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O'Hare Wealth Management | Mequon, WI

6/5/24 Weekly Market Comments

This Week’s “Noise”

Lots of data recently; In short, the slowing growth projections for GDP seem to be coming to fruition. Atlanta Fed real time GDPNow index was revised from 2.7% down to 1.8%. Any notion of rate increases with these headlines is quickly fading. As a response, the 10yr Treasury dropped from the peaks just a few weeks ago.


Other notable data points:

  • May ISM Manufacturing printed at 48.7 or below 49.7. April’s number was 49.2; this shows signs by the business community of the sluggish growth many have been expecting for some time.
  • Additionally, the Price Paid index ticked lower. New orders were also down to 45.4 from the previous 49.1.
  • Employment Index rose to 51.1 (up from 48.6).
  • The Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation measure, came out last week showing negative real personal income and consumer spending, but in line with expectations.
  • Job Openings and Labor Turnover Survey (JOLTS) came in below consensus.
  • ISM Services index surprised on the upside with 53.8 of estimates of 50.8.
  • Non-Farm payroll numbers to be released Friday.
  • ADP Payroll came in below consensus with 152k versus expectation of 172k.

(Source: FactSet)


Another reminder: As humans we are terrible at conceptualizing the rate of inflation. Typically, we remember the hard cost of XYZ good and not how much the cost has risen in a given time frame. This sort of direct comparison doesn’t bode well for intuitively evaluating a slowing rate of inflation.



Current Market Outlook (6 to 12 months)


We are near half time for ’24; so far the market has risen from overly negative sentiment in ’23 and good earning numbers in the first 2 quarters. Based on expectations, if the Price to Earnings ratio (P/E) holds steady the market has already priced in growth at a slower pace than last year, but still ultimately higher earnings per share. We may have gotten much of the upward move for the year in already with the next few months either churning sideways or a series of pullbacks that then return similar levels.



Retailers have begun to cut prices on certain items (Target, McDonald’s, Aldi, Walmart to name a few). Personal Consumption Expenditures Price Index (PCE) didn’t just come down for April, the report also revised the Core PCE number for Q1 down as well. When the U.S. grew last year it did so at a break neck speed; our earlier predictions about slower than trend growth and a return to low single digit U.S. GDP growth seem to be in line with data YTD.


The POTUS election in November is still anyone’s guess; commentary and handwringing will likely begin to increase over the summer. It’s always difficult but as we’ve discussed before, people’s view of the economy and the market change when “their team” is holding office. That is, however, only a perception. The reality is any POTUS may try to use policy to drive certain economic activity, but the real impact comes from the individuals in this world engaging in commerce.



Long-Term View (4 to 7 years)

Long term we believe the US economy will continue to outperform other world economies. This is supported by combination of re-shoring manufacturing, new investments resulting from the Inflation Reduction Act, US energy independence, and higher productivity due to the implementation of Artificial Intelligence (AI) software/systems.


We started 2023 predicting the broad stock market would return to the old highs in one to two years. It took only one year.  We believe the US stock market should be 40% to 60% higher by the end of 2028. A S&P 500 index of 7,000 to 8,000 appears possible. 


Bonds have re-emerged as an important part of asset allocation as yields have risen. We expect a diversified bond portfolio to produce returns 3% to 5% above inflation for the next 5 to 7 years.



"The desire to perform all the time is usually a barrier to performing over time."

-Robert Olstein




See important disclosures below:

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Any opinions are those of John O’Hare II and not necessarily those of Steward Partners. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.

Asset Allocation and diversification do not assure a profit or protect against loss in declining financial markets. 

Bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally, the longer a bond's maturity, the more sensitive it is to this risk. Bonds may also be subject to call risk, which is the risk that the issuer will redeem the debt at its option, fully or partially, before the scheduled maturity date. The market value of debt instruments may fluctuate and proceeds from sales prior to maturity may be more or less than the amount originally invested or the maturity value due to changes in market conditions or changes in the credit quality of the issuer. Bonds are subject to the credit risk of the issuer. This is the risk that the issuer might be unable to make interest and/or principal payments on a timely basis. Bonds are also subject to reinvestment risk, which is the risk that principal and/or interest payments from a given investment may be reinvested at a lower interest rate.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, registered broker/dealer, member FINRA/SIPC, and SEC registered investment adviser.?? Investment Advisory Services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment adviser.?? Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC are affiliates and separately operated. OHare Wealth Management is a team at Steward Partners. O’Hare Wealth Management is independently owned and operated.?  


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