TKer

Thanks to SABEW , Federal Reserve Bank of St. Louis , and the FRED team for an unforgettable experience. Got to meet with some incredibly impressive economists and researchers. Our monetary system is in good hands.

People?love September. The weather gets more crisp. The clothes get more cozy. Football season kicks off. And there’s a sense of hope and renewal in the air as people return to work and kids get back to school. And then there’s the #stockmarket, which has a less than stellar track record as the leaves change colors. Since 1980, it's the only month of the year with a negative average return. But is that a reason to sell? More here: https://lnkd.in/gbW3c_ij

Most major news outlets are very good at?accurately?reporting whatever they report. But that doesn’t mean what you see reported won’t lead you astray. In my many years consuming and processing an ungodly amount of news, I’ve noticed three types of?accurately?reported facts that can be problematic: 1) A source who’s quoted accurately, but the source is wrong; 2) A stat that’s true, but lacks relevant context; and 3) An anecdote that’s real, but the bigger picture reveals something else. For more on this, read: https://lnkd.in/eYuikzwT

Some people try to make money #trading the #stockmarket over short-term periods. Some aim to build #wealth by #investing in the stock market over long, multi-year timeframes. Many do some combination of both. All of these people seek out information and insights that might help them get an edge and improve their returns. But unfortunately, trading tips and investment advice come with a lot of the same jargon that make it easy to confuse the two if you’re not paying careful attention. When a markets expert starts talking, the first question you should ask is: “What is the timeframe?” Is it one month? One year? Several years? One day? Why? Because it’s possible that the same person who’ll tell you stocks will fall in the coming weeks will also tell you they expect prices to be higher in the coming years. For more on this: https://lnkd.in/eHFf44qv

Last Monday, August 5, the S&P 500 dropped 3%. It was the?worst one-day drop?since September 2022. That following Thursday, the S&P jumped 2.3% in what was the?best one-day rally?since November 2022. This type of #stockmarket behavior isn’t historically unusual. If you look at the S&P 500’s worst one-day percentage losses in history, you’ll see that in many cases, the best one-day percentage gains in history?weren’t far behind. More here: https://lnkd.in/ef6CbJDh

Almost?exactly a year ago, the #stockmarket hit an air pocket not too unlike what we’re experiencing today. This is not to suggest that history will repeat or that the sell-off we’re experiencing will be short-lived. The 9% drawdown in the S&P 500 can certainly get?a lot worse before getting better. Rather, it’s just a reminder that?volatility is normal?— and that you should always?keep your stock market seat belts fastened. And with market volatility like what we’re experiencing now comes a lot of helpful context and commentary from Wall Street’s sharpest minds. More here: https://lnkd.in/eNasJ-Pf

Just because something happened a bunch of times in the past doesn’t mean it?must?happen again in the future. This is what Fed Chair Jerome Powell communicated when asked about the #SahmRule recession indicator, which has revealed that #recessions historically started when the three-month moving average of the #unemployment rate rose 0.5 percentage points or more above its 12-month low. “A statistical regularity is what I call it,”?Powell said on Wednesday. “It's not like an economic rule, where it's telling you something must happen.” Claudia Sahm, the economist whom the indicator is named after, would agree. “Indicators of economic downturns like the Sahm rule are empirical regularities from the past, not laws of nature,” Sahm?wrote?last November. On Friday, we learned that the unemployment rate rose to 4.3% in July. This caused the three-month moving average of the unemployment rate to breach that 0.5 percentage point threshold for the first time in this economic cycle. For more on this discussion: https://lnkd.in/eYvMm4eu