Keeping an Eye on The Market
While it’s been a good year so far in the markets, lately we’ve experienced a bit of market volatility. If you’re wondering what to expect in the months ahead, John Silvis, Chief Investment Officer at Fairport Wealth and Luma Wealth, shares insights on market indicators that he and the investment team track, and what they believe the data suggest.
The economy has been slowing, but near-term growth is likely to remain positive. The economic expansion is now in record territory. Although the economy appears to be slowing, signals we watch indicate growth is likely to continue in the near term. The investment team will be keeping a close eye on economic indicators such as the GDP Now Econometric Model out of the Atlanta Federal Reserve Bank, the monthly Purchasing Manufacturing Index, corporate earnings and other predictors of economic growth.
There are several reasons for volatility. The market continues to be impacted by further easing from the Federal Reserve, the threat of increased tariffs and concerns that we’re on the cusp of a currency war with China, as well as many other factors.
Market corrections are not uncommon. Historically speaking, we average about one 10% correction every year and about two to three 5% corrections.*
There is often a seasonality to equity returns, and right now we’re in a slow period. According to Ned Davis research, average S&P 500 returns since 1952 suggest August through October is historically the slowest period with an average increase of just 4 bp during that period.
We believe equities remain attractive right now, however we do anticipate some volatility ahead. We carefully monitor short- and long-term market activity, but Luma Wealth believes in a long-term diversified approach. If you would like to discuss any of these topics in more detail, please reach out to your Luma Wealth team.