Clearview Portfolio Consulting March Market Recap

Key Points:

  • Concerns in the banking industry developed in March after the collapse of Silicon Valley and Signature Banks.
  • The stock market was resilient, with the S&P500 gaining 3.67% despite Fed hiking interest rates an additional 25 basis points.
  • High quality bonds gained during the month as yields fell.  Lower rated debt lagged as credit spreads widened on the prospect of worsening financial conditions.

After a dramatic rise in Treasury yields over the past 12 months from the Fed trying to rein in inflation, the banking sector was rattled with the failures of Silicon Valley and Signature Banks.  These collapses appear to be contained and do not seem to be part of a larger systemic issue in the financial system.  The Federal reserve stepped in to provide liquidity to all banks in an effort to calm depositors.  However, financial conditions are sure to tighten as liquidity becomes top priority to ensure that depositors are confident in the solvency of their banks.  Higher lending standards should raise borrowing costs for smaller and unprofitable companies.  This may help the Fed’s cause in reducing inflation from slower demand, but it also increases the likelihood, and perhaps magnitude, of an economic recession in the next few quarters.  Banking sector issues could cause businesses in all industries to pause hiring and business investment.  

Stocks were mixed during March as the selloff in financials (-9.6%) was offset by the run-up in technology (+10.9%) and telecom (+10.4%) stocks.  Utilities (+4.92%) and consumer staples (+4.23%) also gained as investors favored defensive equities.  Small cap stocks, which have a higher percentage of regional banks than large caps, fell 4.8% as measured by the Russell 2000.  The S&P 500 gained 3.67%, while the NASDAQ Composite was up 9.5%, benefitting from lower financials weight and declining Treasury yields.  Both international developed and emerging market stocks moved higher during March, despite additional banking issues abroad.  UBS bought Credit Suisse to avoid continued stress and uncertainty to the global financial system.  

Treasury yields fell in March as investors sought the safety in high quality bonds.  This drop in yields should help bank’s asset-liability mismatch, but the yield curve is still inverted which makes lending difficult.  While yields fell, the Fed raised their benchmark Fed Funds rate an additional 25 basis points, displaying their confidence in the system.  Overall, bonds traded higher in March with the Bloomberg US Aggregate Bond Index up 2.54%.  High yield bonds (lower credit quality) lagged the investment grade markets as credit spreads widened to reflect the additional risk.  Moving forward the Fed will likely be more data dependent in their decisions to raise interest rates further to bring down inflation, but the recent banking issues may slow the economy more than previously forecasted.

Sources: Morningstar Direct, Wall Street Journal, JPMorgan

Clearview Portfolio Consulting February Market Recap

Key Points:

  • Higher than expected inflation data for January disappointed investors causing yields to rise.
  • Stocks dropped in February after surging in January.  The S&P500 lost 2.44% in February but is up 3.69% for the year.
  • High quality bonds sold off during the month with rising Treasury yields hurting existing bond prices.  

After a strong January in the markets investors hope for lower inflation (and less rate hikes) dwindled as inflation slowed less than expected.  Higher inflation raises the odds of recession as the Fed’s tightening cycle may be higher for longer.  Inflation should eventually come down but according to Invesco’s Global Market Strategist Brian Levitt, “ takes roughly 12-18 months for tighter policy to be felt in the economy – and one year ago the Fed Funds Rate was 0.00%.” The economy appears relatively strong with consumers still spending and unemployment at just 3.4%, the lowest in 54 years.  The layoffs in big tech have been offset by strong employment gains in leisure and hospitality industries. Volatility will likely remain elevated for the next few quarters as investors monitor the economy and the likelihood of a recession.  The stock market is evaluating if it was accurately priced into last year’s market selloff.

The S&P 500 dropped 2.44% in February.  The tech-heavy NASDAQ Composite held up the best losing just 1.01% while the Dow Jones Industrial Average fell -3.94%.  Technology (+0.45%) was the only positive sector of the market while small caps performed better than large caps.  Growth outperformed value during the month as energy stocks were hit the hardest (-7.12%): weaker economies usually require less energy.  Developed international stocks dropped 2.09% while emerging markets fell 6.48%.  The tensions with China (balloons, Russian relations, etc.) saw the MSCI China index fall 10.37%.  The European equity markets were relatively flat as they enjoy dramatically lower natural gas prices amid a mild winter. 

