After dropping the benchmark federal funds rate to a rock-bottom range of 0%–0.25% early in the pandemic, the Federal Open Market Committee has begun raising the rate toward more typical historical levels in response to high inflation. At its March 2022 meeting, the Committee raised the funds rate to 0.25%–0.50% and projected the equivalent of six more quarter-percentage-point increases in 2022 and three or four more in 2023.
Many factors go into decisions on buying or selling shares of a particular stock, but the price/earnings (P/E) ratio can be a helpful starting point for evaluating whether a company’s stock is under- or overpriced. The P/E ratio is calculated by dividing a stock’s current price per share by the company’s earnings per share over a 12-month period. This ratio quantifies what investors may be willing to pay for one dollar of earnings.
After losing ground in 2018, U.S. stocks had a banner year in 2019, with the S&P 500 gaining almost 29% — the highest annual increase since 2013.1 It’s too early to know how 2020 will turn out, but it’s been rocky so far, and you can count on market swings to challenge your patience as an investor.
Recently, Laurie Fried and Jeanie Schwarz (Principals at Lumina Financial Consultants) appeared on Parlay From Away: A Digital Conversation Series. We walked through taking control of our financial wellness as women and discussed best practices for coping with economic uncertainty. If you weren’t able to experience this illuminating event with us, please enjoy the recorded conversation.
When it comes to your finances, “go with your gut” might not be the wisest adage to follow. In fact, it may work against you, particularly in periods of market turbulence. Before jumping to conclusions about your finances, consider what biases may be at work beneath your conscious radar.
Markets were mixed on the week, as the large- cap U.S. market indices snapped their two-week winning streak and ended lower while the smaller- caps ended higher
Besides the ever-present COVID-19 concerns, the week was dominated by the negative price of oil, a busy corporate earnings week and stimulus3.5 from the federal government
The DJIA dropped 1.9% on the week, followed closely behind by the S&P 500’s 1.3% loss, NASDAQ’s small 0.2% decline and the smaller- cap Russell 2000’s 0.3% gain
On Monday, the price of a barrel of WTI crude to be delivered in May settled at -$37.60 per barrel, the first time in history that it has closed in negative territory
As the week progressed, WTI crude futures rallied, with the June WTI contract ultimately ending the week north of $17/barrel
Despite the extreme volatility in oil, the Energy sector was the only S&P 500 sector to see gains, as it jumped 1.7% on the week
The Real Estate (-4.4%) and Utilities (-3.8%) sectors fared the worst on the week
Weekly initial claims for the week ending April 18 decreased by 810,000 to 4.4 million
Holding an appropriate amount of cash in a portfolio can be the financial equivalent of taking deep breaths to relax. It could enhance your ability to make thoughtful investment decisions instead of impulsive ones.
Eye on the Week Ahead
This week, inflationary measures are in the news with reports on the costs of consumer goods and services in September. In August, both consumer prices and producer prices increased a scant 0.1%, respectively. For the year, the Consumer Price Index is up 1.7% — well below the Fed’s target of 2.0%.
Each year for its Retirement Confidence Survey, the Employee Benefit Research Institute (EBRI) surveys 1,000 workers and 1,000 retirees to assess how confident they are in their ability to afford a comfortable retirement. Once again, in 2019, retirees expressed stronger confidence than workers:
Almost 100 million Americans, representing about 44% of U.S. households, owned mutual funds in 2018. Saving for retirement was the primary goal for 73% of investors; other goals included saving for college or a house, building an emergency fund, or providing current income.