Unscrambling the Economy’s Mixed Messages

MIKE TOWNSEND: Take a look at the performance of some prominent market indexes in 2023, and it's hard to argue that it has been anything but a stellar year so far for investors. As of market close on September 11, the S&P 500^® is up more than 17%, the NASDAQ more than 30%. So why do investors feel skittish? Perhaps it's because not every index is enjoying those outsized gains. That old standby, the Dow Jones Industrial Average, is up less than 5%. The Russell 2000, a measure of small-cap stocks, is up about 6%. Nothing to sneeze at, but nothing too exciting either. Or maybe it's because the economic data just continues to be weird. The Fed has raised interest rates at 11 of its last 12 meetings, a sure sign that it doesn't feel like everything is running smoothly. Just over a year ago, inflation peaked at a 40-year high, and while it's been slowly coming down ever since, it still remains elevated. Unemployment, at the same time, has remained at or near its lowest point since the late 1960s. The combination of all these data points has left plenty of investors confused and wary of a market downturn, but is that concern warranted?

Welcome back to Washington Wise, a podcast for investors from Charles Schwab. I'm your host, Mike Townsend, and on this show, our goal is to cut through the noise and confusion of the nation's capital and help investors figure out what's really worth paying attention to.

In just a few minutes, I'm going to talk with Kevin Gordon, senior investment strategist at the Schwab Center for Financial Research, about how investors can make sense of this conflicting economic data, why some indexes have had such a strong year, what to watch for at next week's Fed meeting, and much more. But first, a few brief updates on what's making news right now here in Washington. 

After the traditional August recess, both chambers of Congress have returned to Washington and are now facing a frantic scramble to avert a government shutdown at midnight on September 30. Neither the House nor the Senate is anywhere near passing all 12 of the appropriations bills to fund government operations for the fiscal year that begins on October 1. The focus right now is on putting together a short-term extension of that funding until perhaps mid-November to avert a shutdown and buy lawmakers some additional time to figure out the longer-term spending details. The White House has asked Congress to attach roughly $40 billion in emergency spending to that temporary extension of funding, $24 billion in new aid for Ukraine and its ongoing war with Russia, and about $16 billion in domestic disaster aid, including the Hawaii wildfire and the recent hurricane in Florida. But the aid for Ukraine has become a flashpoint that could push the government into a shutdown. Republicans on Capitol Hill are increasingly divided about continuing to provide billions in aid to Ukraine. Prominent figures, like Senate Minority Leader Mitch McConnell, remain strong backers of Ukraine, but conservatives, particularly in the House, are questioning the amount of aid going to Ukraine, which they say increases the deficit and contradicts their efforts to reduce federal spending. Some have threatened to torpedo any short-term funding resolution that includes more dollars for Ukraine, and without that short-term resolution, the government would shut down on October 1.

It's not clear how the standoff over Ukraine will get resolved, but this is the key issue to watch over the next couple of weeks as the clock winds toward a potentially disruptive government shutdown. 

In other Capitol Hill News, the Senate last week confirmed all three nominees to the Federal Reserve Board of Governors. Current Governor Philip Jefferson was elevated to the vice chair slot by an overwhelming bipartisan vote of 88 to 10. Current Governor Lisa Cook, who had been filling out an unexpired term since May of last year, was confirmed to her own full 14-year term. And former World Bank economist Adriana Kugler was confirmed to fill the vacancy on the Fed board, becoming the first Hispanic person to serve as a Fed governor. The trio of confirmations means that the board now has a full slate of seven members, as the Fed confronts crucial monetary policy decisions this fall, as well as an aggressive regulatory proposal that would require large- and mid-sized banks to carry much larger capital reserves.

One final note on the Fed confirmations. Barring a resignation, there will not be an opening on the Fed until 2026. That means it will be more than a year into the next president's term before there would be an opportunity for a new Fed appointment.

