Market Update
Stocks Rise On Slowing Economy
Investor sentiment turned positive last week as signs of economic softness were interpreted as reason for the Fed to hold off on further rate hikes. A downward revision of Q2 economic growth and fresh signs of a cooling labor market reversed the recent rise in bond yield. They helped trigger a stock bounceback following Fed Chair Powell’s speech at Jackson Hole the previous Friday.
It wasn’t all about bad news being viewed as good news, though. A series of solid earnings reports, an announcement by one mega-cap tech name introducing pricing for its AI tools, and fresh inflation data–in-line with market expectations–further boosted enthusiasm for stocks.
Signs Of Labor Cooling
Despite historic monetary tightening, the labor market has exhibited remarkable resilience, but last week’s employment data showed a cooling trend.
Job openings declined to their lowest level since March 2021, though they remained above pre-pandemic levels. Meanwhile, a survey of private sector hiring showed a slowdown in hiring, with employers adding 177,000 jobs in August–below the 371,000 added in July and short of economists’ forecast of 200,000.1,2
Finally, the government’s monthly employment report showed the number of nonfarm payroll gains continued to decelerate in August, while June and July estimates were revised lower by 110,000.3
What is a "soft landing" and are we headed towards one?
The term "soft landing" refers to a situation in which the economy slows down gradually and avoids a recession.
The Federal Reserve has only achieved a soft landing a few times in the past.
There are a number of factors that can make it difficult for the Fed to engineer a soft landing, such as high inflation, a financial crisis, or a sudden decline in consumer spending.
The current economic environment is complex and uncertain, making it difficult to predict whether the Fed will be able to achieve a soft landing.
A look back at history
In late 2000, The New York Times ran a column titled "Making a Soft Landing Even Softer." The column argued that the Federal Reserve could engineer a soft landing for the economy, meaning that it could slow economic growth enough to bring inflation under control without causing a recession.
In late 2007, the Federal Reserve Bank of Dallas also expressed optimism about the economy. The bank's forecasters said that the United States should be able to avoid a recession even as the subprime mortgage crisis unfolded.
However, within weeks or months of the declarations, the economy plunged into recession. Unemployment shot up, businesses closed, and growth contracted. In fact, prior to the last six recessions, economists forecasted soft landings.
This historical cautionary tale is relevant today. Once again, there is optimism that the Federal Reserve can engineer a soft landing for the economy. However, the history of the past two decades suggests that this is easier said than done.
Is a Recession on the Horizon?
Select data suggests we’re in the late stages of the current economic cycle:
- The housing market, which is typically the first data point to peak as the economy slows, peaked in 2021.
- Other than one slightly expansionary month (April 2023), the manufacturing sector has been contracting since late 2022.
- Corporate profits and consumer spending have been slowing.
- The U.S. Treasury yeild curve has been inverted since July 2022. This unusual slope is a time-tested recession indicator. An inverted yield curve has preceded every U.S. recession since the 1970s.
Mind Matters: Tips to Nurture Your Mental Health
According to Google Trends, the most searched health topic last month was mental health. This is a broad topic that includes a wide range of issues, such as anxiety, depression, stress, and eating disorders.
There are a few reasons why mental health was so widely searched, including an increased awareness of mental health challenges. One in five adults in the United States experience mental illness in a given year, and now, more people are open to talking about their mental health, and they are more likely to seek help if they are struggling.
Mental illness is considered the leading cause of disability in the United States, so it is important to know there are also more resources to help manage your mental health than ever before.
Here are 10 tips for caring for your mental health, fostering emotional resilience, and embracing mindful practices:
- Prioritze Self-Care: Just like your physical health, mental health thrives on self-care. Make time for activities that bring you joy and relaxation. Engage in hobbies, practice mindfulness, take walks in nature, or simply curl up with a good book. Remember, self-care isn't selfish; it's a vital aspect of maintaining your overall well-being.
- Embrace the Power of Connection: Human connections play a pivotal role in our mental health. Engage with family, friends, and your community. Share your thoughts and feelings with trusted individuals. A support system can provide comfort during tough times and help you see things from different perspectives.
- Monitor Your Inner Dialogue: Be mindful of your self-talk. Are you overly critical of yourself? Negative self-talk can be detrimental to your mental health. Practice self-compassion and challenge negative thoughts. Treat yourself with the same kindness you would offer a friend.
