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We Said It, The Fed Said It, Now Do You Believe It?

Hello, and welcome to our Market Alert video for today, which is February 2, 2024. January is over already, my gosh, time flies when you’re having fun, doesn’t it? I hope you’re doing well. I hope this video reaches you healthy, wealthy and wise, we have a ton of stuff to talk about, not the least of which is that now, my two year old grandson is starting to formulate sentences. And it’s funny because his first, his favorite sentence always starts with I want, I want this, I want that I want that he’s figured out I want. And when he says it to my wife, she immediately jumps to attention, you know, grandmother’s in! I try it, doesn’t work. I want this, I want that she goes, Get it yourself. Anyway, let’s talk about this week, we got a ton of data. Oh, my gosh, and a lot of it was like earth shattering. So let’s start off with the Federal Reserve they on they told us what they’re going to do with interest rates. And why. And as we’ve been saying, for several months now, this notion that the Federal Reserve is going to start lowering interest rates before the second half of 2024, nuh uh. And sure enough, Jerome Powell came out and said, for all of those of you who think that in March, we’re gonna start lowering interest rates, it ain’t gonna happen. Okay. And so the Federal Reserve has said repeatedly, and the thing about it that’s that I don’t understand is that investors seem to not believe what the Fed says. It’s like the Fed has some sort of a credibility problem, because they’ve been telling us all along, they will not lower interest rates until they see the whites of 2% eyes. And we don’t think we’re gonna see 2% until April. And then they said, Not only that, but we’re not gonna start lowering interest rates, until we’re very confident that that 2% is going to stay there. We don’t want to make the same mistake that Paul Volcker made back in the 80s, where he declared victory over inflation too soon, and started lowering interest rates and inflation went back up again. And then he had to raise interest rates and all kinds of havoc ensued. He does they don’t want to do that. So again, we go back to we think that interest rates will not be going down until July. Now, having said that, the market, a lot of investors were thinking March. So what happened when the Jerome Powell said no, not march? Well, we saw an instant reaction, the bond market, a lot of bond investors, interest rates go down, bond values go up, they thought, Oh, oops, I made a mistake. So they sold. And we’ve told you all along that our bond portfolio we think is going to do very well this year. But it did take it on the chin when that news came out. However, if the Fed does, in fact, start lowering interest rates in the second half of this year, bonds will do fine, we told you that bonds, we’re going to have an up and down ride on the way to a high end for this year. And that’s exactly what’s happening. On the stock side of our portfolio, we got jobs, numbers and jobs looked fine. In fact, way better than anticipated the economy seems to be holding despite those high interest rates. That’s good for profits. Profits are good for stocks, stocks did well. So we see stocks do quite well now. So overall, what we thought was going to happen seems to be happening. And that is that the Fed will lower interest rates in the second half of this year, not in March. And that stocks would like the prospect of lowered inflation, lower interest rates, cheaper money, and higher consumer confidence. So all of that seems to be fitting into our Fearless Forecast for 2024. So far. Now, of course, as you know, we always have our sell strategy ready to be implemented should we need to, and there are some dark clouds, you know, the real estate market, the commercial real estate market, big bank in New York, who it looks like made a mistake and bought a regional bank that had a lot of commercial real estate loans on its books, took a big profit cut, and they’re probably going to get downgraded. So that’s shades of 2008, where banks were holding bad debts. And as you guys know, interest rates came up so fast, that real estate loans that are now coming due are way way higher than the people that built those plans thought they would be. And so a lot of those deals may not be able to be refinanced, those companies may go bankrupt. And we’re talking about a trillion dollars of commercial real estate that potentially is at risk. If we start seeing regional banks go under because of this, we could have a severe reaction in the stock market. And again, that’s why we have our sell strategy. We want to get out before you are badly harmed. That’s what we do. Okay, so that’s why we have the Invest and Protect. So overall, we don’t think that it’ll be as bad as I just made it sound, but it could, and we’re prepared for it. So we want you to have peace of mind, we don’t want you to worry about all this stuff, let us do the worrying for you. So that you don’t have to, your job is to go out there and SCWPer your little tail off, okay, we want you to be SCWPering all over the place. And so SCWPer nation, I hope you guys have peace of mind. And that you’re not worrying about this. Those of you who aren’t SCWPerS yet, we will do everything we can to get you to that second childhood without parental supervision to your retirement. And we’re going to work with you and get you there. We built a plan with you, we’re going to maintain it, work it and help you to get there. So thank you so much for the confidence you placed. One thing I’m going to ask you to do is to podcast our the show, many of you listen to the show on the radio. And so podcasting is the future. We had 250,000 downloads of our podcast last year. We don’t want you to miss out on anything, right? You got to get that and it’s very simple, takes about 14 seconds to do it. If you need help with that, just ask us and we’ll walk you through it. It’s very easy, very fast. And you’ll get the show downloaded to your device every week. And you can listen to it whenever you want to whether you’re working in the garden, going for a walk, whatever you may be doing, you can listen to the show and have all the fun that a human being should be allowed to have. So podcast a show our goal is a million podcast so help us with that be it’ll be fun. Share this video with your friends and family. Overall, we look our pot our Fearless Forecast for this year seems to be still in place. We think bonds will do well stocks will do well this year. And there are some dark clouds but we don’t think they’re overly worrisome but if they do become so we already have a plan for that. So thank you for watching this video 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 RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023