Finally, an important update for everyone saving for retirement. Late last year, Congress passed the SECURE 2.0 Act, which made a host of changes to retirement savings. The most notable change this year was the increase in the age at which individuals have to begin taking required minimum distributions. That age went from 72 to 73 at the beginning of 2023. But the bulk of the provisions in that new law are set to go into effect in 2024. One that was causing some concern is a new requirement that employees who are age 50 and over and who earn more than $145,000 will be required to make their catch-up contributions to a Roth 401(k) that would be funded with after-tax dollars, meaning the tax is withheld when the contribution is made. Earlier this year, it became clear that the industry just wasn't going to be ready for this change. There are lots of companies that don't even have a Roth 401(k) option in their plan. And even among those that do, there are huge systems changes that need to happen. Companies need to be able to identify the employee's age, how much they're earning, and then properly direct their regular contributions to a traditional 401(k) and their catch-up contributions to the Roth 401(k). A loose coalition of employers, financial services companies, and retirement service providers sent a letter to the IRS earlier this year requesting a delay, and late last month, the IRS agreed. The agency issued a notice that delayed the requirement for two years until 2026. That gives companies more time to get their systems ready. So that's good news for financial planners and for people saving for retirement to have some clarity on that.

In that same notice, the IRS also clarified something else that people had been worried about. Due to a drafting error in the SECURE 2.0 Act, a few lines were inadvertently dropped, and the result was that it appeared that all catch-up contributions were going to be prohibited in 2024. The recent IRS notice clarified that that's not the case. Catch-up contributions can proceed as normal in 2024 and beyond. That provides confidence that if you're 50 or over, you can continue to take advantage of the opportunity to save more for your retirement, and for the next two years, the tax is deferred until you withdraw it. 

On my Deeper Dive today, I want to focus on what's going on in the markets and the economy, which have been sending investors a lot of mixed signals in recent weeks. I'm pleased to welcome back to the podcast Kevin Gordon, senior investment strategist with the Schwab Center for Financial Research. Kevin, great to have you back on WashingtonWise.

KEVIN GORDON: Thanks, Mike. Great to be back.

MIKE: Well, Kevin, as we look around to the economy right now, a lot of uncertainty. The S&P 500 is up 17% for the year, but consumer confidence has been slumping amid confusing signals from the jobs market. Inflation has come way down from its high of 9.1% in 2022 but remains sticky enough that the Fed is talking about one last rate hike this year. Consumer spending on services and travel skyrocketed in 2023, but retailers like Walmart, Target, Home Depot, Best Buy have noted that consumers are beginning to be more cautious with their spending. So it's no wonder that it's hard right now for investors to pin down what's going on with the markets.

You spend a lot of time sifting through a ton of data. Out of all that you're looking at, what should those of us who are just regular investors be paying attention to, and how much weight should we be giving to it?

KEVIN: Yeah, I've often said that investors should be taking really the same approach as the Fed, which is to be data-dependent. The only hard part about that right now is that there are times when you can get many conflicting messages from the data. So if you look at something just like non-farm payrolls, which is the number that grabs all of the attention in each month's Jobs Report, we've seen downward revisions in every month this year. As an example, when we got the August Jobs Report earlier this month, gains for July were revised down from 187,000 jobs to 157,000 jobs. So that was actually the seventh consecutive negative revision. And with our data that goes back to 1997, we've only seen one other period in which payroll revisions were negative for this many months in a row, and it was from 2008 into 2009. Naturally that triggers alarm bells for some investors, given the severity of the global financial crisis.

But I think it's important to keep in mind that today's environment is different than what we had more than a decade ago. And one of the main differences is the fact that response rates to survey data in this post-pandemic era have plunged. And I think it's a good time to remind investors things like the Jobs Report, they're survey-based.

If you look at the response rate to the survey before the pandemic, it was averaging around the low 60% range. So that was considered normal. And as you look at it today, the response rate has fallen to 41.6%, which is just slightly above the all-time low of 41% in late 2021. And even worse, the response rate for the Job Openings Survey, which is the one that the Fed has been most acutely focused on, that's fallen to 31.9%, which is down from its pre-pandemic average of 64%. On the one hand, things like the Jobs Report carry a lot of weight given the importance of signaling the strength in the labor market, yet on the other hand, the pandemic era has ushered in a sea change in the strength of surveys. So we shouldn't take it as a signal that they're not to be trusted, but really as a reason to take a step back when we first receive the data and not overreact to any single data point upon first release.

But as we know, sometimes the market behaves differently, and there's no doubt that stocks are still going to be influenced by data points as they roll through. For that reason, and despite what I just mentioned regarding response rates, I'd still give a lot of weight to the labor market. That's been the core driver of economic resilience this year. It's emboldened consumers to spend money on services that are still quite expensive. So if we start to see current cracks widen out more, it will be hard to ignore the fact that labor is slowing down at a faster pace.