- Establish Healthy Boundaries: Setting boundaries is an essential part of self-care. Learn to say no when needed and avoid overcommitting yourself. Recognize that it's okay to take breaks and step away from stressful situations.
- Nurture Your Physical Health: Physical and mental health are interconnected. Regular exercise, a balanced diet, and sufficient sleep can positively impact your mood and reduce stress.
- Mindfulness & Meditation: Embrace mindfulness and meditation practices to calm your mind and be present in the moment. These techniques can reduce anxiety and promote overall well-being.
- Seek Professional Help When Needed: There's no shame in seeking help from mental health professionals. If you find yourself struggling to cope with daily life, experiencing persistent sadness, or feeling overwhelmed, don't hesitate to reach out for support.
- Limit Screen Time: In today's digital age, we are often inundated with information and notifications. Set boundaries for screen time to protect your mental space and allow yourself time to unwind without constant digital distractions.
- Practice Gratitude: Cultivate a gratitude mindset by regularly acknowledging the positive aspects of your life. Gratitude can shift your focus away from negatives, leading to increased happiness and resilience.
- Engage in Activities that Bring Purpose: Engaging in activities that align with your values and bring a sense of purpose can boost your self-esteem and overall mental well-being.
Caring for your mental health is a journey, not a destination. It requires ongoing effort and commitment, but you are not alone. There are many people who understand what you are going through and who can help you. If you are struggling, please reach out for help.
Supplementing Smart
Nearly half of Americans take a daily multivitamin4, but is it necessary?
Despite all the claims you might read on the bottle, most studies have found no significant benefit from taking a daily multivitamin to protect the heart or brain, or prevent cancer5. For otherwise healthy individuals eating a balanced diet, you might just be swallowing away your money.
With that being said, sometimes our lifestyles, dietary restrictions, or phases of life might warrant the need for vitamin supplementation.
Read on to learn what key vitamins you might consider adding to your routine, and why.
Vitamin D - Known as the "sunshine vitamin," Vitamin D is vital for strong bones, immune system support, and overall well-being. Spending time outdoors and consuming foods like salmon, fortified dairy, and egg yolks can help, but a large percentage of Americans don't get enough vitamin D through their diet alone. Particularly if you live in places with less sunlight during the winter, you might consider supplementing your intake of vitamin D.
Vitamin C - This powerful antioxidant aids in immune function, collagen production, and wound healing. While citrus fruits, strawberries, and bell peppers are rich sources, vitamin C supplements can be useful during times when your immune system needs a boost. For many families, this time of year involves going back to school where kids will have increased exposure to others, and perhaps a dangerous combination of higher levels of stress with lower hours of sleep. If your family's routines are changing this fall, you may want to up your Vitamin C intake.
Vitamin B Complex - B vitamins, including B6, B12, and folate, are essential for energy production, nerve function, and cell metabolism. A diet rich in lean meats, whole grains, and leafy greens can meet most people's B vitamin needs, but many people may be at risk of deficiency based on their diet or life phase. For example, vitamin B12 is primarly only found in animal foods, so those who have a plant-based diet may require supplementation. Additionally, pregnant women are advised to supplement with Folate (vitamin B9), as it helps with proper development of the baby and reduces the risk of birth defects. Older adults may also want to supplement, as Vitamin B12 absorption can decrease as we age.
Vitamin A - Vital for vision, skin health, and immune function, vitamin A can be obtained through foods like carrots, sweet potatoes, and spinach. Many people who live on-the-go lifestyles or have picky eaters at home may find it harder to meet their vitamin A needs. However, it is also important to note, excessive intake can be harmful and lead to headaches, fatigue, and nausea, so supplements should be used cautiously and with medical guidance.
Vitamin E - As an antioxidant, vitamin E helps protect cells from damage and supports skin health. Nuts, seeds, and vegetable oils are rich sources. Vitamin E deficiencies are relatively rare, however people with conditions that affect the ability to digest or absorb fat - such as cystic fibrosis and Chron's disease - may consider supplementation.
Vitamin K - Essential for blood clotting and bone health, vitamin K is found in leafy greens, broccoli, and meats. Given it reduces the risk of bone fractures, increasing evidence suggests postmenopausal women who are at risk for osteoporosis and both male and female athletes could benefit from vitamin K supplementation.
While obtaining nutrients from a diverse and balanced diet should be the goal, supplements can be beneficial in specific cases. Prioritize a healthy lifestyle, make informed choices, and always seek professional advice to ensure you are providing your body with the right vitamins in the right amounts.