To escape the summer heat index in Atlanta, I typically schedule time with friends to embark on some form of outdoor excursion, which historically has included scuba diving, deep water fishing in Alaska, and destination hikes. Last month I flew to Calgary to join some friends to hike Mt. Temple in Lake Louise, Banff National Park. Mount Temple is a prominent triangular-shaped peak capped with ice and snow that towers above the village of Lake Louise. At 11,636', Temple is the highest peak in the Banff Region, but is also one of the highest peaks in the Canadian Rockies. For those of you who are looking for an adventurous and challenging hike, as well as some time outdoors in the wilderness, I encourage you to add this one to your bucket list.

The summer's equity index returns may also be described as adventurous and challenging. With the S&P 500, Dow 30 and Nasdaq 100 down 1.63%, 2.04% and 1.48% respectively [1], and treasury yields at their highest levels since the 2008 global financial crisis [2], perhaps the markets were taking a pause from what so far has been an excellent year for equities.

Not to be outdone, the August employment report released by the Bureau of Labor Statistics (BLS) was also concerning as the number of unemployed persons increased by 514,000 to 6.4 million [3]. In addition, the BLS report also cumulatively revised downward by 355,000 the YTD jobs created in both the private sector and government [4]. This was the 7th consecutive month of negative revisions, the only other timeframe with a negative revisions streak this long since revisions data has been tracked was in 20084. With jobs creation decelerating, will central banks deliver a “soft landing” later this year or in early 2024, or will we embark on a more definitive economic recession like the one we experienced starting in the back half of 2008?

Investing is analogous to a mountain hike in that one will experience inclines and declines, unexpected surprises (both good and bad), and periods of both relative tranquility and volatility. Deploying one’s hard-earned capital into the equity markets without understanding both the current economic data and capital markets’ trends is like embarking on a dangerous hike without proper equipment, training, and knowledge. Acknowledging I may be biased, I encourage everyone to try both as the outcomes realized are certainly worth the periodic speed bumps along the way. In closing out this latest Craig’s Corner, I’ll leave you with this quote from Paul Coelho, the Brazilian lyricist and novelist, “If you think adventure is dangerous, try routine, it is lethal”.

[1] The Bespoke Report, Bespoke Investment Group, Sept. 1, 2023

[2] Vertigo: Market Succumbs to Myriad Pressures | Schwab Funds https://www.schwabassetmanagement.com/story/vertigo-market-succumbs-to-myriad-pressures?render=print, Aug 21, 2023

[3] Employment Situation Summary August 2023, US Bureau of Labor Statistics, Sept 1,2023 (https://www.bls.gov/news.release/empsit.nr0.htm)

[4] Piece of Work: Dissecting Labor Market Trends | Schwab Funds