MIKE: That's really fascinating about the lower response rate post-pandemic, and it will be interesting to see whether that ticks up in the months ahead.

Well, Kevin, one of the most confusing aspects this year has been the market itself, which even with a bit of a pullback in recent weeks just feels like it has performed much better than was expected in a lot of ways. Is that true?

KEVIN: Yeah, I'd say that's right. And as we came into this year, the call on the part of many strategists was that stocks would continue to struggle from the Fed's tightening cycle, which was expected to induce a recession earlier this year. Now, with the benefit of hindsight, we know that hasn't been the case, despite some major hiccups along the way. But as you noted earlier, the S&P 500 is up double-digits year-to-date, and the NASDAQ is up by more than 30% since the beginning of the year. One of the hiccups, though, I think that's worth pointing out, was the banking stress that we saw in March. And I think it's important because to me it marked a key turning point for the market because it ushered in this huge move into the larger names within indexes like the S&P 500 and the NASDAQ.

This flight to safety was at the expense of cyclical sectors like banks. And given the fact that the defensive areas of the market in this cycle have been the large-cap tech and tech-adjacent stocks, that's actually led to significant outperformance for stock indexes that are cap-weighted. And it's important to note that the outperformance still has been mostly driven by just the largest names, so we call them "the magnificent seven," in indexes like the S&P 500. And if you take out their contribution, the market's gain this year is only about 4 to 5%. So it's much less impressive than what the surface shows. And I will say the good news is that we started to see a little bit of a broadening out in June and July, when the rest of the market started to show signs of catching up.

But to your point about some of the inflation and economic data that we received, I think we've reached something of an exhaustive point by the end of July, and we've seen some choppiness recently since that market's latest peak at the end of July. And most of that, I think, can be attributed to the fact that earning season really wasn't as great as some people might think. We had an earnings beat rate that was high, and the percentage by which companies were beating their estimates, that was still pretty strong. But the real story to me was in revenue growth, which was essentially flat in the second quarter. And if you go one step further, and you look at real revenue growth, which is adjusted for inflation, that was negative for the third straight quarter. This combination of relatively better earnings growth and relatively weaker revenue growth means that companies, for the most part, achieved those stronger earnings via rather aggressive cost-cutting.

And that's not really a great sign, given it doesn't indicate that there's this sustainable uptrend in demand. And as of now, most of that pain has been concentrated in the goods part of the economy. For retailers, like you mentioned earlier, some of them are struggling with the fact that pricing power just isn't what it used to be. They can't just raise prices now and expect consumers to automatically pay up. Plus, many companies still have higher labor costs, given they've been reluctant to let go of labor.

So if we have revenue that continues to contract, it really only becomes a matter of time before the cost-cutting makes its way into job cuts. For now, of course, companies have been somewhat solving for that problem by cutting hours and wages, but that also tends to happen before you get to broader layoffs.

MIKE: Kevin, you noted a moment ago that you thought there was a turning point at the end of July, and, in fact, the S&P 500 closed at its peak for the year on July 31, at which time it was up a little more than 20% since the start of the year. So is the pullback since then part of this September effect, where things slow down every September, or is it part of something bigger?

KEVIN: Well, I think it's important to keep in mind that seasonality is not always an investor's friend. And I say that because, as you mentioned, there's a September effect at play, and we have data going back to 1928, and September is historically the weakest month for the S&P 500. And there are a lot of theories as to why that's the case, but one that I heard recently that makes some sense to me is that September tends to usher in what is thought of as this hurricane season for markets and economies.

If you go back in history, there have been severe events that have taken place in September that have caused significant volatility in markets. Lehman Brothers went bankrupt in September of 2008. The 9/11 attacks were in September of 2001. You had the twin crises of the Russian debt default and the collapse of Long-Term Capital Management in September of 1998. Of course, there's nothing to suggest that September always ushers in some kind of crisis. Maybe we could just chalk it up to weaker seasonality being, you know, investors' muscle memory.

But what I think is equally as important to consider is what seasonality tells us after September. So back to that historical data, it actually shows that stocks tend to find their footing in October and then rally in November and December. And, you know, no one knows where stocks are going in the short term, but I would just caution against that thinking of seasonal patterns saving the market at the end of this year, mostly because of where we are in the monetary policy and economic cycles.

