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This Does Not Look Good

Hello, and welcome to our Market Alert video for today, which is August 2, 2024. I want to say hi to all your clients, and especially all you SCWPerS out there, I hope you are all healthy, wealthy and wise and all is coming up roses for you. We have a lot to get to boy, we got a lot of data and it was not good. And you can see what happened in the markets that reflects that. So let me go over it with you. Several things happened number one manufacturing came in. And it was worse than expected. Unemployment came in at 4.3%, when it was expected to be at 4.1. New jobs was supposed to be 175,000. It came in at 114,000. And jobless claims were up more than expected. So all you take that all as a as a conglomerate, you put it all together. And overall, that was not a very good thing. And what it implied because jobs have been the thing that have been giving people confidence that yes, the economy is slowing down, that people are holding on to their jobs. And as long as they have that we’re gonna, we’re not going to have a really big bad recession. Well, the jobs numbers are now starting to deteriorate. And the problem isn’t that these numbers are so horrible. It’s just that it’s a continuation of previous bad numbers. And so the trend is accelerating. And the concern is, is that the Federal Reserve has waited too long to start lowering interest rates. Now, they’ve always said, you know, we’re willing to, you know, sacrifice and have a recession if that’s what it takes to get rid of inflation. But now the focus is nobody’s talking about inflation anymore. They it’s we beat inflation, apparently. But now it’s the jobs and they’re deteriorating faster than people would like. And the concern is, is that if the economy slowing down, and then the driver, the consumer starts losing their jobs, or we start seeing employment going up, which it has more rapidly than expected, then that’s a really bad combination. And we could see a bad recession. And again, we have precedent for this, Paul Volcker back in the 80s, when he was combating inflation, basically, he waited too long also, and we had a terrible recession. And we had a terrible bear market that went with it. So how does that apply? How does that affect us? Well, there’s good news. And there’s good news. The very good news is that we have been anticipating that the Fed was going to lower interest rates. And we said at the beginning of this year, they would do that after July. Well, here we are, it looks like they’re going to do it in September. And we said that the bond aggregate index historically, when which is what our the majority of our bond portfolio is invested in, if you see a 1% drop in interest rates, historically, that bond aggregate index has gone up 10%. So that’s the one to 10 leverage. And so we said, we should see the Fed over time drop interest rates by 1% or more. And if that happens, then our bond portfolio should do very well accordingly. Now we bought back in in December in of last year, in anticipation of this. And right now, over the last month, the bond aggregate is up about four and a quarter 4%. And that makes sense because now investors are anticipating a three three rate hikes and maybe a quarter each of a percent, that would be three quarters of a percent. So therefore, you know, the four to 5%. See, the math kind of seems to be moving in the right direction. So we’re very positive about our bonds. And we continue to say that in the second half of this year, we think our bond portfolio will do better than our stock portfolio. And that so far is what’s happening. The other side of the corn, of course, is our stocks or equities. And certainly if we do go into a bad recession, which some people are now saying is going to happen a hard landing as they’re calling it. If that is going to happen, then we have something to address that right we have a strategy, our Invest and Protect Strategy is designed to address if the stock market falls off a cliff to try to mitigate the downside and protect you from that. So we’re well positioned in the instance of a bad recession from our Invest and Protect standpoint. And if we have a bad recession, the Fed is going to lower interest rates and our bond portfolio should do very well in that scenario. So we’re feeling pretty good about where we sit right now overall, and our hope is is that you have peace of mind that’s our goal. That’s why we send you these videos to keep you up to up to date. And we also hope that if you are SCWPerS that you’re out there SCWPering your tail off we want to see SCWPerS tails everywhere. We have cleanup crews now to go pick up all the the SCWPer tails. And so, you know, in fact, I called a client last week and she said, Ken, I’m in New Mexico and I’m hiking and I said, Wow, you’re SCWPering. Awesome. And she goes, Yeah, we’re SCWPerS. So that’s what we want for you that second childhood and let us worry about all this stuff for you and get the gray hairs. Now you may notice I’m wearing my stars and striped shirt. This is in solidarity with the US Olympic team. So Go Team USA. So thanks for watching this video, share it with your friends, your family, anybody that you think might benefit from it. We want to help as many people as we can. So again, thanks for watching, and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023 

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RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”) is an SEC registered investment adviser with a primary business location in Plano, Texas. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that Retirement Planners of America has attained a certain level of skill, training, or ability. The “Invest and Protect Strategy” (the “Strategy”) refers to a strategy that Retirement Planners of America fundamentally employs for its clients. Retirement Planners of America previously employed a similar strategy that it referred to as the “buy, hold, and sell” strategy or “buy hold, and protect” strategy. Past performance does not guarantee future results. 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