Prosperity Partners Private Wealth Management

The Fed and the Punch Bowl In a speech given nearly 70 years ago, then-Federal Reserve Chairman William McChesney Martin Jr. made a now-famous analogy when he said that during an expanding economy, the Fed should “remove the punch bowl” before the party gets out of hand. First things first, on Wednesday, the Fed reduced its key rate, the fed funds rate, by a quarter of a percentage point to 4.25 – 4.50%, as expected. It’s the third Fed rate cut in as many meetings. Read the full analysis on our website...

🎄✨ From all of us at Prosperity Partners, we wish you a Merry Christmas and a joyful holiday season! 🌟 Thank you to for your continued trust and support. We’re so grateful for the moments we’ve shared this year and can’t wait to see what the new year brings! 🎁🎉 Wishing you peace, happiness, and special memories with those you love. #MerryChristmas #HappyHolidays

Sticky Inflation The monthly numbers are out, and while the rate of inflation is well off the 2022 peak, price hikes remain uncomfortably high. The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) and the core CPI, which excludes food and energy, both rose 0.3% in November. The CPI is up 2.7% versus a year ago. The core CPI held at 3.3% in November. And that illustrates a problem. Inflation has gotten stuck at a still-elevated level. Read the full analysis on our website...

Job Growth and Economic Growth On Friday, the U.S. Bureau of Labor Statistics (BLS) reported that nonfarm payrolls rose by 227,000 in November, which came in just above the consensus forecast of 214,000 (CNBC). The unemployment rate, measured by a different BLS survey, ticked up to 4.2% from 4.1%. November’s increase was a recovery from just 36,000 in October, when hurricanes and Boeing’s (BA $154) strike negatively affected the data. In part, November represented a catch-up. Read the full analysis on our website...

Another Strong Earnings Season Our discussions have included Fed policy, the economy, and the surge in inflation since the pandemic. Why? In large part, they are all a part of the stock market pricing equation. Yet, so are corporate profits, and profits for the largest U.S.-based companies are heavily influenced by economic activity. Undoubtedly, there are a few companies that execute well in most environments, while others reside in industries that are more resilient to economic downturns. Read the full analysis on our website...

Happy Thanksgiving from all of us at Prosperity Partners! 🍂🦃 We're so grateful for our amazing team, clients, and supporters. Wishing you a holiday filled with warmth, gratitude, and good company! #Thanksgiving #GratefulHeart

Does a Republican Sweep Matter for Investors? Tables and graphics such as the one below typically surface every four years. While they are interesting, they do not provide much insight, except for the idea that stocks tend to perform well regardless of who occupies the White House and Congress. Read the full analysis on our website...

Inflation—Not Back to Target, Not Enough to Derail a December Rate Cut The Consumer Price Index (CPI) rose 0.2% in October, according to the U.S. Bureau of Labor Statistics. The core CPI, which excludes food and energy, rose 0.3% last month. The CPI is up 2.6% compared to one year ago, and the core CPI is up 3.3%. After reviewing the details, let’s look at the trends. As previously mentioned, the annual core rate was 3.3% in October, which remains the same as it was five months ago. Read the full analysis on our website...

A Drama-Free Fed Meeting, Press Conference* and the Election More about the asterisk in a moment, but first, let’s touch on the meat and potatoes of last week’s Federal Reserve meeting. It came as no surprise that the Fed reduced its key rate, the fed funds rate, by 25 basis points (bp, 1 bp = 0.01%) to a range of 4.50—4.75%. That follows the Fed’s 50 bp rate cut in September. At his press conference, Fed Chief Jay Powell did not commit to another reduction in interest rates at the December meeting, but he strongly signaled that the general path is lower. But if economic growth is strong, why cut interest rates? “It's actually remarkable how well the U.S. economy has been performing,” Powell said. Despite a generally positive economic outlook, the Fed believes interest rates are too high, discouraging consumer and business borrowing. In turn, this could slow economic activity too much and increase the unemployment rate. Read the full analysis on our website...

A Robust GDP and Muddy Jobs Report The U.S. Bureau of Economic Analysis (BEA) reported that Gross Domestic Product (GDP) expanded at an annual pace of 2.8% in Q3, which was down from 3.0% in Q2. The broadest measure of U.S. economic activity matched the final report from the Atlanta Fed’s GDPNow model and came in slightly below economists’ projections of 3.1% (Wall Street Journal). GDP continues to expand at a strong pace despite the high cost of borrowing cash. Notably, consumer spending, which accounts for nearly 70% of GDP, powered growth last quarter, contributing 2.5 percentage points to GDP. Led by defense spending, overall government outlays for goods and services supported economic activity. AI also generated big gains in business spending. Read the full analysis on our website...