Ready to schedule an appointment?

GET STARTED

Surviving Markets and Hurricanes

I would like to thank all of my clients and friends who reached out to me and my wife during a very scary week. Hurricane Ian made landfall near Ft. Myers and Cape Coral on Wednesday afternoon as a category 4 hurricane. It has been called one of the worst to hit the state of Florida. We suffered minor yard damage but the real devastation occurred all along the coast of southwest Florida. Ft. Myers Beach, Captiva Island, Sanibel Island and Pine Island all suffered what one news reporter called a “catastrophe of biblical proportion.” Our hearts and prayers go out to all of those impacted by this natural catastrophe.

No delivery of my morning Wall Street Journal. No electricity for several days. No internet until Friday, and I am still getting voice messages and texts from four days ago. To say I was out of contact for most of the week would be an understatement. Fortunately, my Chicago partner, Tom Parker as well as my two superb team members, Diana Kirtland and Elisa Bolander handled things extremely well. I am very thankful for all of their support.

When I finally logged on Saturday to see what the week brought, I see more of the same we’ve been experiencing all year long; persistently strong inflation and the fear of a pending recession. As much as we have to worry about here in the U.S., things appear to be much worse in many other developed nations. China is experiencing an economic slowdown due to Beijing’s “zero-tolerance” Covid plan which shuts down large sections of their country for weeks at a time. Europe is fearing a harsh winter that could see energy prices skyrocket even higher. Already many governments are capping the cost of energy to consumers. How global markets will react to this remains to be seen. Finally, newly elected British Prime Minister, Liz Truss’s recent announcement of an “unfunded” tax cut amounting to about 1.8% of the U.K.’s annual GDP. The cost of the tax cut will come on top of the already announced $140 billion subsidy of energy costs for households and businesses.

In light of all of this, we are actually pretty well off economically speaking. Jobs are still plentiful. Gasoline prices have come back down to earth, and the amount of money in circulation as measured by M2 is still near historical levels.

We closed out the third quarter with a loss that wasn’t as bad as the second quarter but slightly worse than the first. And, as usual at this point in a brand-new quarter, we turn our attention to third quarter earnings. Those will start being reported next week. The chart below from FactSet shows an estimated decline of earnings for S&P 500 companies of about 6.6%.

If you have any questions, please contact me.

The Markets and Economy

 

  • Rents fall for the first time since late 2020. While the decline is minor, it offers the prospect of relief to millions of tenants who have seen skyrocketing rent increases during the pandemic.

 

  • During the Great Resignation, the rate at which workers quit their jobs in the S. reached a 20-year high. The top three reasons cited were 1) low pay (63%) 2) lack of opportunity for advancement (63%) and 3) feeling disrespected at work (57%). From a survey conducted by Pew Research.

 

  • Good news for Medicare members! Monthly premiums for 2023 will be $5.20 less than they were in 2022. The reduction, which was announced earlier this year, comes after a large spike of 14.5% in 2022. New premiums will be $164.90 starting in 2023.

 

  • The Organization for Economic Cooperation and Development said it estimates that Russia’s invasion of Ukraine will cost global economies $2.8 trillion in lost output by the end of 2023. If Europe experiences a harsh winter where energy rationing occurs, the figure could go higher.

 

  • The three most affordable housing markets in the S. are Pittsburgh, PA, Oklahoma City, OK and Rochester, NY, according to Aspen Ideas.

 

  • 30 years ago, 37% of all semiconductors were manufactured in the S. Today, just 12% of semiconductors are produced domestically.

 

NATO said sabotage attacks on the Nord Stream would result in a collective response from its military alliance. Details weren’t provided but the natural gas pipeline is crucial to European countries as winter approaches.

Offices in Chicago, Naples & Valparaiso.

 

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

 

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results.

 

This newsletter was prepared by David M. Kover®. To unsubscribe from the Weekly Market Update please write us at 555 Eastport Centre Dr., Suite B, Valparaiso, IN 46383 or click this link:  Unsubscribe .

 

Note: All figures exclude reinvested dividends (if any). Sources: Bloomberg, Dorsey Wright & Associates, Inc. and The Wall Street Journal. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

 

Securities offered through Triad Advisors, LLC, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, LLC, an SEC-registered investment adviser. Resources Investment Advisors. LLC and Vertical Financial Group are not affiliated with Triad Advisors, LLC.

David M. Kover, Thomas H. Parker, Bradford E. Harris, Laura T. Scobee, Joseph B. Thaman & Brett M. Dankowski are registered to recommend securities offered through Triad Advisors, member FINRA/ SIPC. Investment advice offered through Resources Investment Advisors, Inc., an SEC-registered investment adviser. Resources Investment Advisors, Inc. and Vertical Financial Group are not affiliated with Triad Advisors.