Bonds sold off in February as yields moved higher.  The entire Treasury yield curve shifted up with inflation not falling at the pace that investors had hoped for.  As a result of the move in yields, the Barclays Aggregate Bond Index dropped 2.59%.  Inflation seems to have stabilized but remains far away from the Fed’s 2% target as personal spending remains strong.  This may be temporary as consumers spend down the last of their pandemic savings, but the Fed is intent on slowing the economy to stabilize prices.  The strong labor market has afforded them to be aggressive in raising interest rates.  If they can thread the needle and slow the economy just enough to avoid a recession, risk assets should rise in the coming quarters. 

Sources: Morningstar Direct, Wall Street Journal, First Trust, Merrill Lynch

Clearview Portfolio Consulting January Market Recap

Key Points:

  • January was a “risk-on” month with both stocks and bonds starting 2023 strong.
  • The US economy is expected to slow in 2023 as large corporations have begun to lay off their excess labor supply.
  • International markets saw a strong month with the expectation of increased consumer spending as China comes out of lockdowns.

After a tumultuous 2022 where stocks and bonds lost double digits, 2023 opened with a bang in risk assets. On the hopes that the Federal Reserve will soon be done raising interest rates as inflation data is cooling, investors moved into risk assets in a big way.  The S&P500 gained 6.28% while the tech-heavy NASDAQ soared 10.67%.  The worst sectors of the 2022 market saw the biggest gains.  The communications services sector (+14.5%), which includes companies like Google, Facebook, and Disney was the worst sector of the S&P500 as it lost 39.9% last year.  Consumer discretionary stocks (Amazon, Tesla, Home Depot etc.) were the best performers of the month, snapping back from a 37% loss in 2022 to a 15% gain in January.  The market seems to be betting that inflation is under control and the looming economic recession may be mild or avoided.

Bond yields fell in January as investors prepare for the next several Federal Reserve meetings. The decrease in bond yields pushed the Bloomberg Barclays Aggregate Bond Index to return 3.08% during the month after falling 13% last year. Company layoffs have become a common headline as corporations prepare for a slowdown.  Leaner companies are a biproduct of the difficult periods of an economic cycle.  Higher unemployment rates typically accompany recessions, so the layoffs were not unexpected.  Cheap debt allowed corporations to spend in many areas as opposed to their best ideas. 

International markets gained around 8% during the month.  Mexican stocks were the best performer, up 17% on increased tourism.  As the Chinese economy begins to re-open, Merrill Lynch expects “revenge spending” where couped up citizens spend heavily on durable goods, travel and leisure. The ongoing conflict in the Ukraine should keep energy markets concerned, but the recent drop in energy prices has been a boost for consumers and businesses across the globe.

2023 will most likely be another volatile year in the stock market as the economy and spending slow.  Whether we end up in a recession is still up for debate, but the hope is that any correction is short-lived.  It is unclear if we have reached the bottom of the stock market just yet (stocks tend to turn around before the economy does).  Bonds could do well this year if the Fed gets inflation under control without further significant interest rate hikes and a deep recession is avoided.  Long-term investors should continue to focus on portfolio diversification.

Sources: Morningstar Direct, Wall Street Journal, First Trust, Merrill Lynch

Clearview Portfolio Consulting Year End Market Recap

Key Points:

  • 2022 was a challenging year for investors as stocks and bonds fell in value.
  • The US economy is slowing from rising yields as the Federal Reserve continues to target high inflation.
  • Bond yields are the highest we have seen in years and if inflation gets under control, 2023 could be a more normal year for fixed income.

Investors didn’t have a whole lot to feel cheery about in 2022.  A war between the Ukraine and Russia scrambled energy markets, inflation hit a forty year high, and interest rates soared.  The delicate US economy wobbled during the year, as repercussions from supply chain disruptions continued to reverberate.  Both stocks and bonds had one of their worst years in decades after years of easy money abruptly ended as the Federal Reserve aggressively targeted rising prices. 

Among the major US indexes, the Dow Jones Industrial Average was the best performer with a 6.86% loss for the year. High quality companies with consistent earnings outperformed speculative growth stocks.  The S&P500 dropped 18.11% while the tech-heavy NASDAQ lost 32.54% after accounting for dividends.  Energy stocks were the darlings of 2022 gaining over 65% while most of the other major sectors fell.  Value stocks fared better than their growth counterparts, after several years of underperformance.  International stocks saw gains towards the end of the year as the strong dollar began to reverse course against most major currencies.  The Bloomberg US Aggregate Bond Index saw its worst year since it’s 1976 inception as it lost 13.01% amid rising yields.  Inflation has started to slow moving into 2023.  If it continues to drop, we could see a more normal year for the investment grade bond market.  Current yields are the most attractive we have seen in years.

