Dear valued client,
Markets lost slight ground this week after an extremely encouraging start to the new year.
Key economic data was released this week, shedding light on the state of the economy and inflation’s overall influence. The Producer Price Index (PPI) came in at 6.2% in December, compared to 7.3% in November. The PPI captures what suppliers charge businesses and other customers for products sold, and often signals the future direction of consumer prices. This is encouraging news because if prices are easing earlier in the supply chain, this will have a beneficial effect on the price consumers ultimately pay for their goods and services.
Speaking of consumer spending, retail sales for the month of December were also released. Sales fell 1.1% in December – which is usually a time of hyper-spending. People’s moderate spending is healthy in a high-inflation environment, but hopefully, the pendulum doesn’t swing so far in the direction that would make the economy constrict for an extended period of time.
In employment news, Microsoft announced it will lay off 10,000 people. Amazon and Google followed suit, announcing layoffs of 18,000 and 12,000 employees respectively. This comes on the heels of other major corporations such as Meta and Goldman Sachs letting people go. Labor is often one of the largest expenses companies have to deal with, and following the earnings plight in 2022, many companies are looking for convenient ways to free up extra cash flow. My hope is that the Federal Reserve will notice higher interest rates are having their desired effects on the economy and will act accordingly in their next meeting on Feb. 1.
I’d like to close this week’s blog with another passage from Robert Greene’s The Laws of Human Nature. This time, from the chapter titled Change Your Circumstances by Changing your Attitude, which highlights the importance of one’s attitude in life as it is ultimately the lens through which you see the world. It reads,
“Each of us has a particular way of looking at the world, of interpreting events and the actions of people around us. This is our attitude, and it determines much of what happens to us in life. If our attitude is essentially fearful, we see the negative in every circumstance. We stop ourselves from taking chances. We blame others for mistakes and fail to learn from them. If we feel hostile or suspicious, we make others feel such emotions in our presence. We sabotage our careers and relationships by unconsciously creating the circumstances we fear most. The human attitude, however, is malleable. By making our attitude more positive, open, and tolerant of other people, we can spark a different dynamic – we can learn from adversity, create opportunities out of nothing, and draw people to us. We must explore the limits of our willpower and how far it can take us.”
Have a terrific weekend,
PW