And there have been years that have defied year-end seasonality by an incredible degree, most recently, 2018. And I always like to discuss this as a bit of a thought experiment just to show how seasonal trends don't always work well. And as you know, Mike, there was a great deal of stimulus injected into the economy in 2017 via tax cuts, both at the corporate and the individual levels. Conventional wisdom would probably tell you that that would be a positive setup for the economy and the market going into the next year, yet we found ourselves throughout 2018 mired in this trade war with China and some form of a manufacturing recession. And then on top of that, you had the Fed that was raising rates and tightening policy. That was eventually enough to tip the market almost into bear territory through Christmas. And, you know, while we're not facing similar manufacturing or trade dynamics today, we still have a Fed that's been much more aggressive and is battling an inflation problem that is also more aggressive than what we were facing in 2018.

That's not me saying that, you know, we're going to undergo this significant degree of pain through the end of the year, but I do want to encourage investors to look at some of these potential speed bumps ahead, because the Fed wants to keep rates more restrictive for a longer period of time, the labor market still has some visible cracks, and real revenue growth is still contracting, and then on top of that, consumers are starting to take a more cautious approach with their spending. Conversely, and on the upside, there are some pockets of the economy, like housing, consumer confidence, some manufacturing sentiment data that appear to be showing some hints at a recovery. But for now, the rub is that there are still areas that are keeping the recession antenna raised.

MIKE: Well, let's pick up on that notion of recessions. They have been historically a normal part of the economic cycle. You and Liz Ann have talked a lot over the last 12 to 18 months about rolling recessions, where different segments of the economy are in a recession, but the economy as a whole has not entered a full-fledged recession. Now it looks at least plausible that we will avoid an official recession, and that's something, of course, that seemed very unlikely when the bear market started. So is this so-called soft landing likely?

KEVIN: Yeah, you and I have discussed this before, Mike, but I think there is often too much hysteria around the word "recession," mostly because, as you mentioned, it's a natural part of the business cycle. So to be sure muscle memory doesn't work in our favor, given the two most recent recessions were the ones associated with the pandemic and the global financial crisis. But we've also had mild recessions before, and I often use the 2001 downturn as a clear example. If anything, most of the pain in that recession was felt in asset prices, since the stock market was mired in this multi-year secular bear market. But the overall hit to GDP was actually quite small, especially when you compare it to the 2007 to 2009 recession.

But if I'm getting to your question, you know, given the economy has suffered from these rolling recessions, the probability that the entire economy manages a soft landing is actually off the table. And that's because there have been pockets of the economy that have already undergone significant weakness.

I'd point to housing as the first domino that fell. Last year, you had home sales, home builder sentiment, and affordability metrics that all fell into deep recessionary territory. And that's to be understood because housing tends to be the most rate-sensitive part of the economy, so it's not too much of a surprise.

But another sensitive area on top of that has been the goods sector. The weakness there has been driven by two factors. The first one was the unwind of the pandemic-driven global supply chain stress. The second one was the shift from goods to services spending via the broader reopening of the global economy. So goods-oriented companies, they benefited a ton from the lockdown phase of the pandemic because we really couldn't go out and spend on any services. But once we started to reopen, and the labor market stayed intact, that spending power that held up the economy throughout the economy's shift right over to services, that kept growth elevated and inflation also sticky, as well. It dealt a lot of pain to goods-oriented companies, and they started to experience their own versions of recession. But at the same time, the offsetting strength was and has been on the services side.

When we assess the parts of the economy that haven't yet undergone the recessions, its services and labor. We think those are the next segments to weaken from here. And we've already started to see some signs of that. But the question now is whether that ends up being enough to tip the economy into a full-blown recession. Nobody knows the answer to that, not least because we've never really had this kind of rolling recession in history. It's probably the most unique that we've ever seen. In our view, the best-case scenario from here is that you continue to see this roll-through of the recession, where we start to see some more cracks in services and labor, but those are offset by an improvement in housing and goods. And on top of this, what makes it really difficult is inflation. It's almost a fantasy, in my opinion, to expect that inflation just miraculously drifts to the Fed's 2% goal as all of this unfolds. Could it happen? Sure. But I don't think it will be a smooth process, and it doesn't sound like the Fed thinks that either.

