Archives: Insight

Weekly Market Insights – Monday, August 12, 2024

Stocks Bounce Back After Rough Start:

Stocks finished last week with modest losses, masking a volatile five-day trading period in which investors reacted to recession concerns before later dismissing the slowdown talk as speculation as the week progressed.
The Dow Jones Industrial Average slipped 0.60%, while the Standard & Poor’s 500 Index ended flat (-0.04%). The Nasdaq Composite dipped 0.18%. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.21%.1,2

Source: Bloomberg Finance, L.P.

Stocks Stage Comeback

Monday was the worst day for the S&P 500 and the Dow in nearly two years. As recession talk grew louder, investors took a “risk off” position.
On Monday, the Japanese market had its worst drop since 1987 as market participants unwound positions from a popular trading strategy called a “carry trade” amid a global sell-off in stock prices.3
But on Thursday, initial jobless claims fell less than expected—a positive sign for the labor markets— which quieted some of the recession talk. Also, as the week progressed, there was growing speculation that the July jobs report was more of an outlier than a lead indicator of a pending recession.
By Friday’s close, all three major averages had regained most of the week’s losses.4

Sources: U.S. Department of the Treasury, Board of Governors of the Federal Reserve System, Charles Schwab

Mortgage Update

Last Thursday, the average rate on a 30-year fixed mortgage dropped to 6.47 percent—a 15-month low. Many home buyers welcomed the news, and it appeared to help support Thursday’s rally.5
But the announcement left some wondering whether rates would continue to trend lower. Mortgage rates are tied to the interest rates set by the Federal Reserve. Some speculated the drop was due to market participants anticipating the Fed would adjust rates in September, which remains anything but certain.6

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, August 9, 2024
2Investing.com, August 9, 2024
3CNBC.com, August 5, 2024
4The Wall Street Journal, August 8, 2024
5The Wall Street Journal, August 8, 2024
6The Wall Street Journal, August 9, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Summer Break, Please! Unpacking Stock Market Events

By Gary Aiken | August 6, 2024

I’m sweating. What happened to summer break?! I deleted a last-minute slide from my Halftime Report presentation. The slide in question showed the incredible rise of technology stocks leading U.S. and global stock markets higher from January through June of last year, before a summer sector rotation. The first six months of this year repeated a significant rise in the prices of technology stocks as the Artificial Intelligence hardware and software race continued unabated.
I questioned on this slide whether we might see another summer sector rotation. No sooner than I had deleted it than the summer rotation I posited might begin, started. A combination of narrative and technical analysis seems to explain, in hindsight, the recent moves and maybe give us some idea of whether this is a regime change or just a temporary deviation from the prevailing trend. Let’s discuss briefly three of many reasonable explanations:

1. The Story of the Yen Carry Trade

Correlations between asset classes that don’t seem connected can sometimes imply something else is happening. The Japanese Yen and the S&P 500 (US Stock Market) were highly correlated this year. Hedge funds and institutional investors were using something called a carry trade – borrowing in one currency to buy assets in a different currency. As the funding currency (the Yen) depreciated, more dollar assets could be purchased. This trade would become more and more profitable the longer it went on.

A Positive Correlation Between the Yen and U.S. Stocks

Source: Bloomberg Finance, L.P.

However, the leverage in this trade would mean that its unwinding (forced selling and buying) could provoke very dramatic moves in both markets. In advance of its July meeting, the Bank of Japan started to intimate that it would raise interest rates for the first time since 2008. Contemporaneously, concerns emerged challenging the benefits of Artificial Intelligence applications and the pace of hardware infrastructure capital expenditures. The Yen started to appreciate in early July followed closely by selling in U.S. technology shares ahead of earnings.
Interestingly, on the last day of July, this correlation seemed to break down. While the Yen appreciated further on the day the Bank of Japan announced its policy decision, large-cap tech stocks abruptly stopped going down and rallied. The Yen carry trade unwinding was not over. The Yen has now appreciated to the point where almost all its losses against the dollar for 2024 have been erased. The physics of this trade requires an equal and opposite violent reaction on the other side of the ledger. This has come in the form of a broad-based sell off in global stocks.

