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  • Writer's pictureMatthew Lawson

'Tis the Season

We have had a couple of inflation reports the past two weeks that have come in below expectations and that is a good thing for stock and bond investors. Based on forward-looking reports, it appears likely, that future inflation readings may trend lower. The question is will inflation fall fast enough for the Federal Reserve to stop or slow down the pace of interest rate hikes. As of today, the market is expecting a ½ point hike in December and a ¼ hike in February 2023.

Technology continues to be the worst sector this year while energy is far and away the best. It was not too long ago, mid-year 2020 that energy companies traded down, and no one wanted to even consider buying them even though valuations were extremely low. Fast forward to today and we have a similar situation with large-cap technology companies. Back in 2020 energy traded at a deep discount to historical valuations because of the demand destruction caused by governments shutting down the global economy. Today, technology stocks are out of favor mainly because of the Federal Reserve raising the fed funds rate at an aggressive pace. Perhaps over the next 12 to 18 months technology stocks will resemble energy stocks from 2020 to present.

Footnote: Over the past 100 years, November to May has been the best time to remain fully invested in stocks.

Everyone here at Lawson Winchester Wealth Management wishes you and your family a Happy Thanksgiving!


The views expressed are not necessarily the opinion of Cadaret Grant, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Investing is subject to risks including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

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