Author: Derek Tallon

Artificial intelligence (AI) has been a hot topic of discussion for many years now, and for good reason. AI has the potential to revolutionize many industries and aspects of our lives. Recently, the pace of AI innovation has accelerated sharply and easy to use AI tools have started to become readily available to the broader population. Recent breakthroughs have the potential to impact workflows across industries and may have significant impacts on investment portfolios.

AI – What Is It:

There are a lot of different kinds of AI tools being developed as our skill at building new machine learning models increases. In particular, deep learning and large language models have made rapid advancements. Deep learning is a type of machine learning that uses artificial neural networks to learn from data. Neural networks are inspired by the human brain, and they are able to learn complex patterns from data that would be difficult or impossible for traditional machine learning algorithms to learn.

Deep learning has been used to achieve state-of-the-art results in a variety of tasks, including image recognition, speech recognition, and natural language processing.

A similar process is used in the development of large language models (LLMs). These models are able to generate text, translate languages, write different kinds of creative content, and answer your questions in an informative way. These models have recently burst onto the scene as they are easy to work with and highly interactive. They have many uses for day to day productivity, and show promise in assisting with a broad variety of content generation ranging from helping write code to generating articles or other creative content.

AI Constraints:

There are two primary inputs that act as limitations on the development of new AI models; data and processing power. Both resources are crucial. Data without processing power won’t yield a very accurate model, and processing power with low quality data will yield an AI tool full of biases or inaccuracies.

Processing power is the more straightforward of the two constraints. Bigger data sets or more complex AI set ups require more processing power, which means more chips and more electricity. Not all chips are made equal though – AI computing is substantially more efficient when done on graphics cards like those made by Nvidia, rather than on standard computational processors like those that currently dominate most servers across the world. Nvidia’s recent sharp stock price rise is almost entirely due to their raising guidance around expected graphics card revenues for use in AI computing. While Nvidia is currently the top player in the space, Microsoft has committed billions of dollars to help AMD design better chips for AI, and several other companies like Apple, Meta, and Alphabet all have internal chip design programs that will likely focus on AI chips as demand in that sector grows.

Data is the trickier constraint that AI models face. While processing power is primarily a question of cost versus quality, data set availability is more nuanced. The internet as a whole is a great database, but it’s very generalized and the quality is often questionable. More specialized data sets may be harder to access or may face privacy concerns. Furthermore, there are broad concerns around how data is presented when training an AI tool – will the data or the training parameters end up with the AI having a bias or tilt or blind spot. For instance, think about the difference in political perspective if the AI was sampling news from Fox News verses MSNBC. Similarly, what if it’s an automated driving AI and it’s trained without sufficient data for severe weather – the output will only be as good as the data input.

Read the full article in Forbes.

Want to reevaluate your wealth management strategy in 2o23? Contact the nationwide advising team at IHT Wealth Management today!

Taking a look at the May 2023 market outlook, IHT Wealth Management examines the recent banking challenges, labor market, and areas of opportunity for investors.

May 2023 Market Outlook for Banking Sector

As many saw in the headlines, the banking sector faced massive issues over the last few months. However, the big banks with the highest risk and worst operational execution have already been dealt with. Particularly, First Republic and Silicon Valley Bank both had unique circumstances that do not reflect the broader health of the banking system. Furthermore, while First Republic did not get closed until weeks later, it suffered the majority of its damage in the first few days of the banking crisis.

On the other hand, most of the other regional banks reported much smaller deposit declines and fewer liquidity issues. Generally speaking their deposit bases are have more insured depositors and face fewer concentration risks. Down the road, some of these regional banks may face issues generating high earnings, but the immediate liquidity issues are behind us.

May 2023 Market Outlook for Labor Market

The broader market faces recession risks as rate hikes and a pull-back in bank lending impact the American Consumer. At this point, a recession is nearly certain. The question is less whether “if” it occurs and more so pertaining to its magnitude. Will this trigger a hard landing or a soft landing?

Right now the job market is exceptionally strong, paving the way for a soft landing. However, if the banks start to be too restrictive in issuing new credit and the labor market starts to crack then the risks of a more severe recession elevate. The debt ceiling is also a concern. Historically the politicians have always come to an agreement, even if it comes at the eleventh hour – but the deliberating and time wasting does not inspire confidence for the markets.

