{"id":6316,"date":"2019-04-12T13:46:53","date_gmt":"2019-04-12T18:46:53","guid":{"rendered":"http:\/\/schenkelberg.investments\/?p=6316"},"modified":"2019-04-12T13:49:20","modified_gmt":"2019-04-12T18:49:20","slug":"fed-relief-rally","status":"publish","type":"post","link":"https:\/\/schenkelberg.investments\/?p=6316","title":{"rendered":"Fed Relief Rally"},"content":{"rendered":"\n<p>Following a Christmas Eve market low, Santa Claus delivered a strong stock market rally that lasted the next three months. The fourth quarter drop in market prices was a significant jolt to investors. However, major market indices are once again knocking on the door of all-time highs. <\/p>\n\n\n\n<p>In general, the strength of consumers and\ncorporations did not change. They remain relatively strong by historical\nstandards. Inflation remains muted and employment is strong. At the end of\nDecember, prices reached a lower level that prompted investors to take\nadvantage of relatively attractive prices and start purchasing shares again. <\/p>\n\n\n\n<p>A few other items helped propel the rally farther:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>More\nproductive trade talks between the U.S. and China.<\/li><li>The European\nCentral Bank indicated they would will not raise their interest rate in the\nforeseeable future, maintaining a negative 0.4% interest rate in the Eurozone.<\/li><li>The U.S.\nFederal Reserve followed suit and indicated they are likely to hold target\ninterest rates at current levels for the remainder of the year.<\/li><\/ul>\n\n\n\n<p>The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. The Federal Reserve has three primary mandates: maximum employment, stable prices and moderate long-term interest rates. To measure these items, the Federal Open Market Committee (FOMC)seeks an inflation rate around 2.0% and unemployment of 4.0% &#8211; 4.6%. These objectives currently appear well in hand; however, the FOMC does see reason to be cautious.<\/p>\n\n\n\n<p>Following seven years of near zero rates from 2009\nthrough 2015, the U.S. Federal Reserve began raising the target rate. Despite\nsteadily rising rates, the current effective federal funds rate of 2.4% remains\nwell below historic averages, as illustrated in the figure below. Gray areas on\nthe graph indicate years of recession. Following the sharp economic recession\nwe saw in 2008 and 2009, we have enjoyed a long period of growth.<\/p>\n\n\n\n<p>The federal funds target rateis very important to all of us, as it helps set interest rates at\nwhich banks are willing to lend to customers as well as the rate they are\nwilling to pay depositors. Lower rates prompt businesses to consider additional\nloans to help grow their business. So, lower rates are seen as positive for\neconomic growth while higher rates are thought to prompt businesses and\nconsumers to save and not invest in growth.<\/p>\n\n\n\n<p>Looking forward, this interest rate environment\nremains very favorable. First quarter earnings reports will be watched closely\nfor any signs of slowdown in activity or inflationary pressures. These signs\nwill likely drive markets in April and May.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1168\" height=\"470\" data-attachment-id=\"6317\" data-permalink=\"https:\/\/schenkelberg.investments\/?attachment_id=6317\" data-orig-file=\"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?fit=1168%2C470&amp;ssl=1\" data-orig-size=\"1168,470\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"Fed Funds Graph\" data-image-description=\"\" data-image-caption=\"\" data-medium-file=\"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?fit=300%2C121&amp;ssl=1\" data-large-file=\"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?fit=1024%2C412&amp;ssl=1\" src=\"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?fit=1024%2C412\" alt=\"\" class=\"wp-image-6317\" srcset=\"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?w=1168&amp;ssl=1 1168w, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?resize=300%2C121&amp;ssl=1 300w, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?resize=768%2C309&amp;ssl=1 768w, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?resize=1024%2C412&amp;ssl=1 1024w, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2019\/04\/Fed-Funds-Graph.png?resize=1080%2C435&amp;ssl=1 1080w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Following a Christmas Eve market low, Santa Claus delivered a strong stock market rally that lasted the next three months. The fourth quarter drop in market prices was a significant jolt to investors. However, major market indices are once again knocking on the door of all-time highs. In general, the strength of consumers and corporations [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[119,123],"tags":[],"class_list":["post-6316","post","type-post","status-publish","format-standard","hentry","category-market-commentary","category-market-performance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p7kXxe-1DS","jetpack-related-posts":[{"id":6153,"url":"https:\/\/schenkelberg.investments\/?p=6153","url_meta":{"origin":6316,"position":0},"title":"1Q 2017 Market Performance Breakdown","author":"J.J. 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The end of a bull market is characterized by a 20% drop from the peak. The S&P 500 was two points away from 2,344.6 on December 27th before staging its\u2026","rel":"","context":"In &quot;Market Commentary&quot;","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6894,"url":"https:\/\/schenkelberg.investments\/?p=6894","url_meta":{"origin":6316,"position":2},"title":"U.S. vs International\/U.S. Sectors","author":"J.J. Schenkelberg, CFA","date":"July 10, 2025","format":false,"excerpt":"Performance Source: Koyfin.com Price Return U.S. Versus International The S&P 500 Index, an index of large U.S. companies, posted a price return of 10.6% for the Second Quarter of 2025. This move brought the index around to an all-time high to end the quarter. Large U.S. stocks underperformed international for\u2026","rel":"","context":"In &quot;Market Commentary&quot;","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/07\/image-1.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/07\/image-1.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2025\/07\/image-1.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":6574,"url":"https:\/\/schenkelberg.investments\/?p=6574","url_meta":{"origin":6316,"position":3},"title":"The Stock Market That Could &#8211; Climbing a Wall of Worry","author":"J.J. Schenkelberg, CFA","date":"October 15, 2021","format":false,"excerpt":"Does the phrase \u201cclimbing a wall of worry\u201d sound familiar to you? In many years the stock market has continued to rise despite significant concerns in the economic or political environment. There are a lot of items causing investors to be concerned about current stock prices - inflation, shipping delays,\u2026","rel":"","context":"In &quot;Market Commentary&quot;","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2021\/10\/fredgraph-2.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2021\/10\/fredgraph-2.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2021\/10\/fredgraph-2.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2021\/10\/fredgraph-2.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2021\/10\/fredgraph-2.png?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":6146,"url":"https:\/\/schenkelberg.investments\/?p=6146","url_meta":{"origin":6316,"position":4},"title":"2Q 2017 Market Performance Breakdown","author":"J.J. 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