Category Archives: Market Comments

October AND November 2023 Audio Video Review, Taxes Deductions and Contributions for 2024, Your Favorite Team Analysis – By John Kvale CFA, CFP

Hello and Welcome to our October and November Financial Planning and Capital Market Update! October was slowed by the eventual update of our site, here…which continues to be in update mode!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets thoughts and current events!

Hope you enjoy!

Break In: Happy to Announce a Second Client Appreciation Get Together…

We are happy to announce a fun appreciation Evening in Houston Texas!

Wednesday December 6, 2023 from 6-8 PM

Cadillac Bar – 1802 Shephard Dr. Houston Texas

Back to our regularly scheduled program:

October & November 2023 Video

YouTube

Financial Planning Tip(s)

Take the Stress Out

In this funny but serious post, just completed earlier this week, we discuss the ease of stress that allowing plenty of time and being prepared allow….

Somewhat self serving, as your stress is of course our stress….but we can all be less stressed together!

IRS Updates:

The small but coming Inflation adjustments for 2024 were announce and we completed a post here with great details….

Here are the biggies:

  • Standard deductions move up to $14,600/ filer
  • Unlimited Gifting per person goes to $18,000

Then again earlier in the month we grabbed the new IRS contribution inflation adjusted levels here in this post

Again the biggies:

  • 401k and similar go up to $23,000
  • IRA and catch up go to $7000

Capital Market Comments

Capital Weight Versus Equal Weight! – Why the Heck it matters?

In this timely October post we discuss the importance of the strength of the team versus just a few players…aka Capital versus Equal Weight ….We also get to show off some of our very cool new research “Stuff” from Koyfin….

Oh….the reason this matters so much ….is just as your team can do well with an all star or two… lose them and you could be in trouble…. the wish is players develop around them to give more depth!

Have a Great Day, Talk to You at the End of December and the Year!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

How Many and Why Immigrants come to the USA … Complimentary to the USA … From Visual Capitalists …

While I have never experienced outdoor bathrooms, my father sure has…. So when something in not correct in that warm or cool, comfy bathroom a little reflective perspective …

Immigrants Coming to the USA – WOW

Work School Family…. An astounding 98% of Immigrants come to the USA for one of these reasons…

Pretty strong and valuable reasons….. This from our buds at Visual Capitalists ….

On a Thanksgiving week….

Hopefully That Bathroom may be pretty comfy

Have a Great “Thankful Thanksgiving Week” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

US Has More Spare Bedrooms than Ever Before …. From Apartment List … Why and who has them too…

Apartment List Research Department hit our in box earlier this week with an interesting statistic…with Copyright permission from earlier, we are gladly sharing…. Hope you find it as interesting as we do!

From Apartment List – More Spare Bedrooms than EVER before

This neat article By Chris Salviati hit our inbox this week and we wanted to share…

Anytime EVER is mentioned we take note…as EVER is a long time….

From the Article:

Using this definition, we find that 62 percent of all U.S. households had at least one spare bedroom in 2021, while 26 percent had exactly the required number of bedrooms, and 12 percent had too few bedrooms.

Who has all those bedrooms?

A lot of seniors aging in place …

Also, homes are just darn bigger!

Some great ideas on how this may be greatly productive in multiple ways…in the essence of time, will let you read the authors points near end of the article…good stuff…

Have a Great “Spare Bedroom Explained” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Quick Update on Treasury Yields…. 2 Year and 10 Year Treasury Yield Down, Price Up, Good for Stocks at the Moment but ….

With a road trip happening as you read this…. was a bit short on time for our mid-week post…. links in this post explain a lot….

Wanted to draw your attention to the move in US Treasury yields/bonds (and show off our new Koyfin technology too) …. this is the 2 and 10 year (still inverted- more to come on this- digressing) ….more importantly, the sudden drop, commenced by an FOMC meeting and then reinforced by weaker Employment data has bond interest rates down, bond prices up…..