Safety Bid for Tech and Stance on Energy

Technology is becoming a safe haven. Sector cash flows are exceptionally strong and most companies carry little debt, limiting the impact of interest rates. Furthermore, most of the tech sector has ample room for margin improvements.

Emerging markets look interesting – they are ahead of the United States in the battle against inflation. In fact, many South American countries are now pivoting towards rate cuts rather than rate hikes. China reopening after Covid is also significant.

Finally, energy is another space we are monitoring. While it is exceptionally volatile, companies in the space have become much more disciplined allocators of capital and have generally become much more shareholder friendly.

Watch the full interview on YouTube.

To reevaluate your inflation strategy in 2023, contact the financial advisors at IHT Wealth Management.

With the first quarter of 2023 behind us, earnings season is in full swing. Overall, inflation shows signs of slowing, while rate cuts come to an end. Moreover, the recent GDP numbers came in surprisingly strong.

However, volatility in the banking sector continued. Despite the market rally, recession concerns persistently dominate the headlines.

Financial System Remains Resilient in the First Quarter of 2023

Notably, the first part of the banking crisis is behind us. Deposit outflows stabilized. Additionally, all but a handful of banks reported solid earnings in April 2023.

However, regional bank share prices stay exceptionally volatile and bank stability concerns return to the forefront.

Banking Sector Remains Stable in First Quarter of 2023

While investors in regional banks faced volatility, it is important to reiterate the broader bigger picture – the US financial system remains stable and sound. Bank runs and crisis of confidence events at individual institutions are always going to be a risk our system contends with, but the broad health of the system is not in question.

Although periods of instability and uncertainty create detrimental circumstances for individual banks, the long-run fundamentals still matter. Holistically, the United States financial system carries forth in its fundamental stable.

Banking Strategy Pivots to Expressing Cautious Approach

That said, it is not business as usual. Banks across the country stabilized deposit flows, but they are forced to play defense. The system shock shifted perspectives for bankers nationwide; no longer will they be rewarded for originating new loans and aggressively lending the bank’s money.

Rather, being cautious and careful defines the new game. Historically, this kind of tightening of credit standards and newfound reluctance to originate loans leads to a slowing economy.

The Upside of Tightening Credit Standards

Furthermore, this slowdown in credit creation is exactly what the Fed has been trying to achieve. Recent rate hikes make taking on debt less attractive – they are designed to slow the economy down. While the Fed did not want to see a bank crisis, the unintended consequence is that now it is not only rates that are high, but also banks are going to be reluctant to lend as they hoard cash.

While counterintuitive, the tightening of credit standards and slowing loan formation could be positive for the markets. Nobody is rooting for a deep recession or systematic destabilization akin to what we saw in 2008, but a mild slowdown that puts the breaks on inflation and allows the Fed to normalize rate policy? That would give markets a chance to normalize and start being more forward looking.

Can We Achieve a Soft Landing?

An economic slowdown that brings price stability and removes uncertainty from the Fed’s rate hike program is wonderful, but a deep recession is painful and something we would like to avoid.

Right now, the data indicates we are still on track for a “soft landing” or mild recession and can avoid a depression and deep economic pain.

First Quarter of 2023 Shows Growing GDP Estimates

First, just look at the most recent GDP estimates. Advance estimates released at the end of April for Q1 of 2023 show real GDP growing at 1.1% for the quarter. Taking inflation out of the equation, which is a 5.1% growth rate.

While most economists care about the real GDP growth number, after accounting for inflation, it is important to keep in mind the gross 5.1% number because companies report their revenues and earnings without any inflation adjustment. Said another way, economic growth continues to support a broader expansion in corporate earnings, even as we go through a period of financial instability.

real gdp percent change preceing quarter iht wealth management

Employment and Job Data Reveals Strong Labor Market

Beyond broad GDP numbers there are other metrics worth examining. Employment is particularly noteworthy. As long as unemployment stays low, it is difficult to see us falling into any sort of deep recession or real economic crisis. On this metric the United States is wildly outperforming expectations. Unemployment simply refuses to go up.

