Hello, and welcome to our market alert video for today, which is November 10, 2023. Thank you for watching. And this last week was kind of interesting, we had a development that was kind of scary, actually. So I want to dive into that. First of all, on Thursday, we had the news overall is essentially the same. The debate as to whether the Fed is going to raise interest rates in December continues, are they at the end of the interest rate raising cycle that continues, will inflation come down into next year, that whole debate continues. Our view is that inflation will probably bottom out next year around 3%. So the Fed’s job will not be done. So therefore, we don’t think they’ll be reducing interest rates next year. However, we do think that the majority of the rate increases that the Fed is going to have to make is are behind us. And so therefore, in December, we give it a 5050 Toss up as to whether the Fed will raise interest rates or not. But most importantly, is going to be what Jerome Powell tells us, the Federal Reserve thinks is going to happen. And so I’m going to get more into that here in just a moment. But speaking of Jerome Powell, on Thursday, yesterday, he came out and basically reiterated that the Federal Reserve will do whatever it takes to get inflation down, read my lips, kids, if we have to raise interest rates, some more, we will Don’t kid yourselves, he’s trying to set the market up for, you know, not getting overly optimistic. And of course, that was not well received, which is part of the reason why the market was down yesterday. But there’s another reason which you may not have heard about, which is kind of scary. And that is that one of the main yesterday was a big day for our government, we sell our treasuries our bonds to the open market or run investors around the world buy our treasuries. And that’s how we finance our debt and our deficits and all that we need to borrow more money. And that’s what’s when they issue bonds, and people buy them, essentially, we lent we borrowed more money from people who had lent it to us. And so normally we sell out, it’s not a big deal. Well, the selling was not going as people had thought that it would. So that was kind of scary. Because Wait a second, everybody loves us, they always want to finance our debt, they want us to. They want to pay for us to have all the stuff we have, and we go more in debt and more debt, they want that they like it. But they weren’t buying. And so it’s kind of scary, because Whoa, maybe we won’t be able to finance the debt, that would be bad. Well, the reason behind it was that the biggest bank in China, and maybe the biggest bank in the world, when it comes to how much money they have in their bank was hacked. And by ransomware people who essentially took over their trading desk, so they couldn’t trade. And so what happened was they couldn’t buy treasuries. And they’re one of the biggest buyers of our treasuries that there is. And so because they were unable to buy, because they were being held for ransom, that we didn’t see that and that kind of scared the market. So the combination of those two made the market go down quite a bit yesterday. Today, it’s been resolved. So therefore, the market went back up again, as we saw. So it’s kind of scary from the standpoint that the biggest bank in the world could be held for ransom. That’s, that’s apparently by a Russian hacking criminal organization. So we’ll see where that takes us. Anyhow, that’s what happened this week. Overall, though, the market, the S&P, our stock portfolio was up nicely this week, again, following up on last week when it was up nicely, that that week. So I’m going to say I’m going to give ourselves credit for not panicking and not selling into that correction and holding the course and trusting our strategy. So that was a good thing. We continue to not be in bonds, and bonds this week, were essentially flat. So they continue to be down significantly from their peak. And so being out of bonds continues to be a good thing. So I’ll take credit, we’ll take credit for that one too your investment oversight committee at work. Now, we are looking in about five weeks on December 13, the Federal Reserve is going to tell us what they’re going to do with interest rates and what they think about where we stand versus inflation. We’re gonna get two inflation data between now and then we’re going to get on November 14, they’re going to tell us what the inflation was in October, and on December 12. They’re going to tell us what it was in November, because they’re always the next month. And based on that information, the Fed is then going to decide on what to do with interest rates. So we believe that it’s a 50/50 chance that they might raise interest rates, so not a certainty at this point by any means. And so therefore, it’s the potential is there that they could pause they could say we’re not going to do it. And that would bode very well for bonds over the long term. And we believe that interest that inflation will bottom around 3% Next year, and therefore the Fed may not need to continue to raise interest rates as they have. If that’s the case, we could see a rally in bonds, like we’ve never seen in history, it could be the biggest bond market bull market ever. And so we’re seriously considering look, we’re looking at, you know, going back into bonds to some degree, but we want to wait to get the two inflation prints first. And we want to hear from the Fed also, before we take any action. So we’re looking at it. And we want to we don’t want to miss out on what we think could be a fantastic rally in the bond market. But we want to jump but we don’t want to jump the gun either. So we’re working on it for you. So what I hope this is doing though, is it’s letting us get the gray hair, it’s letting us worry about it for you so that you don’t have to and that you are especially those of you that are members of SCWPer nation, I hope you’re all out there SCWPering your, you know what off, I hope you’re enjoying your second childhood to the max. And for those of you who are not SCWPerS yet, we want to get you there and we’re going to do everything we can to make that happen. Our goal, as I said is for us to worry about it. So you don’t have to We want your money to last as long as you do. And you can always rest assured that we will do whatever it takes to help protect what you have and to and to have your money support the lifestyle that you want for the rest of your life. That’s our goal. Okay, so thank you for watching this video, share it with your friends, bring as many of your friends over business associates. We want to help them to become SCWPerS as well if we can. So thanks for watching and we’ll talk soon.
Please note: transcript has been modified after the time of recording.
Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of MMWKM Advisors LLC (d/b/a Retirement Planners of America). ©Copyright 2023