Hello All,

Perhaps I should begin this letter on a positive note (and call it “two” steps forward, one step back, like a good marriage). Susie and I are about to celebrate our 30th wedding anniversary and we just returned from a wonderful anniversary trip-taken in September for weather reasons. We have been married more than half of our lives and happy to be that way.

As far as the economy, and the markets, it has been and will continue to be one step forward, one step back for the foreseeable future. Best we accept this with eyes open to avoid unnecessary panic or poor decision making.

What do I mean by one step forward, one step back? Well, for example, any “good news” data points (such as strong employment numbers or good earnings reports) have been interpreted as “bad news” because they indicate that the economy is resilient, thus demand for goods and services remain strong, hence prices are likely to stay high, preventing inflation from weakening, therefore requiring the Fed to stay on its path of raising interest rates until inflation abates, all of which implies an impending recession. (Wow! My childhood English teachers would attack THAT run on sentence with red ink!). 

So, where ARE we? After looking at my last market comment in June, we are pretty much where I expected we would be. A tug of war between some quite positive economic fundamentals and a Fed who is focused on reigning in inflation and has publicly acknowledged that it could and likely WILL cause economic pain for US citizens. Let me translate: we are in a recession. Trouble is, no one knows when it will end, how mild or severe it will be or how long it will last. Yes, we could see a “soft landing” and avoid actual recession but I’m not betting on it. The Fed has had to act with more aggressive rate increases than it previously predicted and inflation has not come down as quickly as it had hoped.

Remember my last letter to you? The Glass half empty negatives? (Ukraine: gas price inflation, political unrest, fear, worry, and inflation of food costs later this year and beyond, core inflation, the Fed, bear market, bonds down.) “We have essentially hit a bear market and I expect us to bounce along in this range for a while.”  Well, those factors are all still around. But I also listed many positive fundamentals, low unemployment, lots of cash in people’s pockets, solid spending, good corporate earnings, etc. I pointed out that the “economy is cooking” and that is still the case. BUT, as a result of Fed moves, we are seeing slowing economic signs, particularly in housing and mortgages (home purchases down, prices stagnating or dropping). I also said that I expected a recession, probably in 2024. Now that more time has passed, and the Fed has become more aggressive, I will move that up to 2023. Recovery could come in 2024 but it’s too soon to guesstimate on recovery.

What you need to focus on are these few thoughts:

  1. The market usually bottoms 2-6 months before a recession ends and the economy begins its recovery*. So, if recession hits in 2023 and the ECONOMY recovers in 2024, then the MARKET should begin its recovery sometime in 2023. That’s not too far away. Time will tell but I do not want to miss the market recovery, especially since the biggest upward moves typically happen in the early stages. This is when the majority of people are still panicking and worrying about the recession. So, I’m still suggesting you stick with your plan and ride out the bumps.
  2. After the initial market drop in February ’22 and a weak recovery in April, we have been bouncing along a bottoming process since June 17th. After June we had a steady improvement in the market as more investors thought the Fed would “pivot” or pause on rate increases. That was silly and I did not buy into that line of thinking. Somewhere around August 15th the Fed came out and delivered the unwelcome news that they would continue to be aggressive until they saw inflation coming down and regretted that this would probably “cause pain” for the economy, workers, etc. The S&P 500 index reacted swiftly to the downside and last week set a new YTD low on Friday, 9/30, just below the previous June low. Monday and Tuesday we had two terrific up days. Folks, this is the way I believe it is going to go for several weeks, perhaps even months…one step forward, one step back, forward, back, etc.
  3. We DO know that, aside from recovering well before any positive news on the economy, the market usually moves very quickly to the upside in the first leg of recovery and doesn’t come back down to give you a second chance to get in. And by the time the economy is showing signs that the storm is clearing, the market has moved significantly to the upside *. I want you to be there for that upside. Along the way we will continue to collect dividends from your high-quality dividend payors and interest on your bonds.
  4. Lastly, my father always said, “It is always darkest before the dawn”. I don’t believe we have seen the “darkest” part yet. For that we will have to see a panic sell in the markets, horrible economic numbers, doomsday articles in the financial press, smiling news casters, especially on the business news channels, and deteriorating economic numbers. Interestingly, the market is already anticipating that and is currently pretty deep into bear market territory. It may bounce up and down for a while before it has it’s final “sell off” or “bottom” and begins to go up. The problem is, no one knows when or if that will happen. It may even play out within one day. Meanwhile every time we bounce off the recent “bottoms” it tells me that there isn’t a large downside from here. Again, time will tell.

So, there you have it. We must be resilient and patient. Unlike earlier this year, I feel there is less uncertainty, and I can see beyond the clouds. We are just not out of the storm yet (timely Ian reference).

We have spoken to many of you but please call us anytime you feel uneasy. We’ll talk through what is and isn’t happening. What does and does not matter. We want you to worry less and enjoy life more!


Chris Reaney, CFP®

Founding Partner

Managing Director

Wealth Manager


Steward Partners Global Advisory

145 Maplewood Ave, Ste 100, Portsmouth, NH 03801

Direct: 603-427-8859 |Cell: 603-944-0873 | Fax: 603.373.8210

Email: chris.reaney@stewardpartners.com

Team Website: HighwaterGroup.stewardpartners.com 






The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates.  All opinions are subject to change without notice.  Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.  Past performance is no guarantee of future results.

Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.


The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. The index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The S&P 500 Index focuses on the large-cap segment of the market; however, since it includes a significant portion of the total value of the market, it also represents the market.

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  • Raymond James’ 2022 3rd Quarter Equity Market Update, dated Oct 3, 2022.
  • Raymond James’ 2022 3rd Quarter Equity Market Update, dated Oct 3, 2022, page 5-6