The market continues to illustrate its volatility as our economy tries to find its way in this post-pandemic environment. We all struggle with high inflation and elevated costs, and everyone feels the effects. If that wasn’t bad enough, egg prices are still high. While there is plenty to complain about, there appear to be signs the economy is starting to turn around. It shouldn’t surprise anyone, but it will not be a quick process. While some of the economic data points are a positive sign, we sadly have to expect high inflation to last throughout this year and not see a significant reduction until sometime in 2024.
While countless news outlets highlight all the negatives and continuously warn of a pending recession, you must remember to stick to your financial values, and we’ll all make it through. Use a monthly budget, and update it to reflect the new inflated costs so you don’t fall off track.Â
Inflation
Inflation and high costs continue to dominate the financial news, and analysts continue to search for signs of continuous improvement. As mentioned before, inflation continues to erode the purchasing power of our money. As inflation continues into 2023, it will likely further deteriorate our fragile consumer confidence, making the work the Fed and policymakers are doing so essential. It’s critical that Congress can come together to develop effective legislation that will have positive and lasting effects on families.Â
Stock Market
We saw stocks surge mid-week following better-than-expected retail sales, but sadly many of these gains were lost by Friday. We all need to anticipate increased volatility as investors continue to hang onto every company’s earnings report and overanalyze every economic news. What is important is to remain calm during these periods of high volatility. Investors who stay calm during these times are more likely to make rational and informed investment decisions. While market fluctuations can be troublesome, experienced investors understand that they are a normal part of the market cycle. Instead of reacting emotionally to short-term market swings, successful investors often take a long-term view and stick to their investment strategies. They recognize that volatility can create opportunities to buy assets at lower prices or to take profits on assets that have risen in value.
Tesla
In other news this week, we saw that Tesla needed to “recall” over 360,000 cars due to issues related to their full self-driving mode. Problems have arisen that cars could violate traffic laws while in full self-driving mode. Tesla founder Elon quickly tweeted that “recall” would be an update pushed out to address the identified issue. Since Elon Musk took over Twitter, Tesla investors have been troubled by the significant time, and the focus of Musk has now shifted to Twitter instead of Tesla. While Tesla shares have fallen in the past year, shares have surged in the past month, going from $125 to $208.Â
Gas Prices
We all continue to feel the pain from raising costs, but we have seen gas prices stabilize somewhat. The current national average is $3.41, and it was $3.53 a year ago. Prices have decreased dramatically since the record-high surge over the summer, but they remain slightly elevated from two to three years ago.
The stock market is closed tomorrow for President’s Day and will reopen on Tuesday.