Obsidian Market Update 9/18/20
We hope everyone is enjoying this shift into fall weather. This week, we have three quick financial updates and fun tidbits about two holidays that you might enjoy celebrating.
First, you may have read that Federal Reserve Chair Jerome Powell announced a change in how the Fed views inflation. In the past, the Fed said it would consider adjusting short-term rates when inflation approached 2 percent. And, in light of 2020’s many challenges, the Fed’s new policy may allow inflation to run above two percent for a period of time before any shift in monetary policy is considered.
For many, bonds are a critical component of their overall investment strategy. So any change in Fed policy regarding inflation may influence a portfolio. That’s why it’s important to understand that the market value of a bond will fluctuate with changes in interest rates. In other words, when interest rates rise, the value of existing bonds will typically fall.
There’s no doubt this will be a subtle change for many. And for bond investors, the policy shift may indicate that the Fed has given itself more flexibility in the future.
This year, September is helping its reputation as a volatile month. After closing at a record high on September 2, the Standard & Poor’s 500 stock index fell sharply over the next three sessions. Concerns about COVID-19, Congress taking its time with further economic stimulus, and the upcoming elections seemed to unnerve investors.
Second, COVID-19 vaccine trials may also affect the market. There are around 150 COVID-19 vaccines in development across the world, hoping that at least one will come to market in record time to help quell the crisis. Progress on vaccines will likely influence specific markets, like travel and leisure. This vaccine tracker has a lot of great information. We will have our eyes on this as it develops and hopes for a safe and effective vaccine soon.
Finally, September is seeing the return of both professional football and some market volatility. Football follows Major League Baseball, the National Basketball Association, and the National Hockey League, in which each organization started seasons (some abbreviated) in the past few months. Some colleges are playing fall sports, while others have postponed a part of their seasons.
While you’re watching the games from home, since the NFL is following the lead of other professional sports and not allowing fans in the stadium, you might enjoy celebrating this Friday’s holiday: National Cheeseburger Day, celebrated annually on September 18.
It’s unclear who invented this classic American staple, as several competing fast-food chains claim to have done so around the 1930s. Louis E. Ballast, the proprietor of the Humpty Dumpty Drive-In in Boulder, Colorado, owned the trademark, and never enforced it, as the word “cheeseburger” became generic. What we do know is that 71% of the beef served in the US is made into hamburgers and cheeseburgers. That cheddar cheese has overtaken American cheese as the most popular topper for this incredibly popular sandwich.
If cheeseburgers aren’t your thing, you might instead appreciate International Talk Like a Pirate Day on Saturday. This beloved holiday has officially been around since 1995 and made popular by Pulitzer-winning humor writer Dave Barry in 2002.
Past performance is no guarantee of future results. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.