MIKE: Well, we'll get a better sense of what the Fed is thinking when they meet next week. There is broad consensus that they will hold interest rates steady, though Chair Jerome Powell indicated during his speech at Jackson Hole last month that one more rate hike later this fall remains an option on the table. So what will you be watching for next week? And what do you think the Fed is watching for in order to signal to the market that the rate hikes are finished?

KEVIN: Well, one thing I'm watching closely is tomorrow's CPI report. So as you and I are having this conversation, the consensus estimate is for headline CPI to increase by 0.5% month-over-month. That would actually be a pretty considerable step up from 0.2% in the prior month, and it would take the year-over-year pace up from 3.2% to 3.6%. Conversely, the good news is that core CPI, which takes out the volatile food and energy prices, is expected to increase by 0.2%, which is actually the same rate as the prior month. That would actually take the year-over-year pace for core CPI down from 4.7% to 4.3%.

Clearly, you can look at that dynamic and see that energy and this most recent rise in oil prices is likely playing a role in raising inflation in the near term. And given Chair Powell and the other FOMC members have mostly been focused on core services excluding housing, I'm not sure the current move higher in energy prices would be enough to change their view about holding rates steady in September.

Plus, you had the August Jobs Report, recently, give them probably enough cover for keeping rates steady in September, you had wage growth that didn't move higher, you had revisions to the prior month that were negative again, and then you had the unemployment rate moving up to 3.8%. And I'd add onto that in a win for the Fed, basically all of that increase in unemployment was driven by an increase in the labor force. It was driven by this increase in the number of individuals looking for work. If that continues, it should put downward pressure on wage growth.

And the Fed has done a pretty good job up until this point of hinting at what the next move is going to be. I don't think it's the goal on their part to signal a pause for September and then suddenly just surprise everybody. But that being said, if you move further into October and you see a firming up in inflation statistics, I think that could keep a rate hike in play for November. And that's actually what the market is pricing right now. Not necessarily this complete expectation that the Fed is going to hike, but that there's almost a 50-50 chance of hiking and keeping rates steady. And as we've continued to emphasize, the number of rate hikes left in this cycle probably doesn't matter as much as how high rates stay and for how long. Now that the inflation rate has peaked and some parts are still looking sticky, the Fed's actions become a lot more pointed and a lot more surgical, which is different from last year. They were much more blunt.

That means that we should be taking the Fed at its word when discussing restrictive rates. So if you see inflation continuing to recede, holding the fed funds rate steady will actually be restrictive because it means that real rates will continue to edge higher, and that's what the Fed is going for. It's why we encourage investors to pay more attention to what Fed officials are saying about keeping rates higher for longer. And for now, a rate hike, if we get one at all at the end of the year, shouldn't be the main concern.

MIKE: Yeah, you know, Kevin, when I think about the Fed's action, I'm always aware that there's this huge lag, sometimes I think it's as much as 18 months, between the Fed announcing a move on interest rates and that change really being felt in the economy. Where we are right now, of course, is that the Fed's first rate hike was in March of 2022, so we're exactly 18 months later, and in some ways, it feels like we're just starting to feel the effects of all those hikes. The Fed, of course, went on to raise rates 10 more times. So is there a chance that the Fed has overcorrected here?

KEVIN: Well, we won't know until we know. But to your point about lags, I think it's important to emphasize that we're still in the process of seeing what the impacts are. And there's been a lot of discussion lately around the fact that rates no longer have an impact on activity, and there's no way we could see labor weakness given it hasn't shown up yet. But that's really not true, because when you look back in history, it typically takes about two years for the unemployment rate to start moving higher after the initial rate hike. The pattern that you usually see is business revenue starts to contract about a year or 18 months after the first hike. So check, we've started to see that. And then that's followed by labor weakness. And as I mentioned, we've already started to see some cracks in the labor market. Perhaps some of this is happening right on queue.

But the looming question, which is what you asked, is whether the Fed has overdone it. And nobody knows the answer until well after the fact. But history really isn't on the side of the Fed when it comes to over tightening and over easing. But, you know, we're here now, rates are above 5%. So all we can do is see how it plays out. Plus, you have to keep in mind that this is a Fed that remains more concerned about inflation getting back out of the bag than a recession being caused.

I don't think the Fed has zero care about the economy or the labor market, but members, particularly Chair Powell, who has notably invoked the late Fed Chair Paul Volcker, have made it clear that they'll do whatever it takes to get inflation down to their 2% target. I think we can all agree that ingrained inflation is detrimental to the economy, but this decades' long debate has been whether inflation should or can be vanquished via more pain in the economy. I don't see that controversy going away anytime soon, especially because the labor market is still really tight today.