This move down in yields has initially pushed Stocks up, and bond portfolios UP… we are cautious to call a victory lap on this bond and interest rate movement, but again worth noting…..

More importantly, bonds go up and rates down, under this circumstance because the smart guys in the room… are pricing in a slowing of the economy…. NOT usually good for Stocks…. after the candy wears off!

Have a Great “Quick Deeper Dive/Second Level Thinking on Rates” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

2024 Preview of New contribution limits (Tiny Increase?) … Clients/Clients Only Post Merger RMD’s … Time Change We think ?? YEP!

What inflation? According to the IRS… Certainly not going to argue with a raise, but WOW is it tiny!

From this IRS press release on Nov 1, 2023:

Highlights of changes for 2024

The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan is increased to $23,000, up from $22,500.

The limit on annual contributions to an IRA increased to $7,000, up from $6,500.

Those of us watching…. that is a total $500 increase…. oh well… will plan accordingly…. but expect more from us on this as we dig deeper….

Clients/Clients Only RMD Reminder Confusion from the Merger

Post Merger, our new vendor Schwab does not know the RMD taken prior to the merger…. just ignore the information for this year from them… we have your back on this and have planned accordingly!

Time Change? Maybe…..Yes…. No …. Yes?

Did any of you hear rumblings of no future dumping of daylight savings last year? And even some legislation….

Ahhhh HA! From the Sleep Foundation: YEP they are changing!

Key Takeaways

  • Clocks will “fall back” one hour at 2 a.m. local time on Sunday, November 5, 2023.
  • Federal law still prohibits states from enacting permanent daylight saving time (DST).
  • Proposed legislation to change federal law, such as Senator Marco Rubio’s Sunshine Protection Act, has stalled in 2023 despite gaining momentum in 2022.
  • Dozens of states continue to consider proposals to adopt either permanent daylight saving time or permanent standard time. Yet, no states have adopted a legislative change in 2023.
  • Without new movement on proposed changes, Americans should expect clock changes to continue into 2024.

More fun travels next week…. Happy Friday and have a good weekend – Talk Next Week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

2600 Office Buildings in 138 Cities…. Current Occupancy is Exactly 50% … Kastle Back to Work Barometer …. Likely the new norm?

Kastle a nationwide security provider….. obviously with their hands on some of the most interesting data:

Office Occupancy

With 2600 buildings in 138 cities…. the current occupancy rate is 50%!

Check out the 2020 Comps versus 2023 broken down by day of the week! WOW

Not sure what the future looks like, but likely not the same as a just a few years ago….

Have a Great “Back to Work Update” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

GDP (Gross Domestic Product) Q3 2023 Advanced Release … Headline Versus Second Look of Release…. Defense Spending …

On Thursday, October 26, 2023, the BEA (Bureau of Economic Analysis) released the Advanced Estimate aka first try at the Q3 2023 GDP for the US Economy….

As a quick reminder, GDP is one of the broadest measures of US Economic growth …. heck two consecutive negative GDP prints is the basic definition of a recession….back to the print…

The most followed headline number was a 4.9% increase…. at first blush a very positive number and a bit of a head scratcher…. especially given Capital Market’s recent crankiness…..

Government defense spending was (thankfully under current Geo Politics) up huge due to defense spending. Defense spending is not the same as organic Economic growth… it just does not filter through the system the same…still VERY important under current circumstances….

Have a Great “Now you Know the rest of the GDP Report” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Advanced Analysis … Part 5 … Inverted Yield Curve to Un-Invert/Narrow ? But Differently: The Bear Steepener – Huh ?

We definitely wanted to talk about this, but it is rather complicated, so it makes our Advanced Analysis Series….Part 5

Inverted Yield Curve is a Big Deal

When short term rates are higher than long term rates, a very unusual and non sustaining event, it is called an inverted yield curve.

Here is a list of over 30 – YEP over THIRTY different articles we have written in just the last 5 years if you need a refresher…

The Un-Inversion (the actual process) or at least Narrowing of Inverted Yield Curve a BIG Deal too

Orange line below the white/zero level = Inverted

Maybe Un-invert, or for sure narrowing?

