Blossoms

I feel guilty to be writing a February blog on March 1st. Sometimes, however, I write a blog only to discover it doesn’t communicate what I need to say. February saw at least three iterations of an effort that ultimately ended up on the proverbial cutting room floor. I don’t know how it happens but, the minute I let that one go, the real one appeared.

With little regard for the cold and wet weather in California that shattered records, the blossoms on the trees in my neighborhood are stubbornly announcing that warmer days are ahead.

The Market too seemed cold and unsettled in February. Volatility, generally attributed to economic headlines, increased. Without a doubt, things remain unsettled. However, there are a few market blooms worth paying attention to. 

• The S&P is almost 14% above the low set on October 13th. Yet, we remain over 17.6% below the high set at the end of 2021. The degree to which future economic trouble is already factored in is unknown but clearly, last year’s correction took a lot of fluff out of the market.
• Fed tightening will likely extend longer than anticipated but historically, the market has a tendency to reverse course prior to the actual peak in interest rates. I believe this course reversal is already in place.
• The Wall Street Journal reports that public US companies are expected to repurchase in excess of $1 trillion of their own stock this year. One should probably assume their CEO’s know more than just about anyone about the attractiveness of their shares.

The past few weeks has had us reaching for the comforter and, if the forecasts are right, we likely have a little further to go. It is with absolute certainty however that the seasons do change and the closer I look at both my yard and market the more evidence I find.

Any opinions are those of Nathan Clakley and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. You cannot invest directly in an index.