MIKE: Well, we'll all be watching next week to see what the latest language coming out of the Fed is.

I wanted to shift gears to another question that is looming in Washington right now, and that seems to be the increasing likelihood that there will be a government shutdown this fall, perhaps at the end of this month, perhaps later in the fall. Do markets care about government shutdowns? Should investors care?

KEVIN: Well, I think we should always care about shutdowns, but whether the market does is kind of an open question. And our colleague Randy Frederick has gathered data on this and shows that for the past five government shutdowns, the S&P 500 actually moved higher the entire time. So take away from that what you will. But if you go beyond the past five shutdowns and extend that analysis back to the 1970s, the average move for the S&P 500 has been down by just 0.1%. So if you're purely looking at that average, you can likely infer that the market doesn't care too much.

But at the same time, we shouldn't ignore the fact that from an economic perspective, longer shutdowns carry a bit more risk because of the potential stalling out of federal programs, and then also the potential hit to the federal workforce either via furloughs or no paychecks.

And I'm always much more interested in what's going on in the economy that could be driving the market at any given time. So if you take as an example, the shutdown that we had from late 2018 into early 2019, at that point we were launching off of the near bear market low in 2018 for the S&P 500. There was some powerful momentum at play as we were experiencing that reflexive move off the trough. It would have been hard at that time to reverse that.

Conversely, for the shutdowns throughout the 1970s, I don't think it's a surprise that we saw weaker reactions from the S&P 500 in that period because we were mired in the secular bear market and dealing with a severe stagflation problem.

It's hard enough trying to make economic and market forecasts. It's impossible to do that for government matters, which to me just reinforces the fact that investors should be looking at this bigger picture and not trying to game out scenarios for government shutdowns.

MIKE: Well, Kevin, you've given us a great tour through a lot of confusing numbers that I think are keeping investors on edge. Given all these uncertainties, what do you suggest investors should be doing right now?

KEVIN: Within the stock market, our view on screening for quality hasn't really changed. And, if anything, it's been strengthened by the fact that revenue growth is now under pressure, so I would add that to the mix. Now you want to be looking for companies that are maintaining strong profit margins and sales growth. And if earnings strength is coming simply just from cost cuts and cutting the number of employees aggressively, that isn't the best sign.

The good news about this factor- and characteristic-based approach is that you can apply it to any sector. So it kind of keeps you out of this trap of feeling like you need to jump between sectors and try to catch which ones are going to outperform, which is really hard to do in this environment.

And if we zoom out from the stock market, I actually think investors should continue to look at other asset classes and take advantage of diversifying, especially now that rates have risen so much. One of the benefits of a rising-rate environment is that bonds are starting to look increasingly attractive again, and not only are yields up considerably across the curve, but their rise is starting to give stocks a bit of a run for their money. Just as an example, if you look at the earnings yield for the S&P 500, which is just the inverse of the price-to-earnings ratio, and you compare that to what you earn in the bond market, depending on which kind of bond you're looking at, the spread is hovering near a two-decade low. That's another way of saying that bonds are on a bit of a more level playing field relative to equities these days from a valuation perspective, which investors haven't been able to say for quite a while. To the extent it makes sense to you as the investor and what your goals are for income and risk, I think exploring the bond market makes a lot of sense here.

MIKE: The equity guy, he's suggesting going for the bond market. I thought I'd never see the day.

Always great advice, Kevin. I enjoy talking to you, and you do a great job at explaining a lot of confusing and difficult information and breaking it down in a really manageable way. Thanks so much for taking the time to join me today.

KEVIN: Thanks, Mike. Always a pleasure.

MIKE: That's Kevin Gordon, senior investment strategist here at Charles Schwab. You can follow his commentary at schwab.com/learn.

Well, that's all for this week's episode of WashingtonWise. We'll be back with a new episode in two weeks. Take a moment now to follow the show in your listening app so you don't miss an episode. And if you like what you've heard, leave us a rating or a review. Those really help new listeners discover the show. For important disclosures, see the show notes or schwab.com/washingtonwise, where you can also find a transcript.

I'm Mike Townsend, and this has been WashingtonWise, a podcast for investors. Wherever you are, stay safe, stay healthy, and keep investing wisely.