Craig Robson, Founding Principal And Managing Director
When I am randomly asked what my favorite holiday movie is, I answer, without hesitation, "It’s a Wonderful Life." For those who are not familiar with this 1946 classic, the movie showcases a man who has given up his personal dreams in order to help others in his community and whose thoughts of suicide on Christmas Eve bring about the intervention of his guardian angel named Clarence. Clarence shows the main character, George Bailey, played by James Stewart, all the lives he’s touched and what the world would be like if he did not exist. A great reminder for all of us to focus on what we have rather than what we don’t - I’ve seen this movie at least 25 times and still enjoy watching it every December.
As 2022 comes to a close, it certainly feels like the US economy could use a guardian angel for some much-needed morale boosting! To use a winter weather theme, below are some of the more frigid recently-released economic data:
- November retail sales fell 0.6% from the prior month for the biggest monthly decline in 2022 (1)
- Existing US home sales fell 7.7% in November from the prior the month, the 10th consecutive monthly decline(2)
- The US Bureau of Labor Statistics household survey released in November reflected a net loss of 138,000 jobs and has been flat since March – essentially no new jobs created over that timeframe. For some context, you might remember the headline jobs number from last month(3) that indicated strength, however, Federal Reserve Chairman Powell prefers to focus on the establishment survey of businesses which unfortunately double counts individuals holding multiple jobs, such as part time jobs(4)
The most positive economic data point released in November was that consumer prices rose at the slowest pace since December 2021.(5) This singular data point is in the Fed’s crosshairs, and continued trends towards lower inflation will be required for central banks to discontinue increasing interest rates and begin pausing. This pausing message will be critical for both the equity and fixed income markets to begin “thawing out” which, in turn, should provide appreciation in both asset classes. Economist David Rosenberg likes to remind us that historically the equity markets bottom 16 months after the Fed pauses (not a guarantee as most recently the markets rallied significantly faster after the Fed lowered rates during Covid in 2020)(6). My message here - despite some less-than-optimistic economic data and uncertainty on timing of recovery - is to practice patience, understand what you own, and remember greed and fear are the two investor emotions to avoid.
As the year is almost complete, I’d like to wish everyone a Merry Christmas, Happy Holidays, and a peaceful 2023. I am confident each of us has our own guardian angel watching over us. So, I will wrap up this final 2022 Craig’s Corner with a quote from Clarence, "Every time a bell rings, an angel gets his wings."
Founding Principal and Managing Director
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