2. The Story of the Inverse Relationship

The first quarter of 2024 was marked by increasing price-to-earnings (P/E) ratios and increasing yields. This positive correlation owed to a combination of a good economy, an inflation resurgence and healthy profit growth expectations enabled this positive correlation. The second quarter held a different and unfortunately familiar narrative. As they did for much of 2022, the prices of long duration assets (such as stocks and long-term bonds) reacted inversely to interest rates. Bond investors will remember the mathematical relationship that as yields go up, prices go down. The “inflation is back” narrative pushed rates higher in early April. When positive inflation data and shakier employment data came in, rates began to retreat. The rate cuts narrative became more mainstream again and stocks resumed their upward march.

Shifting Relationships in Stock and Bond Prices

Source: Bloomberg Finance L.P.

July proved a hyper microcosm of the second quarter. P/E ratios went on an inverse interest rate rollercoaster ride. Interest rates fell in the first two weeks, only to rise in the third and fall again into the Fed meeting at the end of the month. Tech-heavy stock index volatility ramped up in response, and small-cap stocks came to life. The Russell 2000 Index of small company stocks was up 10.2% in July, while the S&P 500 eked out a 1.2% gain that was in question until the final day of trading.
The Federal Reserve made no substantive changes to its statement on July 31, and Jerome Powell sheepishly provided answers at the press conference. The market is convinced that rate cuts are coming as early as September. Per our Halftime Report discussion on the same subject, we happen to agree that is likely.

3. Artificial Intelligence (AI) Capital Expenditures

A scary thought entered the minds of technology company analysts during July – or at least they started to talk openly about this fear. What if there’s no “killer app” for AI or the market begins to realize that it may take longer to realize the potential of AI? In that scenario, capital expenditures would shrink. Maybe the number of chips companies like Nvidia are baking into their projections makes no sense. Maybe there’s no real end user, and it’s the same ecosystem of companies selling to themselves. Maybe the hyperscalers (Microsoft, Amazon, Google, Meta) curb their spending to satisfy investors who don’t like the spending without an unambiguous revenue attached to it. These fears manifested in a sharp drop in the entire tech complex in July. The S&P Semiconductor Select Industry Index dropped 15% within a matter of days, while software indices fell 8%.

Projected Generative Artificial Intelligence Spending

Source: Sources: Bloomberg Finance, L.P., Bloomberg Intelligence, IDC, eMarketer, Statistica

The swiftness of this drop was abated by a simple reality. The number of applications that AI holds is still growing. It’s not just about a better chatbot. Uses extend from identifying cancer earlier to faster drug approvals in healthcare. It will lead to more efficient crop production to optimize pesticide delivery or integrating weather patterns into timely planting, watering, and harvesting. The fears were ultimately abated by Microsoft and Meta Platforms, which stated that they were not slowing down capital expenditures for the next two years. We are convinced that there’s nothing unreal about Artificial Intelligence.
We were wrong to pull our “summer sector rotation” slide. The violent downward moves in global stock markets are providing better prices for the stocks of highly profitable companies, including technology stocks. In the meantime, as in many times of market stress, long term investors must endure a painful continuation of July’s heat and market tumult. Instead of a fun summer break, we’re going to need a break from summer.

Author

Gary Aiken, Chief Investment Officer

Gary Aiken is the Chief Investment Officer for Concord Asset Management and is responsible for macroeconomic analysis, asset allocation, and security selection, as well as trading and investment operations.

Gary has over 21 years of investment experience and holds an undergraduate degree in economics from the University of Maryland and an MBA from The George Washington University School of Business.

—

Disclosures: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Concord Asset Management, or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Concord Asset Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Concord Asset Management is neither a law firm, nor a certified public accounting firm, and no portion of this content should be construed as legal or accounting advice. A copy of Concord Asset Management’ current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/. Please Note: If you are a Concord Asset Management or Concord Wealth Partners client, please remember to contact the firm in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, and/or revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Concord Asset Management and Concord Wealth Partners shall continue to rely on the accuracy of information that you have provided. Please Note: If you are a Concord Asset Management or Concord Wealth Partners client, please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, August 5, 2024

Investors Retreat Despite Fed Optimism:

