Welcome to our June 2023 Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends. Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth. Feel free to share with others.
Leading Economic Indicators
The year over year change to the ten Leading Economic Indicators [LEI] continues to decline, resulting in a negative change over the last nine months. As State Street points out in their Midyear Market Outlook, “negative readings have coincided with every US recession except 1960. Only the recessions of 1975 and 2009 were preceded by more consecutive months of negative year over year changes.
“So while the LEI’s current change of -7.8% is not as weak as historical cycles, the duration of negative readings is significant.”
Mortgages and Car Loan Rates
Despite a recent pause to the Fed’s rate hiking cycle, 30-year fixed mortgage rates and 48-month new car loans have remained high. And in Fed Chair Jerome Powell’s testimony today, he said all FOMC members expect interest rates to be higher still by the end of the year. That certainly won’t help curtail the highest loan rates we’ve seen since around 2002. The average 48-month loan rate for new cars is sitting up near 7% while fixed 30-year mortgages remain hovering around 6.80%.
The S&P 500 Enters A New Bull Market
With special thanks to the tech sector, the S&P 500 ended the longest bear market since the 1940s with the beginnings of a new bull market. The comments from Jerome Powell today are causing investors to react negatively, but the bull market is still here. This stock rally has been very narrow; only a handful of the largest, more tech focused stocks, are the primary contributors. The top 5 stocks in the S&P have returned 56.2%, helping propel the index to the new bull market territory.
Lou Gehrig Day
On June 2nd, Lou Gehrig day was celebrated in MLB ballparks to help spread awareness and raise funds for people living with ALS and their families. Gehrig passed away from the incurable disease on June 2nd, 1941. Most people remember him for the incredible speech he made. “I consider myself the luckiest man on the face of the earth.” This year, we had the opportunity to meet Sarah Langs, a 30 year old writer and researcher for MLB.com and frequent guest on Buster Olney’s Baseball Tonight podcast. Sarah was diagnosed with ALS in 2021, but it hasn’t stopped her love for baseball. Since she made her diagnoses public, she says she has been, “overwhelmed by the kindness of others” in a good way. Reflecting on Gehrig’s speech at Yankee stadium and her own experiences, Sarah thinks “everyone should be overwhelmed.”
“I always find myself hoping that people knew how much they were loved. We should be telling people who aren’t dying how much we appreciate them. We should be approaching each day with that mindset. I appreciate every single word, every single punctuation mark from every single person, but everyone deserves to know how appreciated and loved they are. I look at people who are healthy and fine, and they’re just as appreciated, but no one’s telling them.”
Click here to watch an Outside the Lines video get to know more about the incomparable Sarah Langs.
Baseball is the best.
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