Going back to 1980 the market has fallen by 10% or more 36 times. That amounts to nearly once a year. Last year was really the anomaly while this year is more of the norm. For the first time in over a decade, the cost of capital is being driven by the markets as opposed to central banks. As we see interest rates move up outside of the central banks’ control, we could see this lead to choppier markets. This feels like a transitional period. On average, barring a recession, we often see these pullbacks that ultimately lead to the market going back up.
Retail Sales & Inflation
Wednesday is a big day for retail sales reporting. Retail sales were up 5% in November and December. That’s an important factor considering consumer spending makes up 70% of our economy. Another big piece of data that will come out Wednesday is inflation numbers. Inflation has caused the markets to wobble a little bit lately. Higher inflation usually means higher rates. The 10-year treasury is already at a 4 year high. If the inflation number is high, it could add to the volatility we have been experiencing lately.
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
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