Market Watch: Airlines’ Struggle, Inflation Data, Oil Price Surge, and Labor Strikes

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Market Watch: Airlines’ Struggle, Inflation Data, Oil Price Surge, and Labor Strikes

SPY
S&P 500

Last Week: -.13%
YTD: 17.23%
1 Year: 15.94%

DIA

Dow Jones Industrial Average

Last Week: -.16%
YTD: 6.05%
1 Year: 14.08%

ONEQ
NASDAQ

Last Week: -.24%
YTD: 32.26%
1 Year: 20.02%

Russell 2000
Month: -2.41%
YTD: -5.98%
1 Year: 2.74%
Large Growth

YTD: 34.94%
1 Year: 23.40%

*As of 8/31/2023

Large Value

YTD: 6.59%
1 Year: 13.25%

*As of 8/31/2023

Airlines

American Airlines and Spirit Airlines warned higher costs will trim profits during the summer quarters. American also stated the newly negotiated pilot labor deal will also eat into profit margins. Frontier Airlines is seeing lower demand for newly booked flights as of late. “In recent weeks, sales have been trending below historical seasonal patterns” warned Frontier. We will be watching their Q3 earnings when reported in mid-October.

August Inflation Numbers

Inflation numbers came in higher than expected in August. The Consumer Price Index (CPI) rose 3.7% on an annual basis. The primary cause was a spike in gasoline prices during the month. Economists expect this spike in inflation to be temporary as we look for gasoline prices to come down. Supply and demand imbalances are still an issue even 3 years since the Covid-19 pandemic. Other inflation contributors include vehicle insurance, recreation, and new vehicle prices all up from August 2022.

Oil – Texas Tea

Oil prices hit their highest levels this year on Friday. The increase in prices comes on the heels of the expectations of tighter oil supply after Saudi Arabia and Russia aim to draw down inventories and extend output cuts this year. Some analysts expect oil to hit $100 per barrel soon.

Record Profits

The Auto Workers Union strike began at companies such as General Motors (GM), Ford (F), and Stellantis (STLA). President, Joe Biden, spoke on Friday. “The companies have made some significant offers, but I believe they should go further to ensure record corporate profits mean record contracts for the UAW,” said Biden. Years of investing in updating their factories have led to greater efficiencies resulting in lower costs to make vehicles. The goal to shift to more electric vehicles to reduce emissions is going to cut into future profits in the short-term as they ramp up EV production. Will the union labor strike lead to supply issues for car deliveries?
  • Alex Wolfe

    Alex is a Certified Financial Planner™. He brings nearly a decade of experience working with individuals, families, and business owners. Prior to working for Base Wealth Management, Alex worked for Fidelity Investments and an independent wealth management firm in Venice, FL. Through many years of practice, he specializes in helping clients navigate their financial goals through comprehensive financial planning. He received his bachelor’s degree in economics from Texas A&M University.

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2022 Tax Document Information

As a Base Wealth Management client, you should receive your paper tax documents via mail in the coming weeks. Or, if you previously had an online account with Pershing’s NetX360, you should be able to access your 2022 tax documents through that portal. 

If not, or if you experience any issues, please reach out to Tim O’Brien (tim.obrien@intervestintl.com).

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