January Market Commentary
Stock markets surged into the new year, as the Standard & Poor’s 500 (S&P 500) rallied significantly in January after a meaningful sell-off in December. As we reviewed in our Fourth Quarter Market Commentary, Federal Reserve Chairman Jerome Powell’s hawkish comments about continuing to raise interest rates were a contributing factor to the stock market correction late in 2018. As we suggested in our commentary, this set the stage for a recovery and a potentially good year in 2019. In early January remarks about monetary policy, Mr. Powell commented the case for higher interest rates “has weakened” due to muted inflation and slowing U.S. growth. He suggested the Fed will be patient before deciding its next move. Markets reacted positively to these dovish comments by the Fed. It is important not to understate the importance of the Federal Reserve’s communication strategy. If they are perceived to be too aggressive in increasing interest rates, investors become concerned they will lead us into a recession. Therefore, the Fed’s actions to slow the pace of interest rate hikes reduces the chance of it causing the next recession anytime soon. As corporate America reports December quarter financial results, the U.S. economy remains healthy overall. While the benefit of lower corporate taxes fades in 2019, a strong labor market, low unemployment, benign inflation and the re-opening of the government are factors contributing to solid growth expectations for the U.S economy. One of the biggest challenges for investors to face in 2019 is U.S. corporate profit growth will slow, but we expect it to remain positive for the year. This does not imply bad markets ahead though. It suggests volatility, both up and down, will likely persist for the year. As long-term investors, this does not change our focus on structuring well-diversified portfolios to provide attractive risk-adjusted returns. It is important not to get caught up in the distractions by the media about what the market will do today or next week. Rather, staying disciplined with your long-term asset allocation and maintaining diversification are keys to helping you achieve your long-term goals.
9258 Welcomes Shawn!
Shawn Fishbaugh, CFA joined 9258 Wealth Management in early 2019 and currently serves as Executive Vice President, Chief Investment Officer. Shawn brings a robust history of experience at several area wealth management firms, working in roles such as Chief Investment Officer, Senior Investment Advisor, Senior Portfolio Manager, Research Analyst and Portfolio Manager. Shawn earned his Bachelor of Business Administration in Finance from the University of Cincinnati in 1986 and received his CFA designation in 1990. Shawn is a member of the CFA Institute and the CFA Society of Cincinnati. Shawn is a past chairman of the Board of Trustees of the St. Joseph Home and Treasurer of Churches Active in Northside (CAIN), a food pantry serving the Northside community. Shawn and his wife are proud parents of two grown children who live in distant cities.