Stocks experienced broad declines last week as investors looked past recent dovish comments from the Fed and focused on disappointing corporate reports and weaker-than-expected economic data.
The Dow Jones Industrial Average lost 2.20%, while the S&P 500 Index fell 2.06%. The Nasdaq Composite Index dropped 3.35%. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, gained 0.19% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Volatile Week of Trading

Stocks were under pressure early in the week as investors appeared to focus on the Fed’s July meeting, which ended on Wednesday. It was a big week for Q2 corporate reports, with five of the ten largest names in the S&P 500 by market capitalization reporting numbers, but investor attention was mainly on the outcome of the Fed’s meeting.2,3
Stocks rallied on Wednesday when Fed Chair Powell indicated a September interest rate cut was “on the table,” but selling picked up on Thursday as investors’ attention quickly shifted to disappointing corporate reports and weak economic data.4
Friday morning’s disappointing June jobs report raised even more concerns about the economy’s strength. The Nasdaq ended the week in correction territory, down more than 10% from its recent all-time high.5,6

Sources: U.S. Department of the Treasury, Charles Schwab & Co., Inc.

Economic Concerns

Fresh economic data suggested weakening manufacturing, construction, and employment outlooks. On Friday, the Labor Department’s July jobs report showed a sharper-than-expected job growth slowdown and an unemployment uptick to 4.3%—the highest rate in 2½ years.
At Wednesday’s Fed press conference, investors welcomed Powell’s unusually candid and upbeat comments. However, as the week progressed, investors started questioning whether the Fed was misreading the economy and moving too slowly in adjusting interest rates.7

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, August 2, 2024
2The Wall Street Journal, August 2, 2024
3S&P Global, July 31, 2024
4The Wall Street Journal, July 31, 2024
5The Wall Street Journal, August 1, 2024
6CNBC.com, August 2, 2024
7The Wall Street Journal, August 2, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, July 29, 2024

Stocks Shift Gears Amid Mixed Q2 Reports:

Markets experienced a volatile week with mixed results as disappointing corporate earnings reports left investors unsettled last week. This prompted some rotation away from leading sectors in favor of other emerging names.
The Dow Jones Industrial Average picked up 0.75%. Meanwhile, the S&P 500 Index declined 0.83%, and the Nasdaq Composite Index dropped 2.08%. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.49% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Q2 Corporate Reports Start

Last week began with some positive momentum, but after Tuesday’s close, two influential tech companies reported disappointing Q2 numbers, which soured sentiment. On Wednesday, the S&P dropped 2%, and the Nasdaq fell more than 3%.2
Stocks attempted to rebound on Thursday on news that gross domestic product grew much faster than expected in Q2, but sellers swooped in near the close.3
Stocks rallied broadly on Friday after a positive inflation report. The personal consumption expenditures index, widely considered the Fed’s preferred inflation measure, showed only a slight uptick in June—in line with expectations.4

Source: Charles Schwab & Co., Inc

Watch the Rotation

July 26 saw the end of the third consecutive week in which the Dow led the other two averages and its fourth straight week of gains.
At the same time, the S&P and Nasdaq have been under pressure, with both posting losses for the second consecutive week.
So far in July, the Dow is up nearly 4%, the S&P is down slightly, and the Nasdaq is off by over 2%. That’s a marked change from earlier in the year when the Nasdaq led.5

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, July 26, 2024
2The Wall Street Journal, July 26, 2024
3The Wall Street Journal, July 25, 2024
4CNBC.com, July 26, 2024
5The Wall Street Journal, July 26, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, July 22, 2024

Stocks Struggle as Investors Shift Focus:

Last week, stocks faced increased pressure as investors appeared to shift away from mega-cap tech stocks and toward sectors that may benefit from lower interest rates.
The S&P 500 Index fell 1.97%, while Nasdaq Composite Index declined 3.65%. The Dow Jones Industrial Average bucked the downward trend, up 0.72%. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.48% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Dow Leads Again

Last week began very differently than it ended. All three averages rallied over the first couple of days this week, with the Dow leading on both days. Fed Chair Powell indicated the Fed may not wait for inflation to reach its 2% target before considering a rate move, buoying the markets.2,3
Then, markets hit a speed bump as investors appeared to take profits and rotated away from mega-cap tech names. The selling broadened beyond tech-related names on Thursday as all but one of the S&P 500’s 11 sectors fell.
Early Friday morning, a global tech outage caused disruptions for businesses, governments, and financial institutions, contributing to the weekly decline. Despite its losses in the second part of the week, the Dow finished in the green.4,5,6