Many economists expect the US to enter a recession this year as inflation and higher interest rates dampen economic activity.  However, the labor market is still tight, with unemployment at 3.7%.    Past recessions have seen much higher levels of unemployment, suggesting this recession may be mild and short lived.  A resolution to the conflict in Ukraine and a reduction in wage inflation could cause the US economy to avoid a recession but growth in the next several quarters will likely be below trend levels.  While the equity market may continue to be choppy heading into the new year, it is important to remember that stocks are a leading economic indicator and tend to bottom well before the economy starts to rebound.  Trying to time the market is a risky endeavor and best suited for short-term traders.  Long-term investors tend to be rewarded with patience and well-diversified portfolios.  Happy New Year!

Sources: Morningstar Direct, Wall Street Journal, JPMorgan, Morgan Stanley

Clearview Portfolio Consulting November Market Recap

Key Points:

  • The Federal Reserve signaled that the pace of rate hikes may slow down in December, suggesting that inflation in the US may have peaked.
  • Stocks and bonds rallied in November on the notion of smaller rate hikes, but the inflation fight will continue into 2023.
  • International stocks had their best month in two years with both developed and emerging markets gaining double digits on a weaker US Dollar.

The Federal Reserve has signaled that it plans to raise interest rates an additional 50 basis points in December, after four consecutive 75 basis point rate hikes.  This suggests that they believe that inflation may have peaked and led to a risk-taking stance in November.  Stocks and bonds rallied on the news with the S&P500 gaining 5.59% for the month.  The investment grade bond market, which has suffered one of worst years in a generation, rallied on the Fed’s comments.  The Bloomberg US Aggregate Bond Index gained 3.68% for its best month of 2022.  Attractive yields and lower inflation expectations drew investor interest back into bonds, but a strong labor market may cause inflation to remain higher than the Fed’s 2% target into 2023 and perhaps beyond.

All sectors of the US stock market were higher in November.  Materials (+11.76%) stocks were the biggest gainers followed by industrials (+7.85%) and financials (+7.04%).  Consumer discretionary (+0.99) was the worst performing sector of the market as investors consider how deep and long a global recession next year might be.  US stocks seem to be getting thicker skin as they absorbed a billion-dollar crypto exchange that went bankrupt in a matter of days and civil unrest in China over strict COVID lockdowns.  Small cap stocks underperformed large caps and value stocks continued to dominate growth for the year.  As we head into the final month of 2022, the Dow Jones Industrial Average is down just 2.89%, the S&P500 index down 13.1%, while the tech-heavy NASDAQ has fallen 26.13%.

International stocks had their best monthly return since 2020 with the developed market MSCI EAFE Index gaining 11.26%.  Emerging markets (MSCI EM index) soared 14.83% after a very challenging year.  The US Dollar weakened against foreign currencies, boosting US investor returns in stocks abroad.  Asian stocks rallied on the hopes that China may soon relax its zero-COVID policy which has been hindering economic growth.  European stocks also rallied after an uncertain year of energy supplies. Lower global energy prices combined with declining yields in US bonds seemed to be a main contributor to the weaking US Dollar Index.

Sources: Morningstar Direct, Wall Street Journal, First Trust, Merrill Lynch

Clearview Portfolio Consulting October Market Recap

Key Points:

  • The Federal Reserve is expected to raise the Fed Funds rate an additional 75 basis points in November to contain high prices.
  • Stocks rallied strong in October with the Dow having its highest monthly return in decades.
  • Higher yields in bonds have caused bond prices to fall but investors are finally getting attractive yields in short-term assets.

The Federal Reserve is primed to raise its benchmark rate another 75 basis points this week in their conquest to slow down economic activity and bring down inflation.  This will be the fourth consecutive increase of that size as inflation remains stubbornly high.  Despite higher rates, the US economy advanced 2.6% in the third quarter after two quarters of economic detraction.  The main components driving growth were increases in exports (mostly energy) and consumer spending.  Higher interest rates are being felt in the housing market as sales of new homes fell 10.9% in September as surging mortgage rates are giving would-be buyers pause.  US mortgage rates topped 7% for the first time since 2002 and will likely cause prices of existing homes to fall.  This drop in prices will take time to show up in inflation calculations making the Fed’s job more challenging.

Stocks rallied in October on the hopes that the Fed may be closer to slowing rate increases.  The Dow Jones Industrial Average posted its best month in decades, gaining 14.07%. The more diversified S&P 500 advanced 8.1% while the tech-heavy NASDAQ gained just 3.94%.  Value stocks were the best performers during the month with strong gains in energy (+24.96%), industrials (+13.92%) and financials (+11.99%).  Earnings (which ultimately drive stock prices) have come in rather strong this quarter.  Through the end of October nearly 71% of the 263 companies that have released third quarter results have beaten their expectations according to Guggenheim Investments.  Small cap stocks had a solid month with the Russell 2000 gaining 11.01%.  International stocks were mostly flat for October as high inflation in Europe and a selloff in Chinese equities had global investors seeking solace in US dollar assets.

