The Sahm rule predicts the onset of recessions based on the trend in unemployment. Developed by former Federal Reserve and White House economist Claudia Sahm, it signals the onset of a recession when the three-month average unemployment rate rises 0.5 percentage points or more above its lowest point in the past year.
To paraphrase Ernest Hemingway, shifts in the stock market often occur “gradually, then suddenly.” Over the past month, the market has rotated from large cap technology stocks to small caps and other sectors. Following the latest jobs report, however, stocks experienced a sharp pullback due to concerns over the timing of Fed rate cuts, a weakening labor market, and tech earnings. Financial markets are on edge as investors adjust to a potentially changing economic landscape.
It’s a topic we’ve covered before: investing during an election year can be tough on the nerves, and 2024 promises to be no different. Politics can bring out strong emotions and biases, but investors would be wise to put these aside when making investment decisions.
Cash is an essential part of any financial and investment plan. It's important to have enough cash to serve as an emergency fund in case of unexpected personal events such as injury or illness or broader events such as an economic downturn. From an investment standpoint, cash can also serve important roles including reducing overall portfolio risk and by allowing investors to take advantage of attractive market prices.
1Q24 Earning Season Takeaways: Mega-Cap Tech, Business Capex Spending, Consumer Behavior, and Earnings Growth Trends. See it all here!
Sharing some of my favorite charts from J.P. Morgan's Guide to the Markets- Part 2. With a shifted focus on fixed income. We'll look at Fixed Income Market Dynamics, Fixed Income Valuations: Yield-to-worst across fixed income sectors, and Sources of Bond Total Return.