Market Update | March 19, 2024

How concerned are the top companies about inflation? Very. In a survey of S&P 500 companies released February 29, slightly more than half (254) of companies mentioned inflation at least once during their quarterly conference calls.

First-quarter corporate reports were better than expected. 73% of Standard & Poor’s 500 companies have reported actual Q4 earnings per share above estimated earnings per share. But regardless of earnings, inflation remains a concern for everyone, from individual consumers to Wall Street.

It is perhaps for good reason that inflation is still weighing on everyone’s minds. On March 12, the February Consumer Price Index report was released. The inflation index increased 0.4% for the month and 3.2% from a year ago. The monthly measure was in line with expectations while the 12-month reading was slightly higher.

Although the 12-month pace is off the peak from mid-2022, it remains well above the Federal Reserve’s 2% goal. What does this imply for the Fed’s interest rate policy? The Fed is likely to wait at least until the summer before starting to lower interest rates.

We can’t control interest rates or inflation, but we can follow a personal investment strategy that incorporates these inputs. Indeed, part of why it is important to invest is to combat inflation over time. We will continue to track and process inflation’s impact on the financial markets generally and what it means for our investment and financial planning recommendations.

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