Tag Archives: Interest Rates

October 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Here is our October 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.

Enjoy!

October 2017 Video

Break In – D Magazine Honors – Best Wealth Managers

We are super happy to be honored in D Magazines Best Financial Planner and Wealth Managers Award !!

Thanks so much and congratulations to our fellow recipients.

9-27-17 FINAL DMAG Spread

11th Consecutive Honor – John Kvale Best Individual Financial Planner

The 11th consecutive D Magazine best Financial Planner award was also in this edition and we are super happy to announce, John received his 11th consecutive nomination!DmagLogo

Wow and again thanks to our fellow recipients!

Financial Planning Tip(s)-

Social Security Increase

Don’t smirk at 2%, every penny counts! With a CPI (Consumer Price Index) increase of 2% year over year, the Social Security Administration passed the good news on earlier this month. Take that 2% increase and run!

img_0937

Capital Market Comments

Rates are Slowly Ticking Up

After much silence on interest rates, we have taken notice of recent movement as the global economy begins to pick up steam … Overseas seems to really be getting their act together.

10-24-17 10 Year Treasury

Consumer Sentiment Also Higher

The University of Michigan Consumer Sentiment hit a post “Great Recession” high this month.

With two thirds of our US Economy being based on consumer consumption, this bodes well for the Economy.

10-13-17 Consumer Sentiment

See you at the end of November, which also features our very special Blooper Thanksgiving Video from a few years ago!

Happy Fall Season!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Timely discussion of Rates this week … Friday … Travels on the Horizon …

Our Hmmm interest Rate post on Wednesday of this week turned out to be a bit prophetic as Wall Street Turned their “Short Term” eyes toward rates and raised a brow.

JPMorgan Rate Chart

While rates MAY eventually provide a headwind to capital markets, we agree with our friends at JPMorgan and their excellent chart showing MUCH higher levels of rates will be a formidable headwind.

jpmorgan-rates-too-low-graphAhhh… Today is a Friday, and travels are on the horizon next week, but that is next week… Enjoy your Friday, your weekend, and time with those special!

Have a Great Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

Hmmm … Rates are slowly rising … A good thing!

We have long crowed that low rates were great to get us out of the great recession of 07-09, however they have caused more harm than good by being too low for so long.

Rates are Creeping Up

Higher interest rates can be a function of inflation, growth or expansion. These are missing components of our post great recession recovery.

But Wait!

10-24-17 10 Year Treasury

Yes, we have been here before, let’s keep an eye on this most recent move, as you can tell from the chart, a move above the current level may mean higher again!

Have a great, sneaky higher rate day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Technology Upgrade Update – Rates Rise – Friday

On Monday of next week we hopefully successfully do a major upgrade to our internal email systems. This will mean each of our company emails will be down, but not all at the same time. As the switch occurs, while promised nothing will fall through the cracks by our IT team, if you happen to send an email and you have not heard from us, please re-send it just to be safe.

Rates

Ok, it’s a Friday so we will be brief, Janet Yellen, head of the Federal Open Market Committee (FOMC) notched another rate increase under her belt without disrupting the capital markets. Once thought impossible, so far, slow and steady (tortoise- not the hare) is winning the interest rate normalization race.

This is a good chart of the ever increasing rates… finally !

Fed Funds Rate 6-15-17 fredgraph

Ahhhh…. Today is a Friday… enjoy your day and your weekend !

Talk to you 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.
www.jkfinancialinc.com
www.street-cents.com

 

Interest Rate Increase and No One Cares? We do!

It is very interesting to watch the once ferocious markets hate a possible interest rate increase, only now to greet it like family.

Interest Rate Increase Today

It is highly likely the FOMC (Federal Open Market Committee) led by Janet Yellen will raise short term interest rates up to the 1% threshold at their announcement later today. What is more interesting is just a few quarters ago even a whiff of a raise threw the capital markets into a tailspin.

Past rate increase events:

  • The US Dollar soared as other countries across the world continued to push their rates down.
  • US Capital Markets threw a temper tantrum in dispute of a raise.
  • Headlines beamed with fear of the crazy FOMC raising rates.

Probably our favorite chart from our friends at JPMorgan- higher rates can be a good thing

There will be a day that it does matter. Rates can go too far which results in an inverted yield curve (short term rates are higher than long). For now it seems everyone is on the same page and digestion of higher rates is occurring.

Have a Great “Higher Short Term Interest Rate” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

Everybody is Happy! Q 1 Cover Letter

Everybody is Happy!

From Bloomberg Consumer Sentiment to Gallup Polls to the Conference Board and to our University Of Michigan Survey of Consumers (Multiple Polls reviewed in detail in our most recent Newsletter-coming to you soon) all are pointing higher, with some even pointing to all time highs.

A more pro-growth tone seems to have put wind in the sails of those polled as well as capital market participants. Heck, the most recent quarter even garnered an interest rate increase of a small .25% in the shorter term Federal Funds rate. Looking back just over a quarter and including December of 2016, there are now two interest rate increases under the FOMC’s (Federal Open Market Committee’s) belt. The first rate increase in this economic cycle, post 07-09 Great Recession started in December of 2015. According to many, created the “record breaking” rocky start a year ago. Fast forwarding to today, market participants and the economy for that matter, seem to welcome a normalization of short term rate increases.

Speaking of rate increases, under normal circumstances all other items being held equal, which then never are, interest rate increases are a muzzle on the economy and in many cases are the cause of a larger slowdown or recession. The problem with this comparison is rarely have short term rates been zero, which they were held at for over five years in this economic cycle. It is possible that an increase of rates from such a low level to a more normal level may actually be energizing rather than resistance as past comparisons may show.

Is there a downside?

Capital markets look forward, usually 6-12 months. All this positive sentiment has led to stretched valuations from a historical point. The current Price/Earnings ratio, again shown in our latest newsletter, finds itself at 26, with a long term average of 15. Just as economic cycles do not die of old age, capital markets do not go down just because their valuations may be stretched. Higher valuations can lead to less room for errors, not a time to let our guards down and also not a time to be swinging for the fences, however valuations can return to normal simply with all this positive sentiment translating into higher world capital market earnings. Said another way, “Growing into the current Valuation.” Time will tell, and we will be watching closely.

Spring seems to finally have sprung, enjoy !

Sincerely,

John A. Kvale CFA, CFP

Enclosure (Q 1 Report)

Q2 2017 Newsletter Podcast and Audio Review By John Kvale

Here are a few of the topics discussed in our new Podcast, Audio Video review.

  • David Cameron Speaks at length
  • University of Michigan Sentiment Indicators
  • Updated Price Earnings Multiple
  • Three Travel Tips to save you aggravation and time

Q2 2017 Newsletter Podcast and Video Review

 

Have a Great Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com