May 30, 2023
Posted on May 30, 2023
Planning and Guidance, Tailored To Your Life and Goals
Posted on March 17, 2015
<![CDATA[Franklin D. Roosevelt’s first inaugural address was delivered in 1933 in the midst of the Great Depression. He said, “This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Last week, some were speculating fear and uncertainty were behind U.S. stock market performance. The root of the problem was the word ‘patient,’ which Barron’s reported is likely to be removed from the Federal Open Market Committee’s statement this week, paving the way for an increase in interest rates. The publication cautioned that investors may throw a tightening tantrum and:
“That could make 2015 look a lot like 2013, the year of the so-called taper tantrum. Remember when Ben Bernanke first mooted the possibility that the Fed would curtail its bond purchases in testimony to Congress on May 22, 2013? The markets reacted with, well, horror. The S&P 500 fell 5 percent in just over a month of trading. Tapering itself, however, went off without a hitch; the S&P gained 9.1 percent from December 2013 to October 2014 as the Fed slowly cut its bond purchases.”Continued strengthening of the U.S. dollar also affected markets last week. Reuters reported stock prices fell, in part, because of concerns about corporate profitability in the face of a stronger dollar. Sources cited by Barron’s pointed out, in the long run, a strong dollar is better for American companies. After all, a strong dollar increases the buying power of consumers and companies. However, investors currently seem to be focused on short-term consequences rather than long-term results.