Derek J. Sinani

Founder/Managing Partner

7047 E. Greenway Parkway, Ste. 250

Scottsdale, AZ 85254


Please read page two for timely and important insights
Market Update
(all values as of 04.30.2024)

Stock Indices:

Dow Jones 37,815
S&P 500 5,035
Nasdaq 15,657

Bond Sector Yields:

2 Yr Treasury 5.04%
10 Yr Treasury 4.69%
10 Yr Municipal 2.80%
High Yield 7.99%

YTD Market Returns:

Dow Jones 0.34%
S&P 500 5.57%
Nasdaq 4.31%
MSCI-Europe 2.05%
MSCI-Pacific 1.82%
MSCI-Emg Mkt 2.17%
US Agg Bond 0.50%
US Corp Bond 0.56%
US Gov’t Bond 0.48%

Commodity Prices:

Gold 2,297
Silver 26.58
Oil (WTI) 81.13


Dollar / Euro 1.07
Dollar / Pound 1.25
Yen / Dollar 156.66
Canadian /Dollar 0.79

Macro Overview

The most recent inflation data released revealed an 8.5% annual increase, yet came in below what many analysts had expected. A consensus is forming, among economists and analysts, that inflation may be peaking. The hope is that the Fed may ease its rapid rate rise trajectory should inflation actually be slowing.

The Russian invasion of Ukraine has now entered its third month with no sign of a compromise, along with a list of international sanctions which continue to expand and impose economic duress on the Russian economy. The situation, meanwhile, continues to exasperate global supply chain constraints producing material and commodity shortages throughout various industries.

An increase in Covid cases throughout China is hampering manufacturing and distribution for various industries throughout the country delaying the shipment of finished goods to the United States as well as other countries, enhancing supply side constraints.

The U.S. dollar has risen nearly 7% for the year versus other major currencies, making imports less expensive for U.S. consumers and helping to alleviate inflationary pressures. Meanwhile, the Russian invasion of Ukraine has devalued the euro creating inflationary pressures throughout Europe, which is a substantial importer of petroleum & natural gas.

Employment costs for companies rose in the latest release from the Bureau of Labor Statistics, showing an increase in expenses related to wages and benefits for both government and private sector jobs. Rising employment costs pose a challenge to companies as they either pass along higher costs to consumers or have their margins reduced. Rising employment costs contribute to broad inflationary pressures.

Global growth forecasts were reduced by the IMF and World Bank, due to geopolitical tensions arising from the Russian invasion, which continues to inflame global supply chain issues and foster inflation. European companies are at additional risk if China and the U.S. demand falters due to an economic slowdown.

Russian energy companies are reluctant to cut further fuel sales to European countries because a loss of revenue would threaten the stability of the Russian energy industry. Roughly 70% of Russian exports are energy products such as natural gas and petroleum, while about 8% of U.S. exports are energy related. Russia’s reliance on energy exports is critical for the integrity of the country’s economy. The halt of Russian natural gas to various European countries is expected to benefit U.S. energy companies as U.S. shipments of LNG (Liquid Natural Gas) to Europe are estimated to increase over 60% in 2022 relative to 2021.

Numerous analysts are expecting the housing market to start cooling off relatively soon due to rising mortgage rates and slowing real wage growth. The concern is that as housing slows, so might GDP, as the housing industry represents roughly 20% of the nation’s economic growth.


wages grew at 5.7% while inflation rose at 7.5%

Equities Struggle – Global Equity Overview

Major equity indices ended the first four months solidly in negative territory. The S&P 500 Index fell 13.3%, the Dow Jones Industrial lost 9.25%, and the Nasdaq was down over 21% for the first four months of the year.  As of today’s writing (May 15th), the market is down nearly 20% – adding to the decline.

It is my strong belief that the current stock market correction is likely approaching a completion.  Admittedly, the correction has been a bit deeper and more proacted than I had anticipated when in late December I forecasted a market decline developing in the first quarter.  Honestly, there is still some short-term downside risk, but the risk is offset by the upside opportunity for the remainder of the year.  Once the market stabilizes and risk taking reemerges, I believe the SP500 (broad stock market) will move towards 5000 – perhaps as high as 5175-5500.  For perspective, the SP500 currently stands at roughly 4000.  This will likely mark a meaningful long-term completion of what has been a protracted bull market.  Should the market achieve these levels, this will likely become a significant “high-water mark” or “inflection point” that will warrant a much more guarded and defensive future investment posture.  My tentative timeline is roughly the first half of 2023 for this to fully mature.

Rates Rise As The Fed Tightens – Fixed Income Update

Global bond yields rose in April, with both government and corporate bond yields rising across various international regions. Numerous analysts believe that the Fed may be raising rates too fast in response to inflation data that may have caught the Fed off guard. Should economic growth start trending lower, the Fed is expected to possibly slow its rate and amount of increases.  As I reiterated last month, in retrospect, it appears that the Federal Reserve is behind the inflation curve and that the Inflation Genie is out of the bottle.  The last real battle we had with inflation was during the early 1980’s – and that required meaningfully higher interest rates before the Inflation Genie was put back in the bottle.  Does anyone remember the name Paul Volcker?  I sure do.

