April Market Pulse

With another tax season now fading in the rear-view mirror, so too does the first third of the year exit to its earned place in the history books. With the second, typically slower and quieter investment market third upon us, could one be faulted for thinking it’s a good time to take a breather? Besides, the old Wall Street adage does suggest “sell in May and go away”. And as April closed out, investment market headlines were converging on the giddy: (1)

Dow rallies to wrap up best month since January

Indeed, as the numbers on the last page suggest, almost all the right numbers are green. And while any red numbers may suggest poor investment performance, at least they are helping our wallets as consumers. Most energizing is to see this dynamic flowing through to the year-to-date numbers as well. Would it be premature to proclaim the return of euphoria to the markets?

While fortune telling, especially in a short term, is not my scope of work, it’s not to say that I too don’t enjoy seeing investments grow and costs subside. ‘Tis truly a wonderful set up as Spring serenades us with warm light. I would not shun “going away” for four months of enjoyment. Such would not be a prudent maneuver, however. This is especially true as further global recession chatter picks up steam throughout a vast array of sources, big and small.

But no source is more prevalent than the US Federal Reserve (the Fed). And as the central bank with all the sway, much of its planning and maneuvering powers come from its words. It’s why you see and hear so many pundits hanging off every word that is said or written by any Fed official. It’s why Fed news release events are firmly entrenched in every Wall Street day planner. With such power of words, Fed officials know they must also be very wary of how they present information, for one misconstrued work or phrase can set fire to the entire global economy. Imagine the pressure!

As such, it is not outside the realm of fathoming that the Fed rarely officially foresee any recession, at least before it happens. Doing so would wag the dog and unleash the very recession they were predicting. In releasing their March meeting minutes in April, it is thus peculiar to see their tone changing on the likelihood of recession this year, as per this quote from their March minutes: (2.)

“For some time, the forecast for the US economy prepared by the staff had featured subdued real GDP growth this year and some softening in the labor market. Given their assessment of the potential economic effects of the recent banking sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”

Would this not submit that circumstances are more acute than presented? Perhaps their hand is forced, with evermore data points painting a landscape not as rosy as their recent words have suggested. For instance, as pointed out by Lobo Tiggre at the Independent Speculator: (3.)

“The now clearly, steadily rising jobless claims in the US threaten the “everything’s fine because we have such a strong labor market” narrative Powell, Yellen, Biden and others keep peddling.”

The role of “money general” – maximizing the return of money (and then some), minimizing the losses inflicted on money deployed – is not an easy one. But it’s a job someone must do. If your financial forces are lacking that commander who thinks differently, lets connect and discuss how we are better positioned to build and preserve your money so you can enjoy and share it long into the future.

All My Best,

Adrian Harasymiw Investment Advisor Pinnacle Sovereign Investments of ACPI

P.S. To review the April market numbers or download a PDF copy of this commentary, head over to the Monthly Market Pulse page on our website.

#CreateWealth #ProtectWealth #MarketPulse #Investments

(1.) Investing.com

(2.) Mauldin Economics – Thoughts from the Frontline – Inflationary Choices – April 15, 2023

(3.) Independent Speculator – Speculator’s Digest – The "R Word" – April 22, 2023