Weekly Market Updates – November 21, 2022

November 21, 2022

The Markets

Thanksgiving and football go together like turkey and stuffing.
 
For some families, though, this year may be more like a turducken, stuffed with American football and the sport the rest of the world knows as football (soccer). The men’s World Cup, which is played every four years for national glory, the Jules Rimet trophy, and millions of dollars in prize money, began on Sunday and will end on December 18.
 
During the tournament, researchers may track the influence of sentiment on markets. According to Mark Hulbert of MarketWatch, previous research has found that a team’s performance – especially a loss – can have a short but powerful effect on the national mood.
 
“You would be excused for being skeptical that a soccer tournament has anything to do with the stock market. But you need to understand how disheartened a country’s investors can become after their team loses in the World Cup. A significant body of academic research has found that their dejection has a pronounced impact on the stock market,” reported Hulbert. “…our moods play a powerful role on our investment decisions. We tell ourselves that we base our portfolio decisions solely on sober and rational analysis. As the academic research into the World Cup Effect reminds us, this isn’t always so.”
 
Investors in the United States were a bit dejected last week. Stronger-than-expected retail sales in October indicated consumer demand remained strong, despite the Federal Reserve’s efforts to slow spending by raising rates. Hawkish commentary from multiple members of the Federal Reserve also affected markets as it suggested the Fed is not ready to pause its inflation fight any time soon, reported Ben Levisohn of Barron’s.
 
Last week, major U.S. stock indices moved lower, and yields on shorter-term Treasuries moved higher. The yield on a 2-month Treasury bill finished the week at 4.2 percent, while the yield on the benchmark 10-year Treasury ended the week at 3.8 percent.

Through the end of 2022, we expect there will be predictions about the war in Ukraine, the likelihood of recession, changes in energy supplies, and much more. If you have any questions about how our changing world may affect your financial goals and investment portfolio, please let us know.

Weekly Focus – Think About It

“It’s tough to make predictions, especially about the future.”
—Yogi Berra, baseball player, manager and coach

Required Disclosures:
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
https://www.sportingnews.com/us/soccer/news/world-cup-winners-prize-money-purse-teams-players-qatar-2022/uw8fhhfqczen1nxsuicczreu
https://www.marketwatch.com/story/why-the-stock-market-gets-a-red-card-during-soccers-world-cup-11666051089
https://www.barrons.com/articles/stock-market-dow-nasdaq-sp500-recession-interest-rate-hikes-51668818597?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/11-21-22_Barrons_The%20Stock%20Market%20Has%20Stopped%20Worrying%20About%20the%20Fed_3.pdf)
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202211
https://www.flickr.com/photos/jonbrown17/2571144135/sizes/o/in/photostream/
https://www.youtube.com/watch?v=YwELr8ir9qM
https://www.ethicalmarkets.com/wp-content/uploads/2018/09/Should-business-tackle-societys-problems-HBR.pdf
https://www.ontheissuesmagazine.com/1996fall/f96_Stahura.php
https://www.goodreads.com/quotes/261863-it-s-tough-to-make-predictions-especially-about-the-future