Hello, my name is Chad Taylor, managing partner with MDT Financial Advisors here in Houston, Texas. Today is Monday, April the 22nd, 2024, and I hope all is going well with you. I wanted to get on today and kind of talk about what's been going on here in the markets the last month. It's back to being a little rough. It had been in 2022 and most of 2023. We'd had a number of months in a row at the end of 2023 up until the end of March of this year, but it's been challenging again, and so I wanted to go over some of those things, what's been going on, what we're seeing right now. And as always, anytime we send out one of these videos or anytime that you're thinking about it, we're always here for questions. We're always here to talk, and so please never hesitate to reach out and talk to us if there's something that's on your mind. Some of the main issues that's been going on here in the month of April have to do with inflation and the Federal Reserve and interest rates. Kind of the same thing that's been going on since the beginning of 2022.

The Fed has raised rates quickly during 2022 and 2023, and there was some thought that here in 2024, early 2024, that's kind of what the thinking was at the end of last year, that the Fed would start lowering rates. Well, inflation came in a little higher than what was anticipated. It's become what's called sticky, so it's not getting down to the fed's target range. When that happens, it leads the markets and people to speculate that maybe the fed's not going to lower rates. They didn't do it in March. There was some thought that it could possibly be lowered in March. They didn't, and now they've started talking a little more hawkish, meaning they may not lower the rates as much as what was originally thought. Now, some of the Fed speak, as we talked about, came from Chairman Jerome Powell, and one of the quotes that came out of it was he'd said, lack of further progress so far this year in returning to our 2% inflation goal.

So haven't, it's not progressing like they want. And he said that basically they're trying to get to that 2% range and they just don't have the confidence it's getting there quite yet. And the last thing they want to do is lower rates and then have to turn right around and start raising 'em again if inflation goes back up. And in fact, our Wells Fargo Investment Institute is now saying that they project us to have three rate cuts this year versus two excuse rate cuts this year versus three that they were saying earlier in the year. And so all of those uncertainties lead to market volatility, especially when we've had a number of months in a row that the markets were up. So kind of giving some of it back, going down a little bit, it probably isn't something that's out of the ordinary. In fact, I always kind of go back and look, usually every year we have roughly a 10% pullback in the stock markets.

Is that what we're doing here now that's yet to be seen? Is it just kind of a normal breather or is it a reason for the markets to be worse longer term yet to be seen? But you've seen stocks give back some of their gains this month. Bonds have given back some of their gains as well because interest rates have kind of inched their way back up again. And so you've kind of had just a reset from where we were even at the end of March. Now, last week you had the stock market specifically dip again during the week. Some days it was kind of interesting that s and p 500 and the NASDAQ were down while the Dow Jones Industrial average was up. But for the most part, it was a down week, mainly because of hawkish speak by some of the Fed members hotter than expected retail sales numbers.

So retail sales were more than what they anticipated. All the geopolitical uncertainty, whether it's the Middle East or Russia, Ukraine, then it was the start of earnings seasons. Now all the corporate earnings are starting to come out. There was a lot going on last week. There's a lot going on this week, and all of those things will play into the market Right now. It just seems a little jittery. So anytime news is coming out, it's reacting to it a little more than it had been in early part of this year or November December of last year. We talk about the Fed and interest rates and inflation and what they've been doing to the market, and that's been the biggest drivers of what we've been experiencing the last couple of years investment. The Wells Fargo Investment Institute did come out last week, and I thought this was encouraging news for the most part, although depending on how you look at it, good news is bad news and bad news is good news, it seems like in the markets right now.

But we came out and we raised our end of the year target on the US GDP. We had it at 1.3% for 2024 and raised it to 2.5%. That to me is probably a good sign. May not be a good sign for lowering interest rates, but in general, we're thinking the economy is holding up right now. We increased though the inflation rate that we thought it would be at the end of this year as well. I think you're kind of see those go hand in hand a little bit right now where we were saying we thought the inflation rate would be around 2.8%. Now we're saying 3% on the nose there. Again, those are all the things that are playing out live every day with the markets. And we did raise our price targets on the stock market as well slightly, but they did raise those as well again.

So there are some good things going on right now, and that's what always makes up the market. Every day we go through the first three months of the year and everything's kind of a little more quiet. It's not so volatile, it makes it feel a little better. Then we get into April and it gets volatile again. And that makes it painful, especially after 2022 and 10 months of 2023 when the markets didn't help us much at all. And so you get this level of volatility and it does start to bother you. So you wouldn't be human if it didn't bother you a bit. And so as we always say, after listening to this or reading something or seeing something, let's take a step back and look at your plan. A lot of times when we look at your plan, we're still on track. Everything is just volatile in the markets right now and it's painful, but we're still on track to meet our goals, which usually is the most important thing. And so when you're watching this, if you do want to revisit your plan, let us know and we can set up a time and do a strategy and review meeting. As always, we're here to help. We're here to talk. If you have questions, please let us know. I hope you have a great day. Thank you.


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