In today’s Steady Investor, we look at what is going on in the markets and our key takeaways and questions for investors to consider, such as:
U.S. Factory Activity Eases in September – In Zacks’s view, we’re at a point in the cycle where “bad news is good news,” since weak economic data could signal a coming peak for the Federal Reserve’s rate hike campaign. Manufacturing data for September gave one such sign, as growth in the sector slowed to its lowest pace in two years. The Institute for Supply Management reported last week that U.S. factory activity fell to 50.9 in September from 52.8 in August, which is the lowest level since May 2020 – when the economy was effectively shut down due to Covid-19. New orders, exports, and employment (hiring) all fell in the month as well, which may reflect some success in the Fed’s efforts to reduce demand in the economy. Less activity and weaker demand have helped ease price pressures, with the ISM’s prices index falling to June 2020 levels. The Fed assuredly takes note of this type of data when making policy decisions, which directionally should be seen as a positive.1
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Inflation continues to stay persistent in the market, causing many investors to worry about how it may affect their investment portfolios.
It’s impossible to predict sudden market changes and how the future will pan out, but you can try to prepare for what’s to come. Knowing your net worth is a great place to start as it is critical to your financial well-being and can help you prepare for what’s ahead in the future.
If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Evaluating Your Net Worth.2 Simply click on the link below to get your copy today!
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When is the Best Time to Purchase Tickets for Holiday Travel? According to analysts and fare-trackers, “now.” Airline and travel prices are already elevated due to soaring post-pandemic demand, rising price of jet fuel, and other inflationary forces. But these price pressures have been boosted even further by airlines’ efforts to manage schedules and capacity, which is to say, reducing the number of flights in an effort to better serve customers (and perhaps charge higher prices). Prices for travel over Thanksgiving and Christmas are already substantially higher than they were last year. For domestic travel during the week of Thanksgiving, the average airfare costs $468, which is 48% higher than Thanksgiving 2021. For Christmas, the figure is even higher, at $574 or 52% higher than last year. Prices tend to fluctuate, but travelers should remember that average prices go up as you get closer to your travel date. That leaves little wiggle room for this year’s holiday season.3
Weaker Data in the U.S. Labor Market Could be Good for Inflation and the Fed – One of the thorns in the Fed’s side in 2022 has been persistent job growth and abundant job openings in the U.S. economy, which has resulted in above-average wage gains (which is inflationary). The Fed has indicated that higher levels of unemployment may be necessary to ease these pressures, but there is one alternative that may be more conducive to a ‘soft economic landing’—fewer job openings. In an optimistic scenario, the Fed could theoretically achieve ease wage pressures by reducing the number of job openings instead of slowing the economy to the point of triggering layoffs. At present, there are 10.1 million job openings in the U.S. compared to just over 6 million unemployed Americans looking for work, which marks an “improvement” in August when there were 11.2 million jobs available. This decline came as job growth in August eased from 526,000 in July to 315,000, which while still very strong at least marks a softening in labor market activity. Should these trends continue, wage pressures could ease which could in turn take some pressure off the Fed.4
More Positive Developments in the Inflation Fight – Another factor working in the Fed’s favor is the strong U.S. dollar. The ICE U.S. Dollar Index, which tracks the performance of the dollar against a basket of foreign currencies, has surged over +15% year-to-date through September 30. The dollar has notably reached parity with the euro for the first time since 2002, and has also risen to multidecade highs against the British pound and Japanese yen. Since a strong U.S. dollar lowers the price of imported goods and services while also curbing demand for U.S. exports (and thus potentially slowing economic growth), it can help ease price pressures. There are also less-discussed positive developments in the inflation picture. Rents are falling month-over-month in many major markets, commodities are at a seven-month low and trading far from peaks, retail inventories are soaring, container freight rates are falling sharply, and the U.S. ISM Manufacturing Prices Paid Index is currently at 51.70—down -36.33% from a year ago.5
The Importance in Knowing Your Net Worth – While we may not know how the market will be affected long-term, knowing your net worth can be critical to your financial well-being and can help you prepare for what’s ahead.
Calculating your net worth may give you a better idea of where you stand in terms of your long-term investment goals. If you do not currently know your net worth, then now may be a great time to calculate it.
If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Evaluating Your Net Worth.6 Simply click on the link below to get your copy today!
Disclosure