Weekly Market Commentary - September 15th, 2022

The Markets

Central banks are hawkish. Stocks popped higher, anyway.

Last week, U.S. Federal Reserve officials emphasized their commitment to tightening monetary policy to lower inflation. Several indicated they anticipate a third consecutive rate hike of 75 basis points, reported Craig Torres and Matthew Boesler of Bloomberg.

The European Central Bank (ECB) announced a rate increase of 75 basis points and revised its expectations for inflation higher last week. The ECB emphasized that tightening will continue and more rate hikes are likely. European stocks rose following the ECB’s announcement, reported Karen Gilchrist and Katrina Bishop of CNBC. Similarly, the Bank of Canada also increased its target rate by 75 basis points last Wednesday.

Investors seemed to disregard the actions of the central banks as U.S. stocks ended a three-week losing streak, with the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite all finishing the week higher. North of the border, the S&P/TSX Composite index also increased in value, bringing an end to two weeks of losses.

Last week’s stock market gains were a bit confounding, especially when you consider the fact that money has been flowing out of global equities and bonds and into cash and investments that are perceived to be safe havens. The stock market’s performance may be the result of investors whose only option was to buy shares. Bloomberg’s Lu Wang and Isabelle Lee explained:

“In a week that saw discretionary buyers beat a quick retreat from risky assets, another set of traders stood up to halt a three-week plunge in the S&P 500: those with little choice but to buy. They included short sellers, whose rush to cover lifted stocks [that] they’re betting against to gains of more than twice the market’s. Options dealers were another bullish force after getting caught needing to boost hedges by buying stocks when they rise.”

While there remains a good deal of uncertainty about the future in the financial markets, we remain vigilant and are monitoring the situation closely. If you have any questions or concerns about your investment portfolio or recent market events, please don’t hesitate to give us a call.

Source: FactSet

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Stay safe when making peer-to-peer payments

Peer-to-peer (P2P) payment apps let you quickly send money to other people from a bank account, credit card or another source. All you need is their phone number, email address or username. P2P apps are convenient ways for friends to split the bill for dinner, roommates to pay their share of utility, streaming, or other bills, and parents to send money to children, reported Ellen Sheng of CNBC.

Before getting too comfortable with the convenience of P2P apps, it's important to understand their risks and limitations. “No app provides fraud protection beyond tools to protect your account. If you authorize a payment and the transaction turns out to be a scam or fraud, there’s not much you can do. If your account is hacked, you can reach out to customer support for help. In any case, treat your electronic payments with the same care you apply to cash payments,” reported The New York Times’ Wirecutter.

According to Consumer Reports, there were more than 70,000 reports of fraud in mobile payment apps in 2021. Here are a few things to consider and some steps to take to protect your money when using P2P payment apps.

• Download apps from a safe source. Only download apps from recognized app stores. Banks and businesses that offer payment apps often have links on their websites, according to Malwarebytes Labs. If you’re not sure whether the app source is legitimate, ask someone you trust for help.

• Enable security settings. Use the account settings to turn on additional security measures, such as two-factor authentication. Also, if you will be making payments via phone, make sure your phone is protected by a password, fingerprint identification or facial recognition.

• Don’t send money to strangers. Most apps recommend using P2P apps only with friends and family. That’s because, once you send the money, it’s gone. If a typo results in the transfer of $500 rather than $50, the mistake isn’t correctable unless the receiver sends the overpayment back.

• Check the information twice. Some banks limit the amount that can be sent through P2P apps because transactions cannot be cancelled. So, double-check the phone number, email address, or username before you choose “send”.

Digital transfers are handy. That may be one reason P2P payments and digital banking are becoming more common. To stay safe, make sure to protect your login information and know who is receiving the money.

Weekly Focus - Think About It

“I know of no single formula for success. But over the years I have observed that some attributes of leadership are universal and are often about finding ways of encouraging people to combine their efforts, their talents, their insights, their enthusiasm and their inspiration to work together.”

— Queen Elizabeth II

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