Higher interest rates continue to weigh on the bond market with the Bloomberg Aggregate bond index falling 1.3% in October.  Two-year Treasury yields topped 4.6% during the month after yielding below 0.5% just a year ago.  While this has been one of the most challenging environments to be a bond investor, it has been years since yields have looked this attractive.  Strong corporate balance sheets should provide stability to high quality bond investors if we experience a recession over the next year. High yield bonds held up well during the month (+2.68%) but it may be a bit early in the economic cycle to take on excessive risk in the bond market. In the meantime, investors are finally earning something on short-term bond investments.

Sources: Morningstar Direct, JPMorgan, First Trust, Wall Street Journal

Clearview Portfolio Consulting September Market Recap

Key Points:

  • The Fed’s aggressive stance to combat inflation is causing pain in the stock and bond markets as higher rates pushed risk asset prices down.
  • Stocks and bonds experienced their worst month of the year with the probability of a recession increasing as the Fed continues to pull liquidity from the system.
  • Current yields and valuation levels in stocks and bonds look much more attractive than we have seen in the past few years.

After mischaracterizing inflation as “transitory” last year, the Federal Reserve has been playing catchup in an effort to reign in rising prices this year.  The extremely aggressive rate hikes by the Fed to slow down economic activity and ultimately prices has caused pain in the financial markets.  Tighter financial conditions increase the probability and depth of a recession.  The Fed raised the Fed Funds rate an additional 75bps (0.75%) in September, after raising it 75bps in both June and July meetings. Chairman Powell vowed to “keep at it until the job is done”, suggesting more rate hikes this year.  Higher rates from the Fed make their way into the rest of the economy in the form of higher mortgage rates, auto loans and overall borrowing.  Eventually the prices of goods will come down but the latest CPI reading of 8.3% in August for the year-over year increase in prices is a far cry from the Fed’s 2% target.

Stocks and bonds experienced their worst month of the year with the S&P500 dropping 9.21% while the Bloomberg US Aggregate Bond Index fell 4.32%.  All sectors of the stock market were down sharply with only 27 stocks in the S&P500 having a positive return in September.  Interest rates moved higher with the 2-Year Treasury yield climbing above 4.3% after yielding less than 0.3% just a year ago.  The rise in yields is bad for existing bonds as their prices adjust (fall) so that their yield reflects prevailing rates.  However, their prices will converge back to par assuming there is not a default.  Slowing economic activity from higher rates may increase the probability of a default as it could make interest and principal payments harder for borrowers. 

The silver lining from higher rates is higher yields in bonds and lower valuations in stocks.  Investors are finally earning a return on their cash and relatively attractive yields on their bonds.  With stocks down over 20% both in the US and abroad for the year, the high valuations that we experienced in the past few years is no longer an impediment to put money to work.  It should also keep long-term investors focusing on the long-term.  The Fed will eventually stop raising rates as it isn’t hard to predict what 7% mortgage rates will do to house prices and all the industries associated with new home construction.  Clearly the Fed was too late to the game to pull the punch bowl away and the markets will remain volatile until we get inflation under control.  The Fed does has some ammunition to cut rates in the event that we do see a sustained recession from tighter financial conditions.  The bond market is already pricing that in with an inversion in the yield curve: higher yields on short-term bonds than longer maturities. Sticking to long-term plans is difficult in times like these but trying to time the market with any level of consistently is most certainly harder.

Sources: Morningstar Direct, Wall Street Journal, State Street, St. Louis Fed database

Clearview Portfolio Consulting July Market Update

Key Points:

  • Stocks had their best month of the year despite the Fed aggressively raising rates to tackle inflation.
  • The US entered a technical recession after GDP declined for the second consecutive quarter in Q2.
  • Bonds also had their best month of 2022 with long-term rates declining as investors hedged a potential slowdown in the US economy.

