Portfolio watch
With stocks in an August meltdown, Mechanics Bank Wealth Management has been telling investors to keep calm and carry on. “The Federal Reserve has been specifically working for over a year to let some air out of the job market since a too hot job market can result in higher inflation than desired,” it tells investors warning that a late summer “growth scare” has become part of the risk for investors.
Credit card debt is one reason why investors are worried about a recession and a new Bankrate survey shows that 50% of cardholders carry debt from month to month, the highest level since March 2020, with 60% carrying balances for over a year. Both numbers are up over the past year. Some 34% say inflation has made their credit card “burdens worse since the beginning of 2022.”
In a post just before the market meltdown, the Investment Strategy Group at Goldman Sachs reaffirmed its overweight view of U.S. equities. Slowing inflation and the economy “tracking” toward the group’s 2.5% target were viewed aspositive. It says a cut in the Federal Reserve policy rate “typically has been a tailwind for US equities” as long as there is no recession.
