of 0.75% - which both the bond and stock markets responded to favorably. The European Central Bank also raised rates for the first time in 11 years, though that increase just lifted their rates from -0.50% to 0%. EU officials also announced a deal to reduce natural gas consumption to battle its ongoing energy consumption issues with Russia, and the first grain ship left Ukraine since the invasion by Russia.
Our market report covers topics from the idea of a “jobful” recession to the problems that our collective consumer behavior is causing throughout the world economy, and why high-quality companies have performed better than high-growth companies this year. Read Risks and Opportunities here.
Debra Brennan Tagg is a CERTIFIED FINANCIAL PLANNER™ Professional and the creator of the DBT360 Financial Plan, a proprietary program that helps her clients prioritize their goals, leverage their resources, and address their risks. She is the president of BFS Advisory Group and teaches the public and the financial services industry about the importance of values-based financial planning and investor education.