Now that the debt ceiling debate appears to have been resolved, we could see more risk-taking among investors. That’s a good thing for smaller stocks, like the ones we buy for our portfolio. Below I take a closer look at what’s going on this week in the S&P 500 (SPY) and how this impacts our next move. Read on for more….
(Please enjoy this updated version of my weekly commentary originally published June 1st in the POWR Stocks Under $10 newsletter).
The debt ceiling deal has passed the House and looks set to pass the Senate. That’s been marginally good for stocks, with the S&P 500 (SPY) up about 3% over the last week.
There are still plenty of concerns for the economy, but it looks like the debt ceiling won’t be one of them.
It’s not really a surprise that the US avoided a default (the consequences of which could have been catastrophic).
The real surprise is that it didn’t come down to the very last minute for Washington to get a deal done. Attention will now shift back to the Fed and the fight against inflation.
You can see in the chart above, the SPX (S&P 500 index) is near the top of its two standard deviation range.
That doesn’t necessarily imply it’s going to pull back, but mean reversion is a real thing with stocks, so there could be some selling pressure in the near future – albeit short-lived, most likely.
With the debt ceiling issues mostly out of the way, the jobs report tomorrow will be front and center for many investors.
The job market remains strong, which is both good and bad. It’s good because people have jobs (obviously). It’s bad because it makes it more likely that the Fed will continue raising rates to fight inflation.
The Fed doesn’t appear to be in a rush to raise rates at this stage, though. There’s currently an 80% chance of a rate hike pause at the June FOMC meeting (according to the futures market).
However, there’s over a 50% chance the Fed hikes rate at the July meeting.
The Fed is attempting to achieve a soft landing. That is, they want to combat inflation (sending it lower) without torpedoing the economy.
I’m not sure it’s possible, although it has been achieved in the past. We’ll have to wait and see if they can capture that magic this time around.
Volatility, as seen in the VIX chart below, wavered during heading into the final days of the debt ceiling debate.
However, you can see where the VIX is now approaching 15. Below 15 is generally considered a low volatility regime for the market.
It’s not unusual for market volatility to soften as we move into the summer vacation months.
However, it’s a bit different this year with at least one interest rate hike expected over the summer period.
Despite the Fed doing a reasonable job of telegraphing their moves, further rate hikes could introduce a measure of volatility into stocks in the coming weeks.
Ultimately though, we may be approaching a period where investors are willing to take more risks on stocks.
Lower volatility typically means investors will take more chances on small stocks and value names. That certainly implies good things for us, which is the area we tend to operate in.
What To Do Next?
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All the Best!
Jay Soloff
Chief Growth Strategist, StockNews
Editor, POWR Stocks Under $10 Newsletter
SPY shares closed at $427.92 on Friday, up $6.10 (+1.45%). Year-to-date, SPY has gained 12.32%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Jay Soloff
Jay is the lead Options Portfolio Manager at Investors Alley. He is the editor of Options Floor Trader PRO, an investment advisory bringing you professional options trading strategies. Jay was formerly a professional options market maker on the floor of the CBOE and has been trading options for over two decades.
The post Moving on From the Debt Ceiling… appeared first on StockNews.com
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- Holmes County has more to offer tourists than buggies.
- Marketing strategies shared with members include AI mapping.
- Chamber helps recruit visitors, but it’s the job of area businesses to entertain them.
WALNUT CREEK TWP. − Holmes County is a tourism destination recognized for being in the heart of Ohio’s Amish Country. The Holmes County Chamber of Commerce and Tourism Bureau wants visitors to know there is more to the area than buggies. Think Buggies and Beyond as a tagline, suggests Tourism marketing manager Shannon Carter.
The Holmes County Chamber of Commerce and Tourism Bureau (HCCOCTB) kicked off the 2023 tourism season with a breakfast for around 70 members of the chamber to share thoughts and ideas about what is new for this summer season as the tourism traffic heats up in and around Holmes County.
Gerber spoke about some of the partnerships the HCCOCTB has leveraged to take Holmes County’s brand beyond what it has been in the past.
“I have a very specific philosophy in that everyone has their own responsibility when it comes to tourism marketing,” she said. “It starts at the state, and it’s Shannon and my job to get them into the region, and it’s every single one of your job to get them through your door.”
She noted any lodging, dining or shopping establishment is eligible to use the state’s free tourism industry database. A free listing can be created at Ohio.Org/industry. Business owners also can subscribe to BuckeyeLine, the monthly industry e-newsletter.
Buggies and beyond
Carter pointed out that through the state, Holmes County is a designated trail as Amish Country, so if businesses are listed on the state’s site, they will get more traction for events because it is one of the top targets for tourism in the state.
She also noted because Ohio’s Amish Country is close to Amish communities in Shipshewanna, Indiana, as well as Lancaster, Pennsylvania, Holmes County has expanded its brand to Buggies and Beyond, and More than Buggies to attract people who have been to Amish Country elsewhere.
“So, really, we’re more than buggies,” she said. “You can come here for all the usual experiences, but, you can also go to Hummingbird Hill Flower Park and pick flowers, or go to Millersburg and have a glass of wine. We’re trying to incorporate it all.”
