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This is a time of year to be thankful. It can be difficult if you look at day to day indices that can reflect so much volatility and disruption. Let us take a look over 2022, and be thankful for where we seem to be heading:
Stock Market
· DOW – Started at 36,322 now at 34,500
· S&P – Started at 4,797 and now at 4,080
· NASDAQ – started at 15,833 and now at 11,408.
Conclusion – Technology sector has gotten hammered.
Federal Funds Rate- Basically, started at zero and now around 4.0%. It is likely to go higher, but the Federal Reserve is indicating a rate increase slowing to 0.50 bps from 0.75 bps that we have been experiencing.
Ten-year Treasury - 1.61% to 3.58% (high of 4.25%). This is the bellwether that the commercial real estate investors rely on.
30-year mortgage - 3.2% to 6.58 % (high of 7.08%). Twice as costly to own a home in an environment where affordability is challenging whether you own or rent.
COVID Cases - Beginning of the year there were 1,667,151 active cases, latest report 296,882 active cases. Vaccinations and masks helped us course correct. Will China learn from the West?
Crime Rate (Atlanta) – murders up 43% to a 30 year high; rape up 236%. The police department is down 350 officers…not a popular job, and people are not appreciating the importance of their role.
Brent Crude Oil per barrel - Started at $78.98 per barrel and now at $82.83/barrel (high was $115/barrel)
Gas Prices per gallon - $3.38/gallon and today at $3.69/gallon (high was $5.11/gallon). Finding stabilization.
Inflation - June saw a 40-year high with an average rate of 9% year over year. Bread, eggs and wages…everything is more expensive.
Unemployment Rate - Started around 4.0% and has fallen slightly to 3.7% - still a hot economy, but several layoff announcements from major corporations will see this number trend upwards. Even if it reaches 5%, this is a healthy rate.
Bitcoin - Started at $37.983 and today at $16,222 (high for year was $61,837). We distribute U.S. Dollars to our investors.
Summary
It seems like the economy is turning the corner after some bad numbers experienced during the summer of 2022. While the economy is not out of the woods yet, it would appear inflation is coming under check, and the capital markets will be adjusting for the new normal toward the middle part of next year, if not sooner.
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