Earlier this week a member of our investment team, Aaron Filbeck, attended JPMorgan’s two-day Wealth Management Summit in New York City. The Summit was a chance to meet with JPMorgan’s portfolio management teams, dig into investment processes, and discuss the current state of the markets. In addition to hearing from fund managers, Aaron also had the opportunity to attend a presentation and Q&A session with Jamie Dimon, JPMorgan’s Chief Executive Officer.

Yesterday a client asked, “Why was the market down today?”  Our response was “Because it’s October.” The response was not mean to be flippant – October is a month notorious for market volatility. We share with you today a graph reflecting the S&P 500 historical seasonal pattern along with an interesting chart displaying the S&P 500 average performance in presidential election years. 

This past weekend, an article appeared in The Columbus Dispatch written by Todd Walter, Client Advisor and Director of Advisory Services at The Joseph Group. In case you missed it, Todd discussed the work of Senator William Roth, a legislative sponsor of the Taxpayer Relief Act of 1997. That legislation produced one of the great financial planning tools of this generation – the Roth IRA. Today we share with you the many benefits of a Roth IRA, applicable to individuals throughout all stages of life.

Earlier this week the Federal Reserve voted to keep short term interest rates unchanged from their current target range of (0.25% to 0.50%).  The market reaction to the “hold” was positive as stocks, bonds, real estate and commodities all rallied after the Fed’s announcement on Wednesday and continued to rally on Thursday.  The market clearly likes the idea of low interest rates continuing to stimulate the economy – the Fed is not taking away the punch bowl yet.

Earlier today, a voting member of the U.S. Federal Reserve (Boston Fed President Eric Rosengren) made statements which created a strong market reaction.  According to Rosengren, the Fed believes continuing to keep interest rates low may present “longer-term risks from significantly overshooting the economy’s growth.”  As a result he stated “a reasonable case can be made for continuing to pursue a gradual normalization in monetary policy.” Members of the Fed seem to always speak in confusing sentences and big words, but to the financial markets, Rosengren’s words meant one thing…

With stock indexes hitting new highs this week, it is worth taking a closer look at what areas are leading the U.S. stock market.  The stocks leading the market during the last six to seven months are very different than the stocks which led the market last year. It may take an increase in interest rates for market leadership to shift again, but when it comes to valuations, there is risk that FANG may bite back against the RUST.

Tonight marks the opening ceremony for the 2016 Summer Olympic Games and for the next two weeks, the world’s focus will be on the games in Rio de Janeiro, Brazil.  While people are flipping around their TVs trying to see if Michael Phelps or the U.S. men’s basketball team will win a gold medal, they are likely to see more “green” as they flip past the financial news.  That’s because history shows the stock market tends to go up during the summer Olympics.

Yesterday we held our monthly “Portfolios at Panera” event – a time for clients and friends to have a casual discussion about what is happening in markets.  Our focus yesterday was going through different strategies and looking at the performance leaders and laggards to identify common themes.  If there was one major theme which might summarize the whole discussion it was “the search for income.”

As discussed in last week’s issue of Wealth Notes, positive surprises in recent economic data have coincided with new stock market highs. However, we note certain technical indicators are throwing up caution flags regarding how much higher the market may run. The aptly named “Smart Money/Dumb Money” Confidence indicator is one of our favorite measures of investor sentiment. The indicator uses “real money” gauges to track what different groups of investors are actually doing with their money. Oftentimes the behavior of the indicator is simply noise, but extreme movements incite awareness.

After more than a year of treading water the S&P 500 finally moved above its former all-time high of 2135 (set May 21, 2015) this week to set new all-time record highs.  Being only two weeks removed from the “Brexit” market turmoil, setting new highs has seemed to take most investors by surprise. It’s probably not hard to come up with reasons for market caution (we’ve heard there is a presidential election coming up this year) but we are definitely struck by the strength we have seen in recent U.S. economic data.  In this issue we share what we are seeing with three major pieces of economic data.