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After turbulent 2022 for economy, local financial analysts break down what’s in store for new year

After turbulent 2022 for economy, local financial analysts break down what’s in store for new year

Retailers remain giddy from consumer holiday spending, and 9-to-5ers using the last of their vacation days still may not be ready to look toward the next 12 months.

But with each new year comes economic uncertainty, particularly after a 2022 that saw uncompromising inflation and steadily rising interest rates.

To that end, the Tulsa World recently asked a pair of local financial experts to weigh in on what 2023 has in store for people trying to make ends meet.

Here are takes on a number of issues from Brian Henderson, chief investment officer for BOK Financial, and Jake Dollarhide, chief executive officer of Longbow Asset Management.

In an effort to curb inflation, the Federal Reserve in December raised interest rates for the seventh time in 2022, placing the current fed rate in the range of 4.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}-4.50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, the highest level in 15 years. Are these hikes making a difference?

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DOLLARHIDE: “As painful as higher interest rates are, prolonged inflation is even more painful. It’s kind of like like ripping the Band-Aid off. That’s what the Fed has done this year is rip the Band-Aid off.

“But gas prices peaked in May. Grocery prices seem to be stabilizing. So it is working. What’s spooking the market is the inability to know what the high-water mark is for the Fed. Is it 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} or is it higher?”

HENDERSON: “We are heading in the right direction with re-balancing supply and demand in the economy. Yes, the rate hikes are working but we still haven’t yet felt the full brunt of what the Fed has had to do. Monetary policy operates with some level of a lag.

“In the first quarter, we are going to get a much better sense of the shape of the U.S. economy and what condition it’s in. … I’m expecting another good December as far as growth in the overall economy. Once we get after the first of the year, I’m expecting inflation rates to continue to trend down some.”

Is Oklahoma — and particularly Tulsa — better positioned than other sections of the country to handle this economic rollercoaster?

DOLLARHIDE: “People ask, ‘are we in a recession?’ The answer is probably ‘yes.’ But I don’t think this is an accurate way to view things. Look at oil and gas. When oil went negative $32 a barrel in the fall of 2020, energy was in a recession and tech was in a boom. Now … energy is in a boom and technology is in a recession. There are parts of every city in every state that are doing well and some that are not doing well.

“That’s the way I look at it. Oklahoma is very heavy energy, very heavy health care, very heavy education. These are things that are going to keep on churning during a recession.”

The annual inflation rate for the United States is 7.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, down from a high of 9.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in June. Although inflation seems to be slowing, it remains far above the Fed’s 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} target. How much can we expect it to drop?

HENDERSON: “Two percent is achievable. I hope it’s not necessary for us to have a severe recession to get there. But it certainly is going to require higher unemployment rates and slower economic growth. It’s our forecast that we are going to have less than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} economic growth here this year in 2023.”

DOLLARHIDE: “Even the Fed can’t hide the fact that the long-term inflation rate the last 100 years is 3.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. So, I would say the Fed’s real target is 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} at this point. If we get down to 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, I think we will be fine. I think we can be at 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} by summer.”

Workplace retirement plans have taken a substantial hit in this economy. How should we frame this in the long term?

HENDERSON: “In 2022, both stock and bond markets weren’t prepared for the rise in inflation and the subsequent increase in interest rates. That’s why both bond and stock prices that negatively impact 401(k) plans this year were hurt so bad.

“It does make sense to move small percentages one way or the other. If you typically have 70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in equities and 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in bonds, lean more heavily on bonds because they do give you a better level of protection and if we do go into a recession, they are going to perform better than stock.”

What can we look forward to locally in the marketplace in 2023?

DOLLARHIDE: “2020 was a nightmare. No one had a 102-year playbook on a pandemic. 2021 was an amazing year. As for 2022, we have playbooks on inflation. We have playbooks on war. We have playbooks on interest rates. We have playbooks now on COVID and lockdowns and supply-chain restraints. But unfortunately, it wasn’t just interest rates. It was a five-headed monster.

“I think we’re destined for a much better year. Whatever the Fed needs to do, I would say they are 85{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 95{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} done.”

HENDERSON: “Because companies allow the more flexible working arrangements, working from home, we are attracting people from both coasts who are selling their expensive homes, looking for more Tulsa lifestyle and culture. Tulsa is wonderful place to raise a family certainly, and it’s affordable.

“The future is bright for Tulsa.”

