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Market Commentary

Stocks go up, stocks go down. Interest rates change, housing trends ebb and flow. How do you keep up with the markets and economy? Vizo Financial offers weekly and monthly market commentaries to keep your credit union apprised of the current economic and market trends. Read the latest now!

January Monthly Market Commentary

A Bifurcated Economy

On the surface, the U.S. economy is strong. GDP growth is near its short-run potential, unemployment is low, consumers are spending and manufacturing is coming back to life, spurred by AI-related spending on structures and equipment. Based on the strong performance of all key indicators in December, the economy is riding on a good deal of momentum as the calendar turns to 2025. Barring an external confidence-shattering shock, such as an escalation of geopolitical conflicts, an oil crisis or a global trade war that roils international commerce, the U.S. economy should do well in 2025 and, once again, outperform on the global stage.

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December Monthly Market Commentary

New Year, New Problems

The Federal Reserve cut interest rates for the third time in its three-month easing cycle that started with a robust half-point reduction in September. The latest quarter-point cut won’t be the last according to predictions made at the December 17-18 policy meeting. The question is, are we closer to the beginning or the end of the rate-cutting cycle. If we are still in the early stage, the next question is what is the ultimate landing spot – i.e., so-called neutral rate that the Fed believes neither juices nor stifles growth in a stable inflation environment? Predictions of that rate are all over the place, which is not surprising as it is a moving target that has changed dramatically over the years.

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Weekly Market Commentary

February 10, 2025

How you look at this past Friday’s jobs report depends on whether you are a half-full or half-empty type of person. Those with a more jaundiced view of the world will view the slowdown in payroll growth in January as an ominous sign, the first inkling that labor conditions are poised to weaken significantly as the year progresses. The more upbeat observer, however, will look at the January slowdown in a broader context, seeing it as a welcome relief following torrid increases over the previous two months, wherein the already-strong gains were revised sharply higher. What’s more, the preliminary 143,000 increase in payrolls last month is still a solid performance for an economy that is facing mounting headwinds and a swirl of uncertainty.

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February 3, 2025

This week’s calendar was packed with economic news, headlined by the Federal Reserve’s first policy meeting of 2025. As expected, the Fed kept its finger on the pause button, putting the fourth rate cut of the easing cycle on hold until inflation shows more tangible signs of cooling. With the economy holding up well and consumers still spending freely, officials see little downside risk to the economy or job market of keeping rates at current levels. The summary statement of policy intentions issued after the meeting contained a few sentences that sounded mildly more hawkish than the previous statement, but Chair Powell brushed that off at the post-meeting press conference as merely an attempt to tighten up the language. However, Powell acknowledged that rates are still restrictive, suggesting that the Fed retains a bias to cut rates at some point, although the timing remains uncertain.

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January 27, 2025

This week was a quiet time for economic data, but the floodgates will open next week with a slew of key reports on consumer spending and inflation for December, as well as the government’s first tally on how the overall economy performed in the fourth quarter through the lens of the GDP report. Importantly, the Federal Reserve will have its first policy meeting of 2025; unlike the three previous meetings, beginning with September and all of which included rate cuts each time, the central bank is expected to stay on the sidelines at this confab. Just how long a pause will be in effect is still uncertain, but triggers for the next cut are likely to come sometime in the spring or early summer, as the inflation retreat – which stalled out over the second half of last year – should resume.

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January 21, 2025

Last week, the economy delivered good news for Main Street in the form of strong job growth, but bad news for Wall Street thanks to higher interest rates. This week, the news cycle flipped the script. Wall Street rejoiced over an inflation report whose core component came in mildly softer than expected in December. But the same report was viewed less favorably on Main Street, particularly in poorer neighborhoods, as the cost of necessities – notably gasoline and eggs that account for a big chunk of lower-income budgets – drove a pick-up in headline inflation. For the first time since April, overall prices rose faster than worker paychecks, cutting real hourly earnings from $11.25 to $11.23 last month.

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January 13, 2025

It’s been a rough ride in the financial markets over the past month. The S&P 500 has fallen by more than four percent since hitting a nearby peak on December 6, while the Bellwether 10-year Treasury yield has spiked by nearly three-quarters of a percent, hitting a 15-month high of 4.80 this week. Perceptions as much as fundamentals have underscored the bearish turn of events. Until Friday’s stronger than expected jobs report, there were no major surprises on the economic front. As advertised, policy uncertainty linked to the incoming administration is wreaking havoc on investor expectations, stoking the volatility that many anticipated following the election. It’s still unclear how much of the headline-grabbing campaign proposals will see the light of day and how they would ultimately impact the economy. About the only outcome around which a consensus has formed is that the prospect of higher tariffs, lower taxes and increased deportations heightens the risk that inflation will be stickier than otherwise over the foreseeable future.

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