As our valued client, you will receive a weekly email from us with commentary from our team members, which sometimes includes reports from others in the industry. We also send our Private Investment Management (PIM) account holders quarterly newsletters on the portfolios and the investment environment.

Here are our team’s thoughts on the latest market commentary, and you can also find an archive of these materials below.
As we are wrapping up the month of April, we have had no shortage of market moving headlines and volatility this year.  Investors are currently dealing with three separate and major events impacting markets – 1) the actions of the Federal Reserve and looming inflation concerns domestically, 2) the crisis in Ukraine and its impact on European markets and 3) ongoing COVID concerns and lockdowns in China impacting global supply chains.  While none of us know the outcome of any of these events, we can expect to see hindered growth in markets. 

The attached report from the Wells Fargo Investment Institute details how inflationary pressures may impact markets. 

Also attached is an invitation for an Investor call where Wells Fargo Investment Institute strategists will provide timely insight following the May 4th Federal Open Market Committee (FOMC) rate announcement.  Many market participants are expecting a potential 0.50% rate hike based on the comments of Fed Chair Powell last week.


The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
While most of the downward movement of both equity and fixed income markets this year has been focused on the actions of the Federal Reserve, geo-political tensions quickly evolved over the last week. While we typically see an inverse relationship between the price of stocks and bonds, the expectation of an interest rate increase, has caused bond prices to fall alongside equities.  Interest rates and bond prices have an inverse relationship.  As with any type of uncertainty, market volatility has been heightened. 

With events unfolding in Ukraine, it appears U.S. fixed income is benefiting from the expected “flight to safety” shift from investors, despite the impending interest rate increase.  The next Federal Reserve meeting is scheduled to take place in mid-March.  The outcome of this meeting, should hopefully, provide some insight into the path ahead for expected rate hikes which may offer some much-needed footing for markets.

The attached report from the Wells Fargo Investment Institute covers how the events in Ukraine may impact markets.


The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

Investments in fixed-income securities are subject to market, interest rate, credit and other risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can cause a bond’s price to fall. Credit risk is the risk that an issuer will default on payments of interest and/or principal. This risk is heightened in lower rated bonds. If sold prior to maturity, fixed income securities are subject to market risk. All fixed income investments may be worth less than their original cost upon redemption or maturity.



 
Markets seemed to begin stabilizing over the last week or so.  However, disappointing earnings reports from some major technology companies have caused a negative reaction in markets.  In addition, the Bank of England decided to raise interest rates Thursday morning, with the European Central Bank likely moving in the same direction.  It appears that we are in the beginning of a coordinated global tightening.  Given the expectation that the Federal Reserve will raise the Fed Funds rate in March, in my opinion, investors should not be surprised by the actions of other global banks.

Beginning this month, we will no longer be sending a weekly commentary.  Rather, we will send a commentary when we feel there is a newsworthy event.  This should help to cut down on the number of emails received and make the communication more meaningful.  Please feel free to reach out with any questions.

The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes.
As investors remain cautious on the Federal Reserve’s policy changes, we have seen heightened levels of market volatility over the last week or so, as geopolitical tensions have added to concerns. We expect the Federal Reserve to begin raising the federal funds rate early to mid-year. This move signals the possible end of the early growth portion of the business cycle as the Fed makes these moves in-part to combat inflation.

These upcoming changes in policy will likely have short to mid-term impacts on equity markets. For a look at how the S&P 500 index has historically performed before and after rate hikes, please see the attached report provided by the Wells Fargo Investment Institute.

The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes. Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.