Source: Charles Schwab & Co., Inc

Upbeat Economic Data

Although stocks were under pressure, some investors saw “green shoots” in a few economic reports. Housing starts rose 3% in June and building permits also ticked higher. Retail sales were unchanged in June, which was better than expected. Investors were encouraged that consumers were still spending despite ongoing inflation.7,8

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, July 19, 2024
2CNBC.com, July 15, 2024
3CNBC.com, July 16, 2024
4MarketWatch.com, July 17, 2024
5CNBC.com, July 18, 2024
6The Wall Street Journal, July 19, 2024
7KPMG.com, July 17, 2024
8AP.com, July 16, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, July 15, 2024

Stocks Surge Amid Inflation Data and Earnings Kickoff:

Stocks advanced last week as market leadership shifted in response to fresh inflation data and the beginning of quarterly corporate earnings reports.
The S&P 500 Index advanced 0.87%, while the Dow Jones Industrial Average picked up 1.59%. The tech-heavy Nasdaq Composite Index, which has led all year, rose 0.25%. The MSCI EAFE Index, which tracks developed overseas stock markets, rallied 1.62% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Dow Breaks 40,000 (Again)

Mega-cap tech led modest gains for the S&P 500 and Nasdaq in the first two days of the week, with the Dow posting modest losses both days.
But that narrow trading range didn’t last long as market leadership shifted midweek. Upbeat corporate earnings reports and milder-than-expected consumer inflation in June drove momentum in a handful of larger industrial and consumer stocks.2,3
Q2 earnings season got into full swing later in the week, dominated mostly by financial and consumer-oriented companies. Markets seemed initially unfazed by better-than-expected reports from some money center banks. Some observers suggested higher interest rates may be one of the reasons for the market’s lukewarm response.4
The Dow ended the week with a solid gain after three consecutive weeks of trailing the S&P 500 and Nasdaq. The Dow also closed above 40,000, the first time it had done so since May, and hit a 52-week intraday high on Friday.

Source: Charles Schwab & Co., Inc

Mixed Inflation News

Two inflation reports came out last week: PPI and CPI. The Producer Price Index, which measures the change in wholesale prices, rose 2.6% in June year over year—its largest increase in 16 months. By contrast, the Consumer Price Index, which tracks consumer prices, showed that the pace of inflation slowed in June.
Markets shrugged off the conflicting data, instead embracing the cooler CPI data. The Fed is likely taking notes for its next Fed meeting, scheduled for July 30-31.5

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

A Special Message from Our Chief Investment Officer

We are horrified by the attempted assassination of Donald Trump this weekend, but are relieved that Mr. Trump seems to have made a full recovery. As our clients know, we closely monitor politics in the United States and around the world as part of our research process. Our investment philosophy involves taking a longer view based upon sound economic reasoning that considers factors such as risk, reward, and relative value. We do not trade around specific events.
We encourage you to register here to tune into our Halftime Report tomorrow evening where CEO Wade Lopez and I will discuss the past six months, the election and its implications for investors, as well as what we expect from markets in the coming months.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, July 12, 2024
2The Wall Street Journal, July 12, 2024
3The Wall Street Journal, July 11, 2024
4The Wall Street Journal, July 12, 2024
5The Wall Street Journal, July 12, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, July 8, 2024

Jobs Data Boosts Stocks in Holiday Shortened Week:

Stocks made steady gains over the holiday week thanks to strength in mega-cap tech companies and encouraging jobs reports that increased optimism of a Fed interest rate cut sometime this year.
The S&P 500 Index rose 1.95%, while the Nasdaq Composite Index added 3.50%. The Dow Jones Industrial Average edged up a modest 0.66%. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 2.30% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Nasdaq, S&P Extend Runs

ADP’s employment report on Wednesday showed private-sector employers added 150,000 jobs in June — slightly slower than May’s pace — adding to investor hopes that a slowing economy may prompt the Fed to adjust short-term rates as early as September. The Nasdaq and the S&P hit their 23rd and 33rd record closes, respectively, for the year.2
Friday morning’s jobs report from the Labor Department showed 206,000 jobs added last month, which also suggested a strong-but-cooling economy. News of slower job growth, slowing wage growth, and a slight uptick in unemployment helped drive down Treasury yields, and stocks finished the short week with a strong rally. The Nasdaq and S&P both closed at all-time highs on Friday.3

Source: Charles Schwab & Co., Inc

Still Catching Up?

