There are a lot of important considerations to weigh before doing a Roth conversion. As a result of the current market condition and changes due to the SECURE Act, Roth conversions are becoming an important strategy. This flowchart addresses some of the major decision points to help guide you through the conversation.
More news about the Omicron variant caused volatility in the markets again with whipsaws back and forth. The most significant move backward was in the Nasdaq. The emerging markets saw green, benefiting from a decline in the US Dollar Index, but most S&P Sectors closed lower aside from Real Estate and Utilities. Energy caught analysts’ attention, specifically Natural Gas, which saw a decline of more than 25% last week after significant gains this year. Supply chain issues are said the be part of the blame for the runup. Federal Reserve Chairman Jerome Powell wants to retire the term “Transitory Inflation” after being questioned last week. Does that mean inflation is here to stay? The meeting continued with Powell discussing how rate increases could be done moving forward. Non-Farm payrolls threw a wrench into the outlook as only 210,000 jobs were reported against the estimated 573,000 expected. Likely this number will move upwards as reporting has been flawed since the pandemic began. At Leap Wealth, we are here to help our clients manage through all the highs and lows. We believe in process over opinion when it comes to managing wealth.
Despite the shortened trading week, there was a lot of turbulence. The worst performer of the major indices was Emerging Markets. The S&P did manage to reach an All-Time-High on Monday, with Tuesday and Wednesday also seeing gains. Friday’s half-day session sent the indices in red due to very light volume and a potential new Covid variant. Even though Energy fell 4% on Friday, it was still up for the week and the only positive performer. President Biden re-affirmed Jerome Powell for the Chairman of the Federal Reserve. The Fed did release their minutes ahead of the Thanksgiving Holiday with an eye towards tightening in 2022. However, the CME Group Fed Watch Tool saw a spike back down in the probability of a May 2022 rate hike. The 10 year Treasury yield dropped 6 basis points at the end of the week. All in all, the markets have gained this year and some pullback is going to happen. At Leap Wealth, we are here to help you manage through the economic and political noise in order to stay on track. Contact us today to learn more.
The last full trading week of November ended in mixed results. The gains in the S&P 500 and Nasdaq were found in just a few underlying sectors with Consumer Discretionary and Information Technology being the largest winners. There was a nearly 5% decline in oil prices last week as well. This was due mainly to a surprise in the estimate of inventories as well as President Biden and the Chinese leader saying they were going to release some of the oil reserve inventories. In other political news, President Biden signed the $1.2 Trillion Infrastructure Act and the House passed the “Build Back Better” Act coming in at $1.75 Trillion. However, the Congressional Budget Office reported the “Build Back Better” Act would add an additional $160 billion to the deficit with a $750 billion gap in the first 5 years. In economic news, the most interesting headline was the Michigan Consumer Sentiment Index reporting its lowest reading in decades as it fell to 66.8 in November. This index is a monthly survey that gathers information on American consumer expectations regarding the overall economy. We hope everyone has a safe and enjoyable Thanksgiving Holiday. We all have things to be thankful for and from Leap Wealth, we are thankful for the trust our clients have placed in us.
If you haven’t felt it yet, you will. Inflation is here. The 5-week winning streak of the Major Market Indices gets broken. The only positive performer was the Emerging Markets index after two weeks of losses itself. Most of the focus last week was on the economic reports regarding inflation. The Producer Price Index (measures the average change in sale prices for the entire domestic market of raw goods and services) rose 8.6% from last year, which shocked many analysts. That was followed up by a 6.2% increase in the Consumer Price Index (the average change in sale prices for the domestic market of raw goods and services). The FedWatch Tool changed after the month of October, speculating a rate hike in June of next year and another in December. Treasury yield curves are signaling a potential recession in the bond market. Contact us to learn how we navigate these economic conditions to help you Advance and Protect your wealth.
Off to the races again with more new ALL-TIME HIGHS adding to this years’ gains. Last week there were multiple economic reports, earnings releases, and the FOMC meeting. The ISM Services Index came in at 60.8%, although below the prior month, it was ahead of the estimated amount. The running theme is supply chain strain, and how it is impacting both manufacturing’s as well as service sectors. There is a growth in the backlog of orders as inventories stay low. Jerome Powell led the FOMC conference stating the Fed will reduce the monthly net asset purchasing of $15billion per month. This represents a move away from stimulating the markets. They do not plan to raise interest rates anytime soon and expect the bottleneck in supply to continue into next year. At Leap Wealth, we regularly monitor the overall markets, economy, and the direction of those while implementing our Advance and Protect investment strategies. To learn more, contact us today.