Vacation at the Beach or Summertime Blues?

As we reflect on the first half of 2024, the broad market averages have shown promising returns. However, beneath the surface, there are signs of underlying weakness. The market’s breadth appears insufficient to sustain its current momentum into the second half of the year. For the market to thrive further, we anticipate a broader base of support beyond the recent surge driven by AI technologies.

In terms of U.S. economic performance, there are positive indicators. Second-quarter GDP growth is projected at 2.2%, and year over year company profits are expected to rise by 10% by the end of June. Moreover, the Personal Consumption Expenditures Price Index, a key measure of inflation favored by the Federal Reserve, has decreased to 2.4%. This aligns with the Federal Reserve’s goal of achieving a soft landing for the economy.

Despite these domestic successes, global risks loom large. Recent EU elections hint at potential shifts in European governance. Additionally, supply chain disruptions are emerging due to geopolitical tensions such as the Yemeni conflict affecting access to the Suez Canal, thereby escalating shipping costs. Ongoing conflicts in Ukraine and Gaza also pose threats of broader regional instability. Notably, the upcoming U.S. elections in November add another layer of uncertainty to global markets.

Our approach remains steadfast in prioritizing the protection and growth of your assets. We maintain a cautiously optimistic outlook, anticipating potential Federal Reserve actions to lower interest rates through adjustments in the overnight lending rate. While initial market reactions to such changes may be volatile, lower interest rates are poised to stimulate sustained economic expansion.

Amidst these dynamics, we are committed to supporting your financial journey. Our dedication includes leveraging tools like the eMoney retirement planning tool to ensure your retirement plans are robust and tailored to your needs. Please reach out to schedule a consultation at your earliest convenience. This service is provided at no cost to you, reflecting our commitment to helping you achieve a secure and fulfilling retirement.

Very Truly Yours,

Michael F Cantlon
Thomas E Guyett
Robert Gephart