This monthly communication, “Financial Bullet Points,” will quickly and easily cover the main financial issues we see affecting the markets without being bogged down with a lot of details.
Written by Bob Barber, Shawn Peters, and Matthew Barrovecchio; Prepared on July 29th, 2024
The Bullet Points for August are:
- Soft Landing and Inflation Outlook: Recent inflation data, coupled with second quarter GDP figures released at the end of July, has investors extremely confident that the Fed could begin lowering rates in the middle of September. This suggests that the possibility of a ‘soft landing’, where the economy brings inflation back under control without also going into a recession, is very much back on the table for the United States. This bodes well across the economy, especially for smaller companies.
- Market Rotation: As expected, in July, the markets began rotating from overvalued technology stocks into other parts of the market. The lower inflation numbers have led to a rotation out of large technology companies, often referred to as the “Sinful Seven”, as investors look for value more broadly. This is a great time to mention our “Narrow Markets Webinar,” which we hosted on the first day this rotation began. We examined how we are navigating these markets and buying great companies that have been overlooked. You can watch the recorded webinar at cfa.lc/web2407.
- Political Uncertainty and Market Implications: The political landscape is fraught with uncertainty, from former President Trump’s assassination attempt to how the Democratic Party nomination will unfold. As of this writing, Kamala Harris has secured enough Democratic delegates support to become the party’s nominee but has yet to be officially confirmed. The handling of these political maneuvers has raised concerns about the democratic process. Such instability can lead to volatility in the markets, particularly concerning potential pullbacks in industrial budgets and national debt. Staying diversified is crucial during these times.
- Sector Investments: Financials and Energy: With the potential for an interest rate cut this year, we are seeing increased investments in the financial sector. Additionally, there is some investing in energy as electric vehicles (EVs) are losing popularity due to power grid demands. Both sectors present unique opportunities in the current economic climate.
- Significance of AI and Diversification: AI remains a significant play as investors view it as a safe investment. Despite the concentration in a few large technology companies, it’s essential to remain cautious and diversify. History has shown that maintaining a diversified portfolio can yield better long-term results, especially when certain sectors or companies fall out of favor.
- Continuing Education and Scriptures. This month’s programs for Christian Financial Perspectives are listed below along with our Scriptures for the month:
- Ep 206 – Investing In Gold – 8/13/2024
- Ep 207 – The Benefits and Risks of Annuities – 8/27/2024
- Proverbs 21:5 – Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.
- Matthew 6:21 – Wherever your treasure is, there the desires of your heart will also be.
Remember, we moved to releasing episodes every other week to give people more time between episodes to listen or watch. To tune in, search “Christian Financial Perspectives” on almost any podcast platform or YouTube.
Visit our channel: www.cfa.lc/yt
Until next time, have a great August and stay informed as we navigate these dynamic times!
If you would like further explanation of any of the bullet points mentioned, please call or text (830) 609-6986 during business hours or email us by clicking here.
Bob Barber, Founder, President, & Senior Wealth Advisor
Shawn Peters, VP & Wealth Advisor
Matthew Barrovecchio, Senior Wealth Advisor
Christian Financial Advisors®