News & Views



Here is a sampling of our market updates to clients.


We are proud to present our first monthly report from our new offices, and glad to say some of the storm clouds are passing. Risks are still there but on balance appear less so than earlier this year, with the S&P500 eking out a 3.5% YTD total return through May. [Note today’s shockingly weak jobs created report throws some cold water on this]. A second interest rate rise by the Fed is now certainly expected, while who knows what we can expect in the Presidential election(!). Perhaps the best we can say is it makes for good (i.e. very poor) theater.

Many of you have been setting your update appointments where we typically will freshen up your RETIREMENT PROJECTION and address any current issues for you. Please feel free to call Karen to schedule.

Specifically too, we would like to thank you for the referrals that have been coming – we very much appreciate the confidence in us, and of course we will treat your referrals as attentively as we have always treated you.




Dear Clients,                                                                                                                                                                                                                                                                            June 24, 2021


Since our last update, the behavior of the economy and stock markets continues to be affected by (1) the rate of vaccinations and the speed at which businesses re-open, (2) market interest rates (primarily Treasury rates) and corresponding inflation fears, and (3) the periodic rotation between Value and Growth Stocks.  Growth stocks regained favor after their 1Q sell-off and drove the S&P 500 and NASDAQ indexes to their all-time highs in June.


To give you some perspectives on the above, we elaborate on several important events of the past month: 


  • The Federal Reserve has remained committed to their high liquidity (Mortgage/Treasury Bond purchases) and low interest rate program, (0-.25% Federal Funds rate).  They have insisted that inflation signs are going to be “transitory” and not require near-term changes in policy. While they may be correct about “commodity inflation” (<10% of inflation), they may be under estimating the labor shortage and increasing wage pressures (<90% of inflation). In the past month lumber prices have dropped 40%, and copper and gold are down some 20-25%.  China, as the largest consumer of commodities, is trying to curb “speculation” by selling off some of their reserves to drive down prices.


  • Labor costs are just starting to rise.  Today there are about 7 million unemployed and over 9 million job postings.  Filling jobs is hard and companies are raising wages.  Our economy is based on services rather than manufacturing and so labor costs become far more important.  There is nothing “transient” about increased labor costs.  This is further exacerbated by the 2.7% of workers who are quitting their present employment for better opportunities.


  • Increased demand for treasuries by global institutional investors, pension funds, and domestic investment managers has driven down the 10-yr Treasury yields from 1.75% (in March) to a recent 1.5%.  This in turn has aided the rotation from Value to Growth stocks (and why as tech stocks rose we took the opportunity to lighten up on them and control risk in accounts which we manage).


The May CPI report at 5% - highest in 13 years, forced the Fed to finally acknowledge that inflation is running well above expectations.  They did so in the aftermath of their June 16, 2021 Fed meeting by suggesting, for the first time since the 2020 recession, that they are shifting their stance to a more hawkish time.  While it may take many months before the timing and extent of any bond purchase “tapering” and increase in the Fed Funds rate, it was in important signal nonetheless.


Discuss “danger of bubble in speculative stocks” namely the WSJ article I provided


So, for now, the end of Q2 is near.  Earnings will be spectacular and Q2 GDP is estimated at 8%!!!  What happens next will depend on the Q2 earnings commentaries beginning in about 3 weeks.


As we’ve been mentioning, we are continuing to deepen our relationship withi our good friends at Castle Rock Wealth Management. We are working on co-officing with them later this year. We’ll keep you posted.


Best wishes to all our valued clients,


Mark Greenberg, JD, CFP®                                                                                                                                                                     Dusan C. Pecka, PhD

*WINNER 5-STAR Wealth Manager Award, San Francisco East Bay

  Seven time winner - 2012, 2016 through 2021




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