CEO message
Hope you all had a good Thanksgiving. I somehow managed to cook for 15+ people despite having an ambitious bird that cooked faster than he was supposed to – throwing off my meticulously planned timing schedule. Hope your tables (and bellies) were full too.
-Kevin
Two Important Housekeeping Notes
Back to your regularly scheduled market news in a minute, but first:
1) At this point all of our returning clients should have received their tax engagement letters for the 2024 season. If you somehow haven’t got yours, or you’ve been reading this newsletter as a new subscriber and need some tax help this year, please just let me know and we’ll get you taken care of.
2) If you own an LLC or other entity you (probably) need to file your BOIR report before the end of the year. Shoot me a message if you need guidance. We’re here to help.
Market Resilience Amid Economic Uncertainty
November continued the markets continued trend upwards. I touched on this in our post-election email, but the market and general economy seems to like certainty and is happy the election is over (regardless of who you voted for).
The NASDAQ excelled, fueled by continued momentum in artificial intelligence and software-driven stocks. As usual (basically all of 2024) the tech sector has been leading the charge to where others are lacking. There’s no reason to think this momentum is going to stop soon.
Over the past few months, inflation has finally started to ease, and with the job market staying steady there’s been a noticeable sense of optimism in the air—especially with the Federal Reserve starting the rate-cutting process. Barring any shocking economic news (like a weird spike in CPI or drop in job numbers) the stock market should be relatively unaffected by the daily news cycle for a while. The next big thing on the horizon is Congress extending the tax cuts, which is slated for early on in the next term (details possibly coming around February or March). Until then we’re just parsing earnings reports and complaining about normal things.
From Hikes to Cuts
The Fed has continued apace on their new campaign to cut rates. I include the above chart because once the Fed starts cutting it can feel ‘business as usual’ when you hear they did another cut, but its worth noting how dramatic the change actually is when they really get underway.
Borrowing costs are noticeably lower now than they were a few months ago and will continue to fall. The impact of these changes haven’t actually been seen in the economy yet: if you were waiting for loan rates to come down before getting that SBA loan you probably only just closed recently (or not yet). So the full consequences are only going to be seen in the next month or two. We’ll report back in a few weeks with what that looks like.