Inflation: The Consumer Price Index for April was released May 11. The rate came out at 8.3% from a year ago. The consensus was 8.1%. The previous months rate was 8.5%. The debate currently is, has inflation peaked or will we see inflation continue to increase? One thing I do believe is, I don’t expect it to drop significantly in the next 3-6 months.
Interest Rates: The Fed will likely raise rates another .50 basis points next meeting on June 14-15and is expected to do so again in July with the goal to bring down inflationary pressures. I will keep you posted on the market reaction and outlook next month.
Bear Market: There have been a lot of bear markets over time, but one thing that has always happened is, stocks have eventually come back to new highs. We don’t know when this recovery will happen but do expect It to happen.
The Bottom Line: Volatility will remain until the markets get a better grip where inflation and earnings will land over the next several months. We are keeping a low equity exposure for now in Energy and low-priced dividend cash paying companies.
As always, we will continue to monitor the markets and your investments daily and will continue to make any needed changes.