Driving much of the job growth in last week’s reports was a post-pandemic catchup effect: sectors such as healthcare and leisure/hospitality showed they are still recovering.4
The private-sector jobs data and the Labor Department report painted a similar picture of an economy creating jobs but at a slower rate than in the past.5,6

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, July 5, 2024
2The Wall Street Journal, July 3, 2024
3The Wall Street Journal, July 5, 2024
4The Wall Street Journal, July 5, 2024
5The Wall Street Journal, July 5, 2024
6MarketWatch.com, July 5, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, July 1, 2024

Mixed Signals from the Fed Shake Up Markets:

As Q2 came to a close, stock performance remained mixed last week while investors digested a fresh round of economic data and some surprising comments from the Fed.
The S&P 500 Index slipped 0.08%, while the Dow Jones Industrial Average also dipped 0.08%. The tech-heavy Nasdaq Composite gained 0.24%. The MSCI EAFE Index tracks developed overseas stock markets and rose 0.27% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Nasdaq Regains Lead

Last week opened with the S&P 500 and Nasdaq heading lower, while the Dow rallied on momentum from the prior week. But by mid-week, the leadership shifted with the Nasdaq pushing higher.2
With the back half of the week packed with fresh economic data, conflicting stories developed about the economy. New home sales fell 11.3% in May — the largest month-over-month drop in a year and a half — while the supply of new homes hit a 16-year high. Meanwhile, first-quarter GDP revised slightly to 1.4% higher, and durable goods increased in May.3,4,5
Friday’s personal consumption and expenditure (PCE) data showed that core inflation slowed to 0.1% in May over the prior month and 2.6% year-over-year — its lowest annual rate in three years. Both figures were in line with expectations. Stock prices initially rallied on the upbeat inflation news, but the early gains faded as the trading day progressed.6

Source: Charles Schwab & Co., Inc

Divergent Speaker

Federal Reserve officials have worked to communicate that despite the progress made on inflation in recent months, it remains above the Fed’s 2% target.
Last week, Fed Governor Michelle Bowman surprised the markets when she indicated, “I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse.” Fed Chair Powell, who is scheduled to speak on July 2, told investors on May 14, “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike.”7

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, June 28, 2024
2The Wall Street Journal, June 28, 2024
3CNBC.com, June 27-28, 2024
4AP News, June 27, 2024
5Reuters, June 26, 2024
6CNBC.com, June 28, 2024
7CNBC.com, June 25, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Monday, June 24, 2024

AI Powers Stocks in Shortened Trading Week:

Stocks climbed steadily over the four trading days last week, with the three major indices alternating in the lead due to diverse economic reports and various developments in artificial intelligence (AI).
The Dow Jones Industrial Average rose 1.45% — its best week since May — while the S&P 500 Index gained 0.61%. The Nasdaq Composite, which has led all year, ended flat. The MSCI EAFE Index, tracking developed overseas stock markets, rose 0.94% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

Mixed Economic News

All three averages began the week with gains, including new highs for the S&P 500. However, stocks posted only modest gains on Tuesday as mixed economic data came in. Retail sales rose 0.1% — less than expected, although better than in April when sales fell.2,3,4
Markets were closed for the Juneteenth holiday on Wednesday.
As the week ended, it was the Dow’s turn to lead as sentiment shifted on mega-cap tech names as investors again questioned the sustainability of AI market drivers. Home prices hit a new high in May — this, paired with high mortgage rates, caused existing home sales to fall for the third consecutive month.4,5

Source: Charles Schwab & Co., Inc

A Notable AI Driver

Some investors and market analysts are examining the underlying long-term drivers of AI more closely, given its outsized impact on market averages like the S&P 500 and Nasdaq.
One such underlying driver is “DRAM,” Dynamic Random Access Memory, the AI-turbocharged version of a RAM semiconductor, more commonly referred to as “memory chips.” Companies making DRAM chips are an essential part of the AI ecosystem. Expect attention to shift to prominent DRAM players as they report earnings in Q2.6

