The Weekly Update 8/02/2024
Fear Levels Remain Elevated!
As of July 30th, 2024, The Fear and Greed Index remains solidly in the “Fear” zone at 39 out of 100.
Just one week ago this gauge of fear rested in the “Greed” zone at 54 and one year ago in the “Extreme Greed” zone of 76. Yet, the valuations of Corporate America, as measured by the S&P 500, are near an all time high.
Here is the detail.
Of course, if you listen to your favorite news source, you might start to believe the Apocalypse has “finally” arrived! See, there they are;
“The Four Horsemen” Conquest, War, Famine and Death.
If instead you chose to focus on fact based, independent and source cited facts, like The Seven Signs of a Changing Economy™, (Read It Here) you would observe that our economy is doing well.
For example, as you have read here for over a year, inflation is dropping like a rock.
Check it out!
This is in “real time” versus the very time lagged Bureau of Economic Analysis (BEA) data. Note, that at 1.51% our inflation is already well below the Federal Reserves publicly stated target rate of 2%!
Arguably, the Fed should be reducing rates now, yet they will likely wait until the September 18th, 2024, meeting where they are expected to reduce rates, but perhaps by ½% versus the telegraphed ¼%! And, then another ¼% reduction at the December 2024 meeting.
If for some reason you believe the kids in D.C. matter to Corporate America, well Corporate America never received the memo. The profits of Corporate America have NEVER been higher and very much support the current valuations. If you were to read Sign #6 of the July 2024 Seven Signs (Read It Here) you would also see that trend could continue for a few more years, or more.
Check it out.
You would not be nutty to think valuations for Corporate America will continue to trend higher.
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA is just waking up from the post Covid hangover. The outlook is that this could be a 10 ticket ride up the net worth curve.
Don’t fret, panic or worry if the “normal” back and fill comes knocking. It will not be as scary as the business news will tell you. Instead, I think the knocking will be an opportunity and here at the WSG, we will pounce on that, for now just pray that it comes!
At TWSG, we are well allocated for this and have our well thought out Investment Selection Matrix™, investment menu working in our collective TWSG family’s asset allocations.
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email, or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Stock investing includes risks, including fluctuating prices and loss of principal.
Asset allocation does not ensure a profit or protect against a loss. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time.