Season Greetings,
I hope this Newsletter finds you brimming with joy and good health. The holidays, a time of merriment and reflection, are just around the corner. Personally, I find myself eagerly embracing the pumpkin-flavored delights that mark this season. (yes, I’m one of those people!).
My wife, a true enthusiast of the holiday spirit, revels in this time of the year. However, she does not share the same sentiment for pumpkin flavor treats.
In the spirit of this festive cheer, letâs dive into some heartening headline news. It’s been an encouraging period for the markets, and I’m thrilled to bring you insights and updates that reflect the optimism of the season.
On the economic front, the Federal Reserve’s met November 1st and decided to hold interest rates steady at 5.25%-5.5%(1)Â signals a cautious yet responsive approach to the current economic conditions. Despite robust growth in the third quarter with a 4.9% annualized GDP rate and a strong labor market, the Fed is carefully navigating the challenges of elevated inflation. Their decision to maintain the rate follows a series of 11 rate hikes, including four in 2023, highlighting their commitment to balancing economic growth with inflation control.
Regarding inflation, the recent trends are showing a gradual easing. Core inflation, which excludes volatile food and energy items, is slowing down, indicating a potential easing of price pressures in the economy. This trend has been welcomed by the markets, as evidenced by rallies in stocks and government bonds. However, the Fed remains vigilant, indicating that the journey to a sustainable 2% inflation rate still has a long way to go.(2)
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If you blinked you may have missed this piece of news; The Panama Canal, a vital artery for global commerce, is experiencing severe disruptions due to an extreme drought, likely intensified by El Niño conditions. The Canal Authority has been compelled to reduce the number of vessel transits significantly. Historically, the canal accommodates between 34 to 36 ships per day, but this number is being drastically cut down, first to 25 and eventually to as few as 18 ships per day by February(3). This reduction, accounting for 40%-50% of its full capacity, is causing notable delays. For instance, shipping containers heading to the U.S. East Coast, particularly through the Port of Charleston, are facing prolonged wait times, 40% of U.S. goods are transported through the Panama Canal.
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The Panama Canal’s operational changes and drought issues could influence the cost and availability of imported goods, affecting various sectors. Meanwhile, the Federal Reserve’s monetary policy decisions will continue to play a pivotal role in shaping the economic landscape.
As we draw this edition of our newsletter to a close, let’s embrace our shared experiences and diverse joys, whether they be pumpkin-spiced treats or other holiday delights. The economic landscape, as highlighted by the Federal Reserve’s actions and the challenges at the Panama Canal, reminds us of our global interconnectedness and resilience.
As we gather with loved ones and partake in festive traditions, we remain hopeful that the recent signs of inflation easing will continue, bringing more stability and prosperity in the coming year.
Thank you for reading.
Warmest regards,
Alan Grismore
Author Alan Grismore, WMCP Ÿ
Alan is the founder and Wealth Advisor of Alta Private Wealth, Inc. (APW)
You can check out more info @Â Altaprivatewealth.com
APW and Axxcess Wealth Management, LLC (AWM) are not affiliated.
(1)https://www.cnbc.com/2023/11/01/fed-meeting-november-2023-.html
(3)https://www.cnbc.com/2023/11/03/panama-canal-drought-hits-new-crisis-level-amid-severe-el-nino.html
(4)Source: BLS, FactSet, J.P. Morgan Asset Management. Contributions mirror the BLS methodology on Table 7 of the CPI report. Values may not sum to headline CPI figures due to rounding and underlying calculations. *Core services ex-shelter CPI is a custom index using CPI components created by J.P. Morgan Asset Management. (Left) âShelterâ includes ownersâ equivalent rent and rent of primary residence; âOtherâ primarily reflects household furnishings, apparel, education and communication services, medical care services and other personal services. (Right) âTransportation servicesâ primarily includes leased cars and trucks, motor vehicle insurance and motor vehicle maintenance and repair. Airline fares are broken out from transportation services.
Guide to the Markets â U.S. Data are as of October 31, 2023.
(5)https://earthobservatory.nasa.gov/images/151778/panama-canal-traffic-backup