LPWMG

This past week, our investment committee meeting in Boca coincided with significant news: the Federal Reserve cut interest rates for the first time since 2020, lowering the federal funds rate by 50 basis points. This triggered an initial rally on Wednesday, which briefly paused but resumed with strong gains on Thursday, pushing the S&P 500 above the 5,700 mark for the first time.

For the week, the S&P 500 rose 1.36%, the Nasdaq climbed 1.49%, and the Dow gained 1.62%, reaching a new all-time high by Friday's close.

With COVID-era policies largely behind us and inflation appearing under control, we may be returning to more traditional economic cycles—where growth fosters optimism. While this optimism is healthy, it can sometimes extend too far, resulting in over-lending and subsequent market corrections.

Many economically sensitive sectors have shown signs of a slowdown this year, with companies across various industries adjusting their outlooks, which has impacted stock prices. However, as we are in an election year, it's common to see short-term promises that seek to address immediate economic concerns, even when such actions might delay necessary corrections that capitalism provides to address misallocation of capital.

Capitalism has driven the strength of our economy and markets for decades. However, we are likely to see continued volatility as the year progresses, especially as political and economic factors interplay. As always, we will remain vigilant, seeking out mispriced assets and market inefficiencies in stocks, bonds, and credit.

Have a great week, and please don't hesitate to reach out if we can assist you further.

Our Best Always,

Bob

Robert O'Braitis
CEO
Chief Investment Strategist