Don’t ever bet against the American consumer. That’s how the saying goes, but Chair Jerome Powell at the Federal Reserve continues to take aim at the demand side of the economy. Despite a surge in interest rates that effectively began more than a year ago when the U.S. 2-year Treasury rate began to rise from near zero to above 4.3% by today, the labor market remains strong and excess savings among households is still robust. There have been some signs of consumer weakness as credit card usage is on the rise and pent-up savings balances from the pandemic are beginning to dwindle. Confidence, meanwhile, is lousy to say the least.
September lived up to its notoriously risky bill. Stocks got rocked, bonds were crushed, and major parts of the forex markets traded with the volatility normally seen in emerging market currencies. At Dana, we see this dip across equity markets as an opportunity for long-term investors. Higher bond market yields also offer the chance to own the right fixed-income securities at bargain prices. A case can be made, in fact, that now is one of the better times to be putting money to work in a properly allocated portfolio than at any other time in the last decade-plus.
The Dana Funds are distributed by Ultimus Fund Distributors, LLC. There is no affiliation between Ultimus Fund Distributors, LLC. and the firms referenced in this blog post.