Unemployment data from the St. Louis Fed show a rise from around 1,300,000 continuing unemployed insurance claims when the labor market peaked around September of 2022 to 1,858,0000 claims in April 2023. While that sounds high, put it in context: During the Great Financial Crisis, we saw continuing claims peak well over six million. Worth noting these claims peaked over twenty million during COVID-19. Framing it another way, the current unemployment rate is around 3.5%, up from post-COVID low of 3.4%. However, they are nowhere near the unemployment rates we saw during COVID and the Great Financial Crisis.

The strength in employment does not look like it is fading either. While businesses are cutting back on hiring, the broader anecdotal message is that it is exceptionally difficult to find talent right now. Skilled labor appears particularly difficult to find with manufacturers and homebuilders both reporting difficulty hiring. These anecdotal statements are backed up further by job openings data. According to the Bureau of Labor Statistics, we still have more than 1.6 job openings per unemployed person.

Consumer Spending Stabilizes as Savings Rates Increase

Finally, it is worth discussing the health of the American consumer. Consumer balance sheets broadly stabilized in Q4 of 2022, despite having faced inflationary pressures earlier in the year.

Furthermore, savings rates are increasing. In fact, savings rates climbed above 5%. This comes after rates fell under 3% in the summer of 2022 (when inflation was at its worst).key data points april 2023 iht wealth management first quarter of 2023

General Market Outlook Coming Away from the First Quarter of 2023

Markets have rallied into 2023 as the path forward on rates and inflation becomes clearer. While there is still significant economic uncertainty, the view for rates appears to be more stable. This mindset broadly buoyed moderate market optimism.

However, we believe it will be difficult for equities to return to 2021 levels over the next few months. Markets need more certainty around the broader economic outlook, prior to picking up steam. Additionally, investors seek insight as to whether the economy can achieve a soft landing.

Pricing Adjustments to Come After First Quarter of 2023

Nonetheless, while companies remain cautious with their annual guidance, they are generally hitting or beating their earnings numbers. While that sounds surprising, take a moment to consider how inflation impacts corporate earnings. At the beginning, inflation usually costs the companies. First, raw materials for products see price increases.

Second, labor prices rise as workers demand more compensation. However, over time the companies can adjust their prices for inflation. More so, revenues tend to rise during and after inflationary periods. It might take several quarters for new pricing to take effect. Contracts have to be renegotiated. In addition, customers have to get comfortable with new pricing dynamics. Over the medium term, companies can raise prices and keep their margins intact.

Fixed Income Improves Along with Global Markets

Fixed Income markets saw improved fundamentals as they neared the end of the rate hike cycle. Overall, yields on bonds are more attractive than they were at this time last year. Higher yields mean more cushion for investors – future interest rate hikes or cuts will have significantly smaller impacts on bond prices now that yields are so much higher.

Outside the United States, the rest of the globe is also starting to find stability. China is emerging after its COVID restricted slump with low interest rates and high savings rates. Furthermore, South America is starting to see green shoots. Recently, Uruguay became the first South American country to cut interest rates since the COVID-19 crisis, putting their inflation fight in the rear-view mirror. Even Europe is finding its footing after the forced consolidation of Credit Suisse settles down.

Looking Ahead After First Quarter of 2023

Looking ahead, there is still uncertainty. On the plus side, it looks like we have made it through the worst of the Fed’s hiking cycle.

Also, the United States economy passed through a challenging time for inflationary pressures and banking. Now, we can look forward to economic stabilization, and hopefully, a resumption of business as usual.

Information accredited to LPL Financial.

After the first quarter of 2023, it is time to reevaluate market strategies. To update your financial plan for 2023 and the years to come, contact the nationwide advising team at IHT Wealth Management today!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly.

Investment Advice Offered by IHT Wealth Management, a Registered Investment Advisor

While the latest electric vehicle tax credits help auto manufacturers, it will take much more to save the industry from recent challenges.

The automotive industry is at a tipping point, with a growing focus on sustainability and the need to reduce carbon emissions. Electric vehicles (EVs) have emerged as a preferred solution to combat climate change, and governments worldwide are taking steps to incentivize their production and adoption. Companies are responding by pivoting their production lines to focus on EVs – Tesla has become one of the largest companies in the world producing electric cars and domestic stalwarts like GM have announced a total conversion to EVs in their business plans. Government subsidies and tax credits are a significant driver of this strong company pivot.

