Affinity "Mark" et Minute - August 30, 2023

Affinity “Mark” et Minute – August 30, 2023

Investment Commentary – August 30, 2023
Year to Date Market Indices as of August 30, 2023
• Dow 34,920 (5.57%)
• S&P 4,509 (17.70%)
• NASDAQ 13,973 (33.51%)
• OIL $79.75 (-0.94%)
• Barclay Bond Aggregate (1.15%)
• Gold $1,971 (7.73%)

JP MORGAN THOUGHT OF THE WEEK: While last week’s August flash mfg. and svcs. PMIs both showed a decline and durable goods orders fell 5.2% in July; the economy still appears to have momentum.

Earlier this year, investors largely anticipated that U.S. economic activity, specifically capital spending, would slow due to the lagged impact of tighter monetary policy. Instead, however, the economy has remained resilient and real nonresidential fixed investment grew 4.6% y/y in 2Q, largely driven by spending on structures and intellectual property. Capital spending is being challenged by high vacancies in the office sector, softening manufacturing activity and the Hollywood writers’ strike. Nevertheless, the AI boom, recent fiscal policy incentives and solid demand for warehouses and green buildings remain areas of opportunity for intellectual property and structures investment. As shown in this week’s chart, capital spending appears to be entering a new era focused more on intellectual property spending, which is currently benefiting from the AI boom and is also less sensitive to interest rates than physical investment spending. From 2020 this type of investment has been the largest percentage share of GDP for all nonresidential fixed investment components and currently accounts for 5.5% of GDP.

Clearly brains are becoming more favored relative to brawn when it comes to investment spending, so what does this mean for investors today? While last week’s August flash mfg. and svcs. PMIs both showed a decline and durable goods orders fell 5.2% in July; the economy still appears to have momentum. Provided businesses continue to boost investments in intellectual property, the economy should become less sensitive to rates, which, in turn, should benefit equity markets.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.

https://www.marketwatch.com/ (Market Indices)
https://www.jhinvestments.com/weekly-market-recap (Around the Web & Upcoming Events)
https://finviz.com/groups.ashx (YTD Performance Chart)
https://www.jhinvestments.com/weekly-market-recap#market-moving-news
https://www.cnbc.com/2023/06/12/stock-market-today-live-updates.html
https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Affinity “Mark” et Minute – August 30, 2023

Affinity “Mark” et Minute – August 30, 2023

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About the Author: Mark Roberts