Summer Ends, Volatility Returns
Throughout most of the summer markets were calm, then came August. An interest rate hike by the Bank of Japan coupled with a weaker than expected jobs report in early August led to a broad-based drawdown in equity markets globally. The sell off was short lived as markets quickly reversed over the last several weeks as the Federal Reserve has strongly signaled that easing of interest rates will commence in September after keeping interest rates unchanged for over a year. During Jerome Powell’s speech at Jackson Hole, he left no room for interpretation after saying, “the time has come for policy to adjust.” As we mentioned in our 2nd half outlook for the year, we continue to believe that (i) investors should continue to monitor their overall cash position relative to their short- and long-term goals and (ii) investors will begin to turn from a singular focus on interest rates to examining the underlying economic metrics with an emphasis on the job market. This closer look at the job market was especially front of mind after the Bureau of Labor Statistics’ report found that employment data may have materially overestimated the strength of the job market.
Information in this commentary is gleaned from third-party sources, and while believed to be reliable, is not independently verified. This content is not intended to be tax, legal, investment, or fiduciary advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. Past performance does not guarantee future results.