I hope you are having a great week and enjoying the beautiful weather. This week began with news of a leak in the highest court of the nation, Russia’s announcement to pull out of the International Space Station, and all eyes on the Fed to see where interest rates are headed. It has been a week of supreme fallouts.
One of the biggest headlines in the news was the unprecedented leak in the Supreme Court of the United States. On Monday, Politico published a draft of an opinion that was argued back in the fall. This document indicates that the court could possibly overturn the landmark 1973 Roe vs. Wade case. The court did confirm the draft’s authenticity although stated that the draft did not represent a decision or final position of any member on the issues of the case. Chief Justice John Roberts has ordered an investigation into the source of the leak.
Russia has confirmed that it will pull out of the International Space Station (ISS) as soon as two years from now. This decision was made due to the sanctions that were imposed on the country after its invasion of Ukraine. The International Space Station originated in 1998 with the launch of the first modules into orbit and was expected to last just 15 years. The mission of the space station has since been extended even with increased maintenance problems, especially on the Russian half of the space station. Both the U.S. and Russia are major partners on the ISS project with the U.S. mainly responsible for life support for the 10 people who live aboard, and Russia has been mainly responsible for keeping the ISS In orbit. So far not much has changed since these initial comments including the arrival of three cosmonauts in mid-March. Russia did not comment on when their involvement in the ISS will come to an end but have said that they will honor their obligation and give at least one year’s notice.
Federal Reserve Chairman Jerome Powell announced yesterday that they will raise the short-term “Fed Funds” rate by 0.50%. You may recall that the central bank raised interest rates by 0.25% at its last meeting in March, which was the first rate hike in three years. Furthermore, the Federal Reserve declared that beginning June 1st, it will begin decreasing its $9 trillion balance sheet, further reducing the massive stimulus from the COVID-19 pandemic. Each month, the Fed will allow $30 billion of Treasury Notes and $17.5 billion in mortgage-backed securities to mature to decrease the size of the balance sheet. After three months, the monthly decrease of its balance sheet will shift to $60 billion in Treasury notes and $35 billion in mortgage-backed securities sold. Markets initially rallied on the news that the Fed would only raise 0.50% instead of the 0.75% that some had feared, but the rally proved short-lived. Investors are still assessing the impact of further rate hikes through the remainder of the year. For the week, the S&P 500, Dow Jones Industrial Average, and Nasdaq are all down 3.26%, 2.69%, and 4.29%, respectively, as of today’s close.
We are looking forward to our next webinar on “Getting Good Leverage: Credit, Loans, & Borrowing” with our Chief Investment Officer, Benjamin Lau, CFA®, and our Senior Financial Planner, Christopher Whitaker, CFP®, AIF®. Click here to register and learn more. The playback video for our last webinar on “A New Generation of Advising: Foundational Asset Management” will be available soon. Check out the recordings of our previous webinars to watch on our website here. Please share these links with your friends and family if you think they are topics they will find interesting.
I know this has been a volatile time in the market, so please feel free to call our office if you would like to discuss any questions or concerns you may have regarding your portfolio or schedule a review. Please call our office at (949) 253-8888 or email Michelle Campos at Michelle@apriem.com to schedule a meeting with your Wealth Manager.
Happy Cinco de Mayo and Happy Mother’s Day!
Rhonda Ducote, AIF®
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