Stories by Curtis Killman, Michael Dekker and Randy Krehbiel.



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Managing your money in economic downturns: A financial planning guide for turbulent markets | SVB Private

Managing your money in economic downturns: A financial planning guide for turbulent markets | SVB Private

To assistance you navigate choppy economic cycles, have much more successful conversations with advisors and bolster the performance of your economical programs, we have curated a record of wealth management materials posted by our staff of pros. We endorse making use of the selections under as a setting up position when reexamining your financial ambitions during moments of financial uncertainty.  

Are you and your partner geared up for a risky current market? 

Quickly realize how effectively you regulate cash as a few.   

Research have demonstrated that financial disagreements can have a considerable affect on the well being of a marriage. Having said that, cash disputes seldom happen when money are flowing. For the duration of times of financial instability and individual hardships, a powerful romantic relationship can support you temperature fiscal storms. If you and your partner have conflicts concerning economic matters, completing the quiz underneath may aid you avoid long-time period difficulties. The 3 guidelines talked about in the report can also aid you address common family fiscal issues.  

Uncover your family’s economical savviness with this 5-minute quiz 

Should really you shift your primary residence to a tax-advantaged state? 

Guarantee you completely realize the pertinent tax legislation to figure out if shifting is financially beneficial. 

Tax legislation enacted in 2017 have negatively impacted high-earners residing in higher-tax states. Specified the fluid doing the job setting introduced on by Covid, moving to a tax-helpful state to help save income has grow to be more feasible. However, with the recognition of a lot more intricate compensation packages and an increasingly fickle economy, there are several components to consider before location your relocation plans in movement. 

See how tax rules may perhaps affect a go 

Are you acquainted with all the variables that outline residency? 

Get up to pace with household tax methods with our alter of domicile checklist. 

Working with the subsequent checklist can assist you make a much more educated choice relating to a alter in residency. Guarantee that you evaluate the housing, own, skilled, economic and social elements, as properly as the influence an economic downturn may have on your prospects. When contemplating switching your legal domicile, it’s vital to recognize that the conditions can differ significantly from condition to condition. 

Assessment the checklist for help setting up a thriving shift 

Your portfolio: 7 techniques to think about inflation during turbulent moments 

Confronted with inflation anxieties, a more time-expression technique has been an productive decision for traders.  

Inflation proceeds to be a incredibly hot subject, and rightfully so. By examining inflation’s historic effect on the financial system, we can lessen some of the strife brought on by latest headlines and better fully grasp inflation’s influence on your expense portfolios. 

Go through the publish to assistance maintain inflation concerns at bay 

Have you constructed a complete prosperity advisory crew? 

Unify your advisory staff to weather conditions interior and external troubles and bolster your family members legacy.  

When the time arrives to build a generational legacy, the people that have been most effective have included an additional ingredient into their advisor groups past prosperity management and tax mitigation. Loved ones governance advisors have been very productive in facilitating the transfer of generational wealth during a huge vary of financial climates. Tom Rogerson, President and CEO of GenLeg Consulting and SVB Private’s Jason Cain share the affect governance advisors can have on prosperity preservation. 

Explore the impact family members governance  can have on wealth 

Do you need to have to integrate prenuptial and postnuptial arranging into your estate plan? 

Analyzing the important factors of nuptial agreements. 

Discussions relating to prenuptial and postnuptial preparing for family members can be complicated to navigate throughout any lifestyle stage or economic natural environment. To ensure that assets are distributed as intended and fascinated events and their family members are guarded, pre and postnuptial agreements often become key factors of estate programs. 

See how you can combine pre and postnuptial designs into your estate designs 

How dependable is your document filing procedure? 

Meticulous recordkeeping has grow to be an integral portion of tax period and portfolio scheduling. 

As fluctuations in the economy have quite a few revisiting their expenditure approaches, time organizing economic data is also time effectively expended. Ideally, trying to keep up with doc submitting should really happen all calendar year lengthy, not just when we are having completely ready to file our tax returns. Effectively-organized data make it less complicated to talk about wealth plans with your advisors and will allow your staff to be extra effective. Listed here are some solutions to aid preserve your data in wonderful form all over the calendar year. 

Guarantee your fiscal information are in buy this yr 

What do wealth advisors bring to the table throughout a downturn? 

See how advisors can assist bridge the gap between choppy marketplace problems and your long-phrase plans. 

