Uncomfortable Doesn’t Mean Unhealthy

The Fed is back in hiking mode, and global central banks are following hikes; the 10-year Treasury briefly crossed 5%, oil remains above $100, and questions around AI spending haven’t disappeared. Yet the economy continues to grow, the labor market remains resilient, and corporate fundamentals haven’t shown signs of structural deterioration.

That is the core tension we are navigating: the price of money has gone up considerably, but the fundamental engine underneath the market is still running.

Top 5 Factors This Week
 

1. The Fed is Back in Hiking Mode

The Fed raised rates by 25 bps, taking the target range to 3.75%–4.00%. The story wasn’t the hike itself; it was the message. Growth remains solid, but inflation remains a concern.

2. The 10-Year Touched 5%

This remains one of the market’s most critical metrics. The 10-year hit 5.01% before pulling back toward 4.95%. At 5%, risk-free Treasuries set a high valuation hurdle for risk assets.

3. Oil Remains the Inflationary Wildcard

Brent Oil pulled back from $110 to around $105. That provided brief relief for both bonds and stocks, but elevated levels keep pressure on inflation and interest rates.

4. The Economy Isn’t Rolling Over

Jobless claims remained low and retail sales held up well, while the Fed highlighted productivity gains and capital investment. Strong economic data supports corporate earnings, but it also provides the Fed room to remain hawkish.

5. AI and Tech Found Their Footing

Chips and major tech names rebounded following a rough period. The market’s question is: are we seeing multiple contractions driven by higher rates, or a deceleration in the cap-ex cycle? Current fundamentals point to interest rates.

3 Things We’re Watching Next Week

• Where the 10-year settles. Staying under 5% gives growth stocks some room to work with.
• Whether oil can get back under $100. That would take real pressure off the inflation story.
• Whether the data comes in soft but not weak. Slower growth, that’s still growth, is probably the best outcome the market could ask for right now.

The Path Forward: Constructive, but Cautious

The next few months may be uncomfortable, but uncomfortable does not mean unhealthy.

The market is adjusting to higher interest rates and the cost of money. It will require greater discipline on earnings quality, cash flow durability, and valuation multiples. Expect volatility and a widening performance split between quality businesses and speculative names.

Noise along the way is a given. Currently, the data indicates that the economy is expanding, earnings and profitability remain intact, productivity gains are holding, and key investment themes remain active.

We remain constructive but cautious, focusing allocation on high-conviction opportunities in this environment.

Investment Advisory Services offered through Expressive Wealth, LLC. All investing involves risk, including the potential loss of principal. Market volatility may significantly impact the value of your investments. This communication is provided for informational purposes only and should not be construed as personalized investment advice or a recommendation of any particular security, strategy, or investment product. Information has been obtained from sources believed to be reliable, though not independently verified. This report does not represent a specific investment recommendation. The opinions and analysis expressed herein are based on Expressive Wealth research and professional experience and are expressed as of the date of this report. We recommend consulting with a qualified financial advisor to develop a strategy that aligns with your financial goals and risk tolerance.

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