Market Drama

Featuring Zoe CEO & Founder, Andres Garcia-Amaya, CFA

November 28th, 2022 

Watch Time: 4 minutes

Welcome back to Zoe’s weekly Market Drama series.

  • Last week, the S&P 500 was up 1.5%. It’s now up 11.5% for the quarter, even though it’s still down 14.5% for the year to date.
  • Federal Reserve’s minutes were out, and there were some interesting commentaries.
    • Fed committee members showed concern that if the aggressive hike pace continues, the financial system could be at risk.
    • They’re expecting a recession as the base case, which is kind of crazy since they continue hiking interest rates (in prior cycles, the Fed would hike rates to avoid a recession).
Earnings:
  • Growth year-over-year for the third quarter was worse than expected: 2% (forecast was 9%). 
  • For the fourth quarter of this year, consensus estimates are -2% (would be the lowest YoY quarter number since Q3 2020, when COVID hit).
  • Why is this relevant? Earnings are the number one driver of market returns in the long run. Companies could pass on some of that inflation cost to the consumer. If prices keep rising for the consumer, demand could be affected.
What to look out for this week? 
  • November payroll numbers come out, as well as average hourly earnings, on Friday.
    • These numbers give us a sense of the labor Market Slack. The Fed’s looking for more slack, rather than less slack of employment,
    • The average hourly earnings give us a sense of wage growth, which had been low for decades and now has gone up a fair bit.

– Andres

Disclosure: This material provided by Zoe Financial is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Nothing in these materials is intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Zoe Financial is not an accounting firm- clients and prospective clients should consult with their tax professional regarding their specific tax situation. Opinions expressed by Zoe Financial are based on economic or market conditions at the time this material was written.  Economies and markets fluctuate.  Actual economic or market events may turn out differently than anticipated.  Facts presented have been obtained from sources believed to be reliable.  Zoe Financial, however, cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. 

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