Moran Monthly Digest: Sept. 2023

September 6, 2023

Dear Valued Clients,

September is here, and with it marks the start of the busier season in Naples as many of our seasonal residents return. We are looking forward to hosting many of you for our Private Client Welcome Back receptions in October and November. The email invitations were sent out a few weeks ago and the physical invitations were mailed this week.

We are equally excited to inform you of a new investment opportunity: we are now offering alternative investments for our clients who have over $5 million in Assets Under Management (AUM) with us. This move is aligned with our commitment to continually enhance our investment offerings with options that resonate with your financial goals. Please reach out to your financial advisor if you are interested in exploring how alternatives may be appropriate in your allocation. You may also find more information on page 6 of this newsletter.

Turning our attention to the market, current indicators suggest a high probability of a recession occurring by the middle of next year. Several market stressors are contributing to this outlook: an overvalued market, relentless inflation, and noticeable liquidity constraints with banks now more hesitant to lend. Moreover, the dwindling savings accumulated during the COVID era and a spike in car loan defaults—the highest in twenty years— foreshadow a potential downturn in retail sales, negatively affecting profitability margins. In a market where returns have been exclusively driven by the expansion of price-to-earnings (P/E) ratios, these factors are converging to create a ripe environment for a significant economic slowdown, if not an impending recession.

This is underscored by one of the longest and deepest inverted yield curves, a trend we foresee persisting due to stagnant long-term rates and the Federal Reserve’s strategy to maintain elevated short-term rates. In this climate, growth stocks, which generally falter amidst higher rates, are precariously positioned…

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This commentary is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The views expressed are those of the author(s) as of the date of publication and are subject to change without notice. Past performance is not indicative of future results.

This material may have been prepared using data and analysis from a variety of sources, including but not limited to: Bloomberg, FactSet, Morningstar, S&P Global, Moody’s, Refinitiv, Capital IQ, CRSP, FRED, IMF, World Bank, OECD, and other third-party research providers. Additionally, portions of this content may have been generated or reviewed with the assistance of artificial intelligence tools, including OpenAI’s large language models or similar technologies. While we believe these sources to be reliable, we do not guarantee their accuracy or completeness.

Alternative Investments (e.g., private equity, hedge funds, real estate) are speculative, illiquid, and carry high risk, including potential loss of principal. They are not suitable for all investors. Diversification does not guarantee profit. Consult your advisor regarding suitability.

Moran Wealth Management is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. For more information about our services, fees, and potential conflicts of interest, please refer to our Form ADV Part 2A, available upon request.