The Ripple Effect: Navigating Volatility with Confidence

Hey there, folks! Can you believe we’ve reached the end of the second quarter? Congratulations to all of us! Let’s take a moment to reflect and reinforce our commitment to having a plan and sticking with it.

The market has been on a continuous upward trend in 2023, and interest rates have been climbing alongside it. The recent GDP numbers exceeded expectations, leading us to price in a high probability of a rate hike at the next Fed meeting, and a better than 50% possibility of two hikes this year. This aligns with expectations of a strong economy, where managing inflation becomes more challenging and justifies higher rates. However, we can’t forget the market struggles we witnessed last year when interest rates rose rapidly. It’ll be interesting to see if the recent uptick in rates has any impact on stock prices in the near future.

In times like these, it’s crucial to keep your plan simple. Remember, stocks tend to perform well in the long run, but volatility spikes are inevitable. While higher rates present a headwind, we must always consider the context: rising rates are often indicative of a robust economy, and stocks thrive in such conditions. Take note that the 2/10 curve has hit a new low in its inversion.  A recession won’t be confirmed until the curve unwinds and returns to its normal shape.

Today, keep a close eye on the S&P 500 for the JPM trade. This substantial trade has been eagerly anticipated by market makers throughout the month, and it’s likely to have a significant impact on the market once it kicks in.

As we navigate the financial landscape, let’s stay focused, stick to our plans, and approach each twist and turn with confidence. Remember, the ripple effect of our decisions can shape our financial future. Embrace the challenges, adapt to the changing dynamics, and stay committed to your long-term goals.

Wishing you all a successful and fulfilling journey in the market!