Dear Towerpoint,


Amazing what a difference just 14 days makes.


Last week:




This week:


Image result for market pullback quote


The S&P 500 and the DJIA have now rallied for five consecutive sessions since precipitously falling into correction territory just last week, with both indexes up 4% and on track for their biggest weekly percentage rise since November 2016. The Nasdaq is up over 5%, representing its best week since October 2014.


Concerns about inflation and higher interest rates seemingly were the catalyst for last week's quick, sobering, and unexpected market pullback, but we simply do not see the same degree of inflationary pressures that many popular financial news outlets seemingly tout with every story. While there has been a slow and meandering rise in prices over the recent past, we do not believe in getting overly concerned just yet. Perhaps the sheer novelty of any inflation at all, given the past several years of levels close to zero, has driven the recent narrative.


Image result for inflation


Nothing in the economic data strikes us as compelling enough to believe the headwinds that have held inflation in check for some time now will recede, putting us somewhat at odds with the nearer-term market consensus. Given the market environment, we expect any Fed rate hikes to continue to be gradual - unlike in past cycles, the Fed feels little pressure to adjust rates quickly because it is not “behind the curve” on inflation. Obviously these inflationary data points will vacillate over the next few quarters as they always do, but with respect to the levels of inflation that would lead to meaningfully higher interest rates, we just do not see them coming.


Shifting gears, we encourage you to take three or four minutes to review the curated content found below, highlighted by:

  • KXTL FOX40's story last week on the recent stock market volatility, featuring Towerpoint Wealth's own, President Joseph Eschleman
  • An Investment News article discussing how the big brokerage industry continues to fight the obligation for their brokers to act in the best interests of their clients.
  • An excellent synopsis of what to consider if you are planning on doing your 2017 income taxes on your own.

Lastly, on Monday please take some time to reflect upon the great leadership that shaped the fabric of our country as we celebrate President's Day. Not only is it a great holiday for learning about American history, but it also is an excellent day for financial lessons as well. That is because both George Washington and Abraham Lincoln weren’t just great figures, they are also members of a select group of foundational leaders who were notably savvy money managers. Read more here in this well-written article:


http://time.com/money/3707291/financial-lessons-washington-lincoln-money/


The world is complicated. We encourage you to call (916-405-9140) email (info@towerpointwealth.com) or Tweet (@twrpointwealth) us with any concerns, questions, or needs you have - we are here for you, and look forward to connecting with, helping, and being a direct, fully independent, and no-strings-attached expert financial resource for each of you.


- Joseph and the Towerpoint Wealth team


     
     
     
    TPW Original Content
     
     
    * Towerpoint Wealth's president, Joseph Eschleman, was the featured guest last week in reporter Ali Wolf's Fox40 story about how to survive the recent stock market volatility. * Eschleman...
     
     
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