Who We Are
Our Founding Principles
What We Do
Our Financial Planning Process
Our Comprehensive Services
Our Investment Process
Covenant Wealth Portal Login
CWS Vault Checklist
Covenant Wealth Portal Demo Video
Account View Login
Covenant Wealth Strategies Blog
Stone Barn Times
New Client Kit
Generational Prosperity Plan
Timely and Relevant News: Updates From The Market Pull Back
Markets started to pull back Wednesday, which resulted in the biggest one-day decline for the Nasdaq since last February. Treasuries extended their recent selloff into 2022 with the 10-year yield approaching resistance at the 1.75% level.
Markets rattled when the Fed released their December meeting minutes on Wednesday, which indicated the likelihood of an interest rate hike as soon as March.
You can reference our previous communication,
Highlights From The Federal Reserve Meeting
The Fed meets four times a year to update its economic projections for the next several years, as well as its longer-term forecasts.
The Fed's minutes also noted that “some” participants said that it could be appropriate to start balance sheet runoff “relatively soon after beginning to raise the federal funds."
While the asset purchase and rate hike details were largely known, the discussion around balance sheet run-off seemingly surprised markets. Nonetheless, these minutes further confirm that the Fed has likely sped up its intentions to start the removal of monetary accommodation this year.
LPL Financial Fixed Income Strategist Lawrence Gillum has stated, “... the Fed’s job, especially from this point forward, is to prove that it can manage the removal of monetary accommodation without slowing the economic recovery.”
To learn more and ask questions about the markets, we encourage you to join us for our upcoming virtual event,
2022 Market Outlook
Tuesday, January 11th at 4 pm ET.
In the meantime, if you have specific questions related to your own investment strategy or financial planning needs, we welcome you to call us at 302.234.5655 or email us at
to set up time to discuss further.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. U.S. Treasuries may be considered “safe haven” investments but do carry some degree of risk including interest rate, credit, and market risk. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio. Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.
All index data from FactSet.