In a turbulent current market it is critical to retain a stage head as you go after your monetary targets. Chief Investment Officer, SVB Non-public, Shannon Saccocia, and SVB Private Prosperity Advisors Flavia Trento and Ryan Fox go over the many benefits advisors offer you clientele that go very well beyond expenditure tactic implementation. 

See how a prosperity advisor can aid hold your financial objectives on track 

Are you employing debt strategically? 

See how borrowing can provide enhanced adaptability and become an integral component of your prosperity program.  

Have you at any time wondered how to use debt as a strategic instrument to build prosperity? SVB Private’s Gerald Baker sits down with Karen Roses to examine how applying debt and leverage can be a important factor in a holistic prosperity prepare during a extensive assortment of economic environments.  

Study how debt can grow to be a practical portion of your strategic prosperity prepare 

If you are intrigued in further tactics for managing your income throughout financial downturns, we would be satisfied to be a reliable useful resource for you. As you think about how to safeguard your portfolio through occasions of volatility, our web-site offers more wealth administration insights and marketplace commentary. For far more data, get to out to an SVB Personal Wealth Advisor or take a look at our on the internet Insights today.  

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Stocks Waver on Wall Street as Turbulent Trading Persists | Business News

Stocks Waver on Wall Street as Turbulent Trading Persists | Business News

NEW YORK (AP) — Shares wavered between compact gains and losses in early morning buying and selling on Wall Road Wednesday as anxieties about inflation, mounting interest premiums and a prospective economic downturn weigh on the broader industry.

The S&P 500 fell .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as of 11:07 a.m. Jap. The Dow Jones Industrial Typical fell 94 points, or .3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}., to 30,873 and the Nasdaq fell .2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Engineering companies gained ground and helped examine losses from energy providers. Chipmaker Nvidia rose 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and Exxon Mobil fell 4.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} as crude oil selling prices eased.

Important indexes have been swinging amongst sharp losses and gains on a day-to-day, and in some cases hourly, foundation. The broader marketplace, while, is nonetheless mired in a deep slump that has dragged the S&P 500 into a bear market place, more than 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} underneath its most latest significant.

Wall Street’s key problem facilities all around the Federal Reserve’s work to rein in inflation, and the chance its plan could send the financial state into a economic downturn.

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Inflation has squeezed businesses and people all over the year. Its grip tightened just after Russia invaded Ukraine in February and as China locked down quite a few essential towns to contain mounting COVID-19 scenarios, which worsened source chain complications.

Surging oil selling prices worsened inflation by sending gasoline rates in the U.S. to report highs. U.S. crude oil selling prices are nonetheless up 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the 12 months, but have been slipping all through the week in a welcome signal for the industry hoping for any signal that inflation could be easing.

U.S. crude oil price ranges fell 3.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Charges on Tuesday settled down below $100 a barrel for the very first time since early May well.

Central banking companies have been boosting curiosity premiums in an endeavor to mood inflation. The Fed has been significantly intense in its change from historically lower curiosity premiums at the peak of the pandemic to unusually significant level increases now. That has lifted worries that the central bank could go much too much, hitting the brakes too challenging on financial progress and bringing on a economic downturn.

Electricity price ranges easing now could signify lessen gas charges in a several months and could signal that inflation is peaking, alongside with a cooling housing sector.

“This normally takes the strain off the Fed,” reported Katie Nixon, chief expense officer for Northern Have faith in Prosperity Management. “If we can see gasoline selling prices go down, that will pull by to customer sentiment and that could give the Fed the capability to at the very least consider some of the pressure off.”

Wall Avenue will get an additional update on the Fed’s hottest imagining this afternoon when the central financial institution releases minutes from its most the latest plan meeting.

Traders are intently monitoring financial knowledge for clues about inflation’s affect, its trajectory, and what that implies for the Fed’s situation shifting ahead. A govt report on job openings in May beat economists’ expectations in a indicator that the work current market continues to be healthier. A report on the U.S. expert services sector showed that the sector’s progress slowed much less than anticipated in June.

Wall Road will be intently viewing the U.S. government’s launch of employment information for June on Friday.

European markets have been broadly larger.

The euro is at a 20-year very low to the greenback on concerns above disruptions to vitality provides. European Fee chief Ursula von der Leyen stated the 27-country European Union needs to make crisis ideas to get ready for a comprehensive minimize-off of Russian gas amid the Kremlin’s war on Ukraine.

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