A moving billboard with multi-purposes
Doug Burgess has been a member of the tourism council for many years, and he reported how for years whenever they would go to a convention or trade show, they would rent a trailer and load it up, go the show, unload at the show, load it back up to return home and then unload it again.
The Chamber purchased a trailer that no longer has to be loaded and unloaded. \
“It’s a multi-purpose trailer,” he said. “We can have brochures and such in it, and when we take it to a fair, people can walk into the trailer and back out. It has a rubber floor, and has an awning on the side to open as a window to hand out brochures and information. It also serves as a moving billboard.”
The trailer is on display in the parking lot at Dutchcraft Cupboards in Berlin. He noted it was money well spent by the chamber.
Other marketing strategies
Other marketing strategies being implemented include Wander Maps, interactive maps to be placed at hotels, inns and other overnight locations, providing a bar code that offers destinations and directions around Holmes County.
The chamber has joined Place your AI, which tracks cell phone apps,and helps figure out where visitors are coming from, where they stopped along the way and is useful in developing marketing strategies geared at specific target markets.
The chamber is supporting the efforts of author Brandy Gleason and her book “100 Things to do in Ohio’s Amish Country Before You Die,'” as well as Sir Yacht, who is coming to Holmes County to promote hidden gems of Amish Country.
Travel and leisure shows like the Food Independence Summit coming up in Walnut Creek on June 21-22 and the 100th edition of the Holmes County Fair in August were discussed as events where the HCCOCTB will be on display.
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Mattress Firm, one of the nation’s largest mattress retailers, is moving its headquarters to the Westchase area of Houston, becoming the latest area company to shrink its office footprint since hybrid work changed how companies approach their office real estate.
The Houston-based bedding purveyor plans to move its headquarters to a 55,855-square-foot office to 3250 Briarpark, just east of Beltway 8, according to Transwestern Real Estate Services, which manages the building, called Reserve at Westchase.
FUTURE OFFICE DESIGN: 6-story mass timber office planned near Memorial City
Mattress Firm confirmed that it expects to relocate its so-called “Bedquarters” this fall, vacating a roughly 135,000-square-foot office at 10201 South Main Street south of NRG Stadium. The 23-acre site was put on the market this year, according to marketing materials by the real estate firm JLL. Attempts were unsuccessful to reach the brokers for comment on the site, owned by PR Investments, according to Harris County records.
Mattress Firm’s lease at that south Houston site was expected to expire in September, prompting the retailer to search for “a new location that would better align with the needs of our employees in today’s environment,” said Katie Clark, a Mattress Firm spokesperson.
A rendering of a conference center planned in Mattress Firm’s new headquarters at the Reserve at Westchase in west Houston.
Transwestern Real Estate ServicesMattress Firm has a few hundred employees in the Houston area, and many corporate employees spend time working at home. Some employees work entirely remotely, while others commute to the office regularly, a spokesperson said.
“We have embraced a hybrid working environment, giving our corporate associates the flexibility to work wherever they are most comfortable and productive. What we’ve seen over the last year is that many associates are continuing to work remotely, and thus the need for a space of our current size is no longer necessary,” Clark said.
EARLIER: Mattress Firm withdraws bid to go public
The lease represents a roughly 60 percent reduction of the company’s office space. Other Houston companies, including Invesco, Baker Hughes, Apache and Bechtel, have reduced their office space in recent years as they’ve embraced hybrid work.
The Mattress Firm lease was listed among the biggest publicly known office leases signed in the first quarter, including lease renewals, according to research from CBRE and JLL.
“This deal further cements West Houston/Westchase as an ideal location for companies looking to make long-term real estate commitments,” Jack Scharnberg, a broker with Transwestern, said in a statement, noting Apache and Bechtel’s recent moves to the area. “Due to the quality of the project and competitive economics, Mattress Firm was able to secure a long-term deal at a great value.”
Mattress Firm could also count on relatively more affordable rental rates in Westchase, where office rents were averaging almost $25.75 per square foot in the first quarter this year. The average asking rent in the Energy Corridor is just more than $30 a square foot; about $42 downtown, and almost $35 in the Galleria, according to CBRE. Office vacancies in the Westchase area also are hovering just under 30 percent, higher than the region’s average of 23.6 percent, according to CBRE.
CRE OUTLOOK: Why this Houston real estate chief isn’t too concerned about a recession
CBRE declined to comment on the Mattress Firm deal, although the brokerage’s Jon Lee and Brett Blanchard represented Mattress Firm in the transaction, according to Transwestern. The landlord was represented by Transwestern’s Scharnberg, along with Kristen Baker and David Baker, who have both since left Transwestern for real estate brokerage Newmark.
Mattress Firm has nearly 2,300 stores with more than 6,000 so-called sleep experts nationally. The company scrapped plans for an initial public offering amid rumors that it could be acquired by Tempur Sealy, industry trade publication Furniture Today reported. Clark, the Mattress Firm spokesperson, said the company doesn’t comment on rumors or speculation.
marissa.luck@chron.com
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