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, June 21, 2024
2CNBC.com, June 17, 2024
3The Wall Street Journal, June 20, 2024
4MarketWatch.com, June 10, 2024
5The Wall Street Journal, June 21, 2024
6MarketWatch.com, June 20, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Weekly Market Insights – Tuesday, June 18, 2024

Markets Notch Gains in Reaction to Major Reports:

Stocks notched solid gains last week, driven largely by the Fed’s latest rate decision, May’s inflation report, and Apple’s AI-related news.
The S&P 500 Index rose 1.58%, while the Nasdaq Composite picked up 3.24%. The Dow Jones Industrial Average, which has lagged most of the year, slid 0.54%. The MSCI EAFE Index, which tracks developed overseas stock markets, fell 1.44% for the week through Thursday’s close.1

Source: Charles Schwab & Co., Inc

S&P 500, Nasdaq Lead; Dow Lags

Market leadership took a familiar form. The tech-heavy Nasdaq led while the Dow trailed for the second week (and four out of the past six weeks).2
Stocks trended higher at the start of the week as investors cheered an artificial intelligence update from Apple.3,4
By midweek, the market had split, with the Nasdaq and S&P 500 moving higher while the Dow lagged. Investors were upbeat after learning that consumer prices rose less than expected in May and that the Fed decided to keep rates steady. However, some investors were unsettled after learning Fed officials had shifted their outlook and now only penciled in a single rate cut between now and year-end. A few months ago, the Fed had indicated as many as three cuts were possible.5

Source: Charles Schwab & Co., Inc

Busy Week for News

Last week was chock full of market-moving events. Between Apple’s AI update, inflation, and the Fed, it was a toss-up which one influenced sentiment the most.
AI’s outsized role in driving market momentum continued last week. OpenAI’s deal with Apple arrived at the start of last week, and the news followed OpenAI’s deal earlier this year with Microsoft. Please note that these companies are mentioned for illustrative purposes only; it is not a recommendation to buy, sell, or hold this or any security.6
Wednesday morning, the Consumer Price Index (CPI) was announced. A few hours later, the Federal Open Market Committee updated its monetary policy. Those pieces of news have only arrived together 13 times since 2008.
The FOMC kept rates steady at the current 5.25-5.50 percent target range, a widely expected decision. However, the tame CPI report caused some volatility as investors grappled with how the report may influence Fed policy.7,8

This Week: Key Economic Data

Source: Bloomberg Finance L.P.

This Week: Companies Reporting Earnings

Source: EarningsWhispers

At Concord Asset Management, we design portfolios for the long run, with the ability to navigate various market cycles. However, you can have confidence that we are monitoring these market-moving events, and we will make reasonable, tactical adjustments as necessary.

Author

Gary Aiken
Chief Investment Officer
Concord Asset Management
—

Footnotes and Sources

1The Wall Street Journal, June 14, 2024
2The Wall Street Journal, June 14, 2024
3The Wall Street Journal, June 10, 2024
4CNBC.com, June 12, 2024
5The Wall Street Journal, June 10, 2024
6The Wall Street Journal, June 10, 2024
7The Wall Street Journal, June 10, 2024
8MarketWatch.com, June 10, 2024

The companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications, and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Concord Asset Management, LLC (“CAM”) is a registered investment advisor with the Securities and Exchange Commission. CAM is affiliated, and shares advisory personnel with Concord Wealth Partners (“CWP”). CAM offers advisory services, including customized sub-advisory solutions, to other registered investment advisers and/or institutional managers, including its affiliate, Concord Wealth Partners, LLC. CAM’s investment advisory services are only offered to current or prospective clients where CAM and its investment adviser representatives are properly licensed or exempt from licensure.

The information provided in this commentary is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status, or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CAM or its affiliates, or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from CAM or CWP. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. CAM and CWP are neither law firms nor certified public accounting firms, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of CAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://concordassetmgmt.com/

Please Note: If you are a CAM or CWP client, please remember to contact us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. CAM and CWP shall continue to rely on the accuracy of the information that you have provided. Please Note: If you are a CAM or CWP client, strong>please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.