Dear Kris-

I’d like to introduce you to the newest addition of my family, Milena Zoe. Born January 16th, weighing in at 8 lbs. 15 ounces.

She has her days/nights flipped, but our home life has been simply amazing. 🥰

In last month’s poetic recap, I closed with saying there are several data points we believe may set the next bull market (positive economic growth) cycle.

To celebrate the addition of my 5^th child, below I will share the 5 points we believe are key for this growth cycle kick-off.

1)     Yield curve – Negative and still signaling a restriction to future growth. We’re looking for this to be less negative and improving.

2)     Leading Indicators – Clearly show a slowing, but data points have improved. More work here is needed.

3)     Wage inflation – Higher than policymakers prefer, and sticky. The Fed is targeting 2% while the most reading came in over 5%. 

4)     Fed policy – I have been in the #RatesHigherForLonger camp for a while. Recent data suggest inflation might reaccelerate 😧

Fed Chair J. Powell has been clear he does not want a repeat of the 70s, and his peers are gently reminding markets that higher rates will be with us for longer. 

5)     Behavior – the recent bounce in risk assets has been impressive. But we’ve seen this action last June, August, and November. Bear markets bounce, and experience shows they are a process rather than a one-off event. 

With the less bad news behind us, we may be presented with opportunities in the coming months to take on risk more favorably. More to come on this!

My next note will explore January’s jobs report since it was a massive 517k jobs added, blowing out street expectations of 185k.

Can a recession exist with such a strong job market? You may find that one interesting 😉

P.S. Tax season is here! Over the next weeks, I’ll be reaching out to help you coordinate documents and make this time of year easier for you.

As always, if there is anything I or my team can do for you, let me know. 

Head on a swivel and always ready -

Krzysztof 'Kris’ Garlewicz

Relationships 1^st – Lifelong Learner – Tenacious

Helping people define their Financial Freedom. Visit us at www.ProsperiFi.com

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