Note orange line headed towards zero or break even…..Narrowing for Sure –

In true it is different this time…. the UN-inversion is occurring because of what is called a Bear Steepener … something we have not seen in a LONG time…

Note going back all the way to the 1980’s, the most prevalent type of narrowing or Un-inversion is a Bull Steepener, or the FOMC (Federal Open Market Committee) lowering rates – noted by the above white line on the chart (2 year Treasury) marked by the arrows….

From Investopedia:

Understanding Bear Steepener

A bear steepener occurs when there’s a larger spread or difference between short-term bond rates and long-term bond rates–as long as it’s due to long-term rates rising faster than short-term rates.

What does all of this mean and why are we talking about it?

Bear Steepeners occur when Capital Market Participants begin to price in higher inflation expectations … OR maybe this time, finally accepting the FOMC is not ready to quickly lower rates! hmmmm

You see now why we went for another edition of Advanced Analysis… Stay tuned on this, we will be monitoring closely and will bring you more as this plays out!

Have a Great “Bear Steepener Reviewed” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

More From Our New Tool, Koyfin … Equal Weight Index Versus “Super Star” Weighted Index…

From our Quarterly commentary

….but when you look a little closer it becomes apparent that this team is dominated by the performance of just a very few individuals? ….

This chart is the equal weighted SP 500 index for the year …. basically treading water…..

Per our new Koyfin tool, we can divide one index by another, giving an example of who is doing better or worse…. in this case the Equal Weight Index divided by the currently “Super Star” weighted index….

Again from the Quarterly commentary:

…..should some of those dominant forces not perform well or heaven’s, even worse, get injured, the real truth will begin to reveal itself.

Capital markets that are thinly led can have distinct vulnerabilities. On a positive side many of the players can catch up to give greater participation. An optimistic outcome. On the negative side just like our team, should some of those more important subjects falter, reality may sink in.,,,,

Note far right/most recent part of the chart … very distinct lack of participation…. also note other times in the last 20 years of lack of participation….

Not trying to split the Atom (haha), just making observations that may not at first meet the eye.

Have a Great “Equal V Super Star Team/Market” Review

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Third Quarter 2023 Review, Participation, Rates, Political Season, Seasonality !

Have you ever had some type of team that you follow, could be sports related or the other, that has a pretty good record, seems to be doing well on the surface, but when you look a little closer it becomes apparent that this team is dominated by the performance of just a very few individuals?

Participation or lack there of

There are a lot of similarities in the above analysis to the current capital market environment. Just like the vulnerability of your favorite team, should some of those dominant forces not perform well or heaven’s, even worse, get injured, the real truth will begin to reveal itself.

Capital markets that are thinly led can have distinct vulnerabilities. On a positive side many of the players can catch up to give greater participation. An optimistic outcome. On the negative side just like our team, should some of those more important subjects falter, reality may sink in.

Interest Rates

As mentioned in our Q4 Newsletter, higher interest rates are the tone of the times currently. Our lead article talks about the tremendous positives that higher interest rates have on pensions in the form of higher fixed income earnings. In the very short term, it is a headwind for fixed instruments, but over the long term safer, steadier, and more normalized expected returns.

Political Season Already

While it only seems like yesterday when we had a presidential election, it is hard to believe that next year, approximately this time of the year, we will have another. Recall, there will be many headlines associated with the political process, many of them possibly frightening. You know that we are careful to comment on headlines and things that have not become law, but nevertheless the frightening headlines may appear. Just remember there is a difference between a desire, speaking, debating, and a law.

Positive Seasonality Headwinds

Looking forward to the final quarter of the year, just as it gets cooler in most parts north of the equator, capital markets tend to have positive historical reference. While we are always careful to say this time is different, the Federal Reserve, if resolute in their desire, have both feet firmly pressed on the economic brakes, and as of yet have not been successful in achieving their goals.

Sincerely,

John A. Kvale CFA, CFP

Enclosure (2023 Report)