Some analysts and economists believe that the Federal Reserve’s trajectory of raising interest rates may be too aggressive and lead the country into a recession. Prior Fed rate hikes have historically been accomplished during periods of strong economic expansion, which is clearly not the case now.  It’s my opinion that the Federal Reserve would rather create a broad recession than allow the emergence of persistent inflation and its very negative economic implications.  I think eventual recession is the likely path we find ourselves on today, and as prudent investors, we will eventually need to greatly reduce or eliminate stock exposure (reduction/elimination not much later than the first half of 2023).  This is the most sobering conversation I’ve shared since 2007, but as usual, we will take proactive, preemptive, disciplined and methodical steps to mitigate investment risk should these negative trends further develop.

Wage Increases Can’t Keep Up With Inflation – Labor Market Overview

The most recent wage data released by the Labor Department showed a 5.7% increase in wages for the past year, yet still below current inflation annualizing 7.5%. With inflation outpacing wage growth, workers and consumers alike are experiencing shrinking discretionary income. Such dynamics reduce the purchasing power of consumers, making it difficult to maintain customary spending habits. Some economists believe that wage increases may be ending soon as companies may start to trim employee expenses and even start reducing staff should a recessionary environment evolve.  Even though wages grew at an annualized rate of 5.7% from January 2021 to January 2022, wages still didn’t keep pace with costs.

the u.s. dollar has risen over 7% for the year

U.S. Economy Slowed Down In The First Quarter – Domestic Economy

Domestic economic growth, as measured by GDP, turned negative for the first time since the second quarter of 2020, when the pandemic was in full swing. Initial reports indicated that a drop in exports was to blame, but many economists believe that a downward trend may have begun to form.Economists view a number of factors affecting growth in the U.S. economy, with no sole reason for any possible slowdown. Contributing to a pullback in expansion include exhaustion of pandemic relief funds, rising interest rates, inflation, lower disposable income, and uncertainty surrounding Covid infections. (Source: Bureau of Labor Statistics, Bloomberg)

Strengthening U.S. Dollar May Help Curtail Inflation – Consumer Inflation Dynamics

The U.S. dollar has risen over 7% since the beginning of the year driven by increasing interest rates and a flight to safety for international investors. A stronger dollar can also be a hindrance for certain U.S. companies that have a large portion of their sales overseas. Should the dollar continue on its rising trend, economists and analysts believe that the run up in the dollar will translate into lower earnings for a number of U.S. companies. Foreign investors tend to flock to the U.S. dollar as rates increase, seeking higher returns on idle cash, and during periods of geopolitical turmoil.

A challenge that emerges for U.S. multinationals when the dollar rises, is that the price of U.S. exports become more expensive worldwide. As the dollar increases in value versus other currencies, U.S. exported goods become less affordable in the international markets. Conversely, the strengthening dollar has also made imported goods into the United States more affordable, which become less expensive for American consumers as the dollar rises. (Sources:, Bloomberg, Commerce Department)


disposible annual income for the average household fell to $45,997

Disposable Income For Consumers Dropping – Consumer Behavior

As Inflationary pressures tend to drive the price of essential goods higher and faster than non essential goods, consumers are sometimes left with minimal funds to purchase what they desire.

The rapidly rising costs of gasoline, natural gas, and groceries has left many families with less disposable income. Desirable products and services such as movies, furniture, clothes, automobiles, and appliances become less attainable with inflation. In addition to rising prices, consumers are also faced with rising interest rates, elevating consumer loan rates for cars, credit cards, and mortgages.

Some economists are even calling for stagflation, when slowing economic growth along with inflation occurs. Such an environment can make it even more challenging for consumers already struggling as well as alter consumer spending behavior.

Disposable annual income for the average household fell to $45,997 in the first quarter of 2022, a $11,600 reduction from $57,597 for the same period last year. The dramatic increase in average household incomes last year were attributable to massive pandemic relief funds which have since been exhausted.

Sources: Bureau of Labor Statistics, Federal Reserve

Those 55 & Older Are Going Back To Work – Retirement Planning

Rising inflation along with no new pandemic relief funds are prompting many aged 55 and older to return to work. Labor Department data shows that the participation rate for those above 55 years old has been rising over the past few months, with over 480,000 55 plus year olds returning to the labor force. Plenty of available jobs has also made it enticing for many to reenter the work force, with over 11 million open positions nationwide.

The return of 55 plus year olds to work may postpone retirement for many, who may have been planning on retiring sooner rather than later. The dramatic rise in stocks valuations and 401k plans over the past two years positioned many for a possible earlier retirement. But with recent market valuations sliding, the prospect of retirement may be further out than desired.

Other factors encouraging a return to the workforce include vaccinations, school re-openings, more remote and flexible work opportunities, and attractive wages.

Sources: Department of Labor