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A Breath of Fresh Air

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Happy Thursday!

Things may be finally cooling down, with the weather and the economy. Gas prices are at their lowest level in over 5 months. Higher mortgage rates are already pointing to a saner housing market, with fewer buyers and builders slashing prices.

Lately signs of slowing inflation have been like a pleasant breeze on a hot day to the stock market. Investors hoping this all means the Fed will go slower on rate hikes have pushed share prices higher. In fact, the S&P 500 has risen for each of the last four weeks. Time will tell if this is a bit of summer heat-induced delirium or if things are really moving in the right direction. Our only advice to FWIW readers is to remain focused on the long-term and not the daily ups-and-downs of the market. And drink lots of water.

This week also saw the Inflation Reduction Act actually signed into law. For those interested in a brief overview, we discussed it last week and this is a great chart of all the energy transition tax credits and incentives in both the IRA and the Bipartisan Infrastructure Law passed in November. For those looking to see it in action, the Department of Energy was super speedy in almost immediately releasing a list of EVs that may be eligible for the up to $7,500 tax credit included in this bill.

Also noteworthy for investors is the 15% minimum tax rate for large corporations and the first ever tax on stock buybacks. Analysts say these won’t adversely affect most companies or change their behavior. But as one columnist writing on stock buybacks put it, “The horse has left the barn.” Stay tuned.


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