Sometimes good economic news is bad and bad economic news is good for financial markets.  US stocks rallied in July with the S&P500 gaining 9.22% despite the Federal Reserve raising interest rates to combat inflation.  With inflation reaching a 40-year high of 9.1%, the Fed raised the Fed Funds Rate 75 basis points for the second straight meeting, bringing its range to 2.25%-2.5%.  The US economy entered a technical recession a few days later, defined as two consecutive quarters of negative GDP growth.    Second quarter GDP contracted by 0.9%, after a first quarter drop of 1.6%.  Conventional wisdom might suggest that stocks should go down on bad economic news.  However, it is important to remember that stocks are forward-looking.  April and June saw big market drawdowns of over 8% per month where investors seemed to have priced in these outcomes. While the US economy is most certainly slowing and has challenges ahead, the Fed has confidence that it can handle higher rates.  The labor market continues to be strong adding 372,000 jobs in June, keeping the unemployment rate at 3.6%.  Average hourly earnings have also been robust as there are more job openings than job seekers. Higher rates will likely cause that gap to narrow in quarters to come.

All sectors of the US stock market were positive for the month.  The best performing sectors were those that had been hit hard for the first half of the year: consumer discretionary (+18.94%) and technology (13.54%).  Energy (+9.72%) came back into favor as a heat wave in the US sent natural gas prices swiftly higher.  Small cap stocks rallied over 10% in July, while international returns were more muted.  Concerns over energy supplies in Europe heading into the winter are causing economists to adjust growth estimates lower.  The MSCI EAFE Index gained 4.98% for the month while emerging market equities were flat.  The strong US dollar continues to weigh on international returns for US investors.

Fixed income markets saw the best month of the year for the Bloomberg US Aggregate Bond Index, moving 2.44% higher in July.  Intermediate and long-term Treasury yields dipped as investors hedged for a recession, following the Fed’s hawkish policy of higher rates and balance sheet reduction.  While inflation may be close to peaking as gasoline and other commodity prices have fallen, the Fed is a long way from its 2% target. Additional rate hikes seem probable and may continue to slow economic activity.  Looking ahead to the rest of the year, earnings uncertainty from higher borrowing costs and the slowing US economy may continue to cause volatility in stocks and risk assets.  However, staying invested through tougher economic periods paid off for long-term investors in July.

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC and Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Allied Financial Advisors, LLC and Cambridge are not affiliated.  This communication is strictly intended for individuals residing in the states of AZ, CA, CO, CT, DE, FL, GA, IA, IL, IN, KS, MA, MD, MI, MO, MT, NC, NH, NJ, NY, PA, SC, VA, WA and WI. No offers may be made or accepted from any resident outside the specific states referenced.

Clearview Portfolio Consulting Market Update – Regarding Recent Volatility

Last Friday we saw inflation jump 8.6% (shelter, gasoline and food being biggest contributors). This was an increase from the prior month and the largest increase since December of 1981. Investors are now questioning if 50 basis point increases from the Federal Reserve is enough to rein in inflation. The Feds meeting this week led to a .75% interest rate increase.  As a result, yields have increased on the likelihood that rate hikes may be more aggressive in the coming months. There is also the possibility that the Fed may decide to raise rates in-between regularly scheduled meetings. Higher yields to control inflation will likely slow the economy down as borrowing costs for mortgages, cars, credit cards etc. move higher. This uncertainty in the bond market is flowing into the equity market as stocks fell hard on Friday and look to have another selloff today.  The S&P500 is down greater than 20% year to date so we are officially into bear market territory. The silver lining here is that the selloff in stocks has caused valuations to no longer look stretched.  The S&P500 is trading very close to its 25 year average price-to-earnings ratio of 16.8x (according to JPMorgan).  While a further drop in equities is possible, stretched valuations in stocks is no longer a concern.  Investors should expect a volatile summer in the markets as gas prices continue to creep higher and eat into discretionary consumer spending.  Consumer discretionary stocks have been the worst sector of the stock market this year, losing almost 30%.  Long-term investors should expect to experience this type of volatility as part of a healthy stock market cycle.  With the Fed focused on inflation, the bond market will also continue to be volatile for the months ahead until inflation begins to wane.  It is important on these days to remember that panic is not an investment strategy and we have experienced these types of economic uncertainties in the past.

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC and Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Allied Financial Advisors, LLC and Cambridge are not affiliated.  This communication is strictly intended for individuals residing in the states of AZ, CA, CO, CT, DE, FL, GA, IA, IL, IN, KS, MA, MD, MI, MO, MT, NC, NH, NJ, NY, PA, SC, VA, WA and WI. No offers may be made or accepted from any resident outside the specific states referenced.

Clearview Portfolio Consulting May 2022 Market Recap

Key Points:

  • Stocks were slightly positive in May, but volatility continues to remain high.
  • Energy stocks continue to be the leading equity sector as energy prices remain elevated
  • The US Bond market experienced its first positive month of the year as yields fell

Stocks remained volatile in May as investors continue to question if the Federal Reserve can control high inflation without causing a recession.  Over the coming months, the market will be anxiously watching US and global economic data.  If economic data