Subsidies, or financial incentives provided by governments, are a key driving force behind EV production. Subsidies can take various forms, such as direct payments, grants, or discounts on purchase prices; they are designed to make EVs more affordable and competitive compared to traditional gas powered vehicles. In particular, the new tax credits that took effect on April 18th, 2023, are focused on reducing the cost for the end consumer to drive EV demand.

The new electric vehicle tax credits offer up to $7,500 to consumers who purchase a new eligible EVs. Unfortunately for consumers, the range of EVs meeting the regulatory criteria for the credit is narrow. Only a handful of models currently comply with the regulations around where the batteries and parts are sourced. Furthermore, a majority of the vehicles receiving credits are both expensive and in limited supply. The irony is that the funding for these tax credits comes from the Inflation Reduction Act. Rather than helping the inflation-impacted consumer, these subsidies for EVs are more likely to stimulate spending, making it harder for the Fed to reign in the economy. Furthermore, given the prices of the EVs right now, the subsidies will mostly be utilized by individuals with above average incomes – the population least impacted by inflation.

Read the full article in Forbes.

Want to reevaluate your wealth management strategy in 2o23? Contact the nationwide advising team at IHT Wealth Management today!

During the first quarter of 2023, the stock market proved to be quite resilient, despite rising inflation, uncertainty surrounding the Federal Reserve’s policies, interest rate hikes, and banking concerns.

In January 2023, inflationary data seemed to show a possible peak, giving hope that the Federal Reserve would scale back interest rate hikes. However, subsequent inflation data showed prices ramped up again.

Inflation and Banking Challenges Played a Heavy Role on the Economy

As investors responded to interest rate concerns, stocks and bond prices dipped. In addition to the impact of rising inflation, two major banks collapsed in March 2023. As a result, bank stocks dropped further. Along that vein, the first quarter saw the takeover of Credit Suisse Group. Overall, Credit Suisse Group neared failure. Thus, its  rival, UBS Group, assumed control of the bank. Simultaneously, several banks in the United States provided funds to keep First Republic Bank afloat.

Although the banking sector faced its share of challenges, the long-anticipated economic recession has not come to fruition quite yet. Holistically, the labor market remains strong, despite rising inflation. Furthermore, the two primary inflation indicators, the Consumer Price Index and the Personal Consumption Expenditures Price Index, showed prices slowed on an annual basis.

Stock Market Ended First Quarter of 2023 on the Plus Side

Despite all of this apparent turmoil, coupled with the ongoing war in Ukraine, stocks regained their footing. Moreover, stocks ended the first quarter of 2023 on the plus side. The tech-heavy Nasdaq led the benchmark indexes. Additionally, the S&P 500, the Global Dow, the Russell 2000, and the Dow Jones closely followed the NASDAQ. Investors poured money back into Mega cap tech shares, driving them higher during the first quarter of 2023 after an underperforming 2022. Those gains helped drive the Nasdaq and the S&P 500 higher.

Even with investors taking gains from the Mega caps, other market sectors reaped the benefits. Energy stocks, which excelled in 2022, fell in the first quarter of 2023. Also, crude oil prices dropped as well. Conversely, gas prices rose minimally higher, with regular retail prices averaging $3.421 per gallon on March 27, $0.14 over prices on January 4th. The dollar dipped lower, while gold prices rose higher.

Stock Market Enjoys Best January Performance Since 2019

The quarter kicked off with stocks enjoying their best January performance since 2019, as inflation data suggested that inflation may have peaked, raising hopes that the Federal Reserve would scale back interest-rate hikes and temper fears of an economic recession. Nevertheless, Federal Reserve Chair Jerome Powell cautioned that the battle against rising inflation was far from over and additional rate hikes were upcoming. In fact, the Federal Reserve hiked interest rates 25.0 basis points on the last day of the month. Growth stocks performed best, with Mega caps making solid gains.

Consumer discretionary, communication, and tech sectors performed well, while defensive sectors, such as utilities, health care, and consumer staples, dipped lower. Bond prices advanced, pulling yields lower. While 260,000 new jobs were added in December, the growth was the slowest in two years. Average hourly earnings rose to the lowest annual level (4.6%) since September 2021. However, manufacturing declined at the fastest rate since May 2020, while services retracted for the third month running, according to the S&P Global Manufacturing PMI™. Nevertheless, each of the benchmark indexes listed here added value, led by the Nasdaq (10.7%), followed by the Russell 2000 (9.7%), the Global Dow (7.8%), the S&P 500 (6.2%), and the Dow (2.8%). Ten-year Treasury yields fell 35.0 basis points, crude oil prices dipped 1.7%, the dollar slid 1.4%, but gold prices advanced 6.3%.

February 2023 Shows Backslide for Stock Market

Stocks gave up some of their January gains in February, with each of the benchmark indexes losing value. The Dow (-4.2%) fell the furthest, followed by the Global Dow (-2.7%), the S&P 500 (-2.6%), the Russell 2000 (1.8%), and the Nasdaq (-1.1%). Bond prices declined, driving yields higher, with 10-year Treasury yields advancing 39 basis points. Crude oil prices decreased 2.8% to $76.86 per barrel.

The dollar rose 2.8% against a basket of currencies. Gold prices lost most of their January gains, falling 5.7% in February. Consumer prices advanced, with core prices (excluding food and energy prices) climbing 0.6%, the biggest advance since August. Over 500,000 new jobs were added, nearly three times the consensus estimates, and the largest increase in six months. The unemployment rate slid to 3.4%, its lowest level since 1969. Consumer spending rose 1.8%, the most in nearly two years.

March 2023 Outperformed Despite Global Banking Crisis

March was a very choppy month for market returns. Despite an apparent banking crisis, investors stayed the course for the most part, driving stocks mostly higher. The Nasdaq and the S&P 500 led the gainers of the benchmark indexes listed here. Several sectors outperformed, including information technology, communication services, and utilities, while financials fell notably on the heels of the aforementioned bank failures.

Manufacturing retracted, while services advanced, according to purchasing managers surveyed. Labor remained strong, with 311,000 new jobs added. Hourly earnings rose by $0.08 for the month and 4.6% since February 2022. The Consumer Price Index rose 0.4% after falling 0.5% the previous month. The PCE price index increased 0.3% and 5.0% over the past 12 months. The economy advanced at an annualized rate of 2.6% in the fourth quarter, short of the 3.2% increase in the third quarter. Crude oil prices and the dollar declined, while gold prices climbed higher.

Information accredited to Broadridge.

Want to reevaluate your wealth management strategy in 2o23? Contact the nationwide advising team at IHT Wealth Management today!

IHT Wealth Management is a SEC registered Investment Advisor.  The information contained herein has been obtained from sources believed to be reliable, we cannot guarantee its accuracy or completeness neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.

Recently, you may have seen the headlines regarding Silicon Valley Bank collapse, creating implications for the financial system as a whole. If you looked at the performance of the financial sector over the past week or two you’d be excused for feeling a bit of panic. The deterioration in share prices slowly accelerated into a crushing run on two banks in two days. Given the way markets have been fluctuating over the past 18 months and the pressure the Fed has been putting on the market, we can understand how some people might jump to conclusions and think the financial system is finally cracking under the pressure of rate hikes and inflation.

We’re going to dive into this deeper, but lets start this reaction piece off by pressing pause on any panic you might be feeling.

Why Is The Financial Sector Under Pressure with Silicon Valley Bank Collapse

The financial sector has been under pressure as rate hike expectations have come back into focus. While we’ve had plenty of speculation around rate hikes over the past 18 months, the past week or two has seen the 2s – 10s spread expand rapidly. The 2s-10s spread is the gap between 2 year treasury yields and 10 year treasury yields. In normal markets conditions, longer maturity yields are typically higher than short maturity yields – governments or companies who issue debt have to pay more for investors to feel comfortable locking their money up for longer periods of time. However, in the current environment where rapid rate hikes are expected to be temporary, the yield of treasury bonds with shorter maturities is higher than the yield on treasuries with longer maturities.

This spread is important because the spread between long term and short term maturities can have a significant impact on bank profitability. Banks fundamentally operate in the business of borrowing short term money and lending it out to people for longer term projects. The most extreme example taking a customer deposit for say, $500,000, and then turning around and giving another customer a loan for $500,000. The bank has borrowed short term money from the depositor, and lent it out for much longer – for the sake of this example, lets say 10 years. The interest they make on the 10 year loan is used to pay for the bank’s operational costs, drive value for bank shareholders, and of course, pay the customer some interest on their savings account.

Read the full article in Forbes.

Want to reevaluate your wealth management strategy in 2o23? Contact the nationwide advising team at IHT Wealth Management today!

When discussing 2023 inflation trends, we first take a look back at the Federal Reserve’s recent moves regarding interest rates. Last month, the Federal Reserve raised rates by 25 basis points. This stepped down from 50 basis points in December. However, the latest strong batch of economic reports suggest that 50 basis points returned to the table.

Examining the Future Beyond 2023 Inflation Trends

Regardless of whether the Federal Reserve raises rates by 25 or basis points, investors need to ask themselves about where the United States economy will head over the course of the next 6-12 months. Furthermore, what does the terminal rate look like for interest rates? Will it be 4.75%, 5.0%, or 5.25? Currently, any of these numbers is in play. Additionally, most fixed-income investors should feel capable of handling these rate increases.

However, in the event that the Federal Reserve feels the need to increase the federal funds rate beyond 5.25%, this causes greater challenges for investors and the United States economy as a whole. Rates at 6.0% and 6.25% create more cause for concern.

Understanding the Federal Reserve’s Inflation Strategy

This past week, the Produce Price Index, inflation figures, and consumer spending figures came in stronger than anticipated. For instance, the Producer Price Index rose 0.7% month-over-month in January. This exceeded the 0.4% increase consensus forecast. Ultimately, this data does facilitate concerns over the “stickiness” of inflation.

Overall, the Federal Reserve’s hands are somewhat tied. Not only are they combatting inflation, they are dealing with expectations of future inflation as well. Food prices, fuel prices, and other volatile market sectors contribute to higher inflation expectations. In another example, housing prices facilitate further inflation. Since the Great Recession, the United States dealt with a shelter shortage. To make matters worse, raising interest rates further increases prices related to home construction, skilled labor, and material costs.

Best Practices for Dealing with 2023 Inflation Trends

Despite these challenges, inflation will eventually come down. At present, the economy is facing a lag effect from the Federal Reserve’s periodic rate increases. Even by the end of 2023, it is unlikely that the Federal Reserve will begin to cut interest rates due to this lag effect. Crucially, the Federal Reserve wants to “beat” inflation the first time around, as opposed to pausing or scaling back interest rate hikes only to redo them later down the road.

In the meantime, the bond market should see plenty of activity, making banking stocks and investing vehicles attractive. Simply put, they do not face the same wage pressure that other sectors, like restaurants and bars might. As for the ongoing concerns regarding the tech sector, this market segment proved time and time again to find new ways to drive margins, even in tough times.

Watch the full interview on YouTube.

To reevaluate your inflation strategy in 2023, contact the financial advisors at IHT Wealth Management.

In the penultimate week of 2022, the stock market experienced typical end of year volatility. Generally, this resulted in stocks rounding out the week at a lower point.

Investors React to Inflation Data Amidst End of Year Volatility

Notably, the latest inflation data came out last week, sparking the end of year volatility. According to the Bureau of Economic Analysis, inflation rose by only 0.1% in November 2022.

Now, investors digest this information while simultaneously anticipating the Federal Reserve’s response. After more than a year of record inflation levels, investors hope this marks the latest sign that inflationary pressures reached their peak. If this is the case, the data might influence the Federal Reserve to scale back its interest rate hikes.

China Experiences Surge in COVID-19 Cases

Further fueling the end of year volatility, China revealed news of their latest surge in COVID-19 cases. Due to this news, investors potentially expect further government-imposed lockdowns. If this occurs, the lockdowns hold heavy potential to influence the global economy.

Diving into the numbers, Ten-Year Treasury Yields advanced the most since April 2022. Meanwhile, the dollar edged lower. On the other hand, gold prices climbed higher. Finally, crude oil prices increased for the second week in a row. As a result, crude oil prices approach $80.00 per barrel.

Eye on the Week Ahead After End of Year Volatility

Despite last week’s end of year volatility in the stock market, trading tends to die down during the final week of the year. Typically, investors take a break while preparing for the new year.

Additionally, very little economic reporting comes out between Christmas and New Year’s Day. In the meantime, investors look towards the Federal Reserve for updated projections on their increases to the federal funds rate.

To reevaluate your financial goals in 2023, contact the financial advisors at IHT Wealth Management.

Want to read about the rest of the week ending on December 17th? Explore our additional resources below.

Information accredited to Broadridge.

After a year of record inflation levels, November 2022 Personal Income rose. On the contrary, manufactured durable goods faced a decrease after three months of increases. Finally, the latest report from the U.S. Energy Administration showed that gas prices slid last week.

Consumer Spending Rises with Personal Income Increase

Personal income and disposable (after-tax) income rose 0.4% in November, according to the latest data from the Bureau of Economic Analysis. Consumer spending, as measured by personal consumption expenditures, rose 0.1%.

Consumer prices edged up 0.1% in November. Prices, less food and energy, increased 0.2%. Since November 2021, consumer prices have increased 5.5%, lower than the 12 months ended in October (6.1%).

Decrease in November Manufactured Durable Goods as Personal Income Increases

Aside from the November 2022 Personal Income data, new orders for manufactured durable goods decreased 2.1%. This follows three consecutive monthly increases. Excluding transportation, new orders increased 0.2%.

On the other hand, excluding defense, new orders decreased 2.6%. Transportation equipment drove the decrease in new orders, falling 6.3% following three consecutive monthly increases.

Gas Prices Slide According to the U.S. Energy Administration

Retail prices for regular gasoline continued to slide last week. According to the U.S. Energy Administration, the national average retail price for regular gasoline was $3.120 per gallon on December 19, $0.119 per gallon below the prior week’s price and $0.175 lower than a year ago.

Also as of December 19, the East Coast price decreased $0.107 to $3.118 per gallon; the Gulf Coast price fell $0.086 to $2.641 per gallon; the Midwest price declined $0.123 to $2.911 per gallon; the West Coast price dropped $0.164 to $3.983 per gallon; and the Rocky Mountain price decreased $0.141 to $3.086 per gallon. Residential heating oil prices averaged $4.606 per gallon on December 19, $0.261 above the previous week’s price and $1.262 per gallon more than a year ago.

To discuss your portfolio management strategy for 2023, contact the financial advisors at IHT Wealth Management.

Want to read about the rest of the week ending on December 17th? Explore our additional resources below.

Information accredited to Broadridge.

Last week, the third-quarter GDP data came out. In the final estimate for third-quarter gross domestic product, the latest data told the story of an accelerating economy.

Third-Quarter GDP Exceeds Expectations

The final estimate for the third-quarter gross domestic product showed the economy accelerated at an annual rate of 3.2%. Thus, the third-quarter GDP figures exceeded expectations.

Earlier in 2022, GDP declined 1.6% in the first quarter. Similarly, it fell 0.6% in the second quarter of 2022. That said, this most recent report reflects a break in the pattern.

Exploring the Increase in Third-Quarter GDP Data

When exploring the increase in third-quarter GDP data, the story begins with advances in exports. Likewise, federal, state, and local government spending also rose alongside consumer spending. Last but not least, nonresidential fixed investment climbed.

However, these increases faced offsetting pressure by decreases in residential fixed investment and private inventory investment. Imports, which are a negative in the calculation of GDP, decreased. The personal consumption expenditures price index, a measure of inflation, increased 4.3% in the third quarter, lower than the 7.1% advance in the second quarter.

GDP Rises Alongside Stock Market Volatility

Overall, the stock market experienced a great deal of volatility in the penultimate week of 2022. However, investors keep their eyes on the latest inflation figures, which indicate that the Federal Reserve’s increases to the federal funds rate are reducing inflationary pressures.

Also worth noting, China experienced a surge in COVID-19 cases. This does indicate the possibility of another lockdown. Such an event would influence the global economy, potentially impacting the first-quarter GDP figures in 2023. However, after declines in the first two quarters of 2022, the third-quarter GDP report shows that the economy is once again beginning to accelerate heading into the new year.

To discuss your portfolio management strategy for 2023, contact the financial advisors at IHT Wealth Management.

Want to read about the rest of the week ending on December 17th? Explore our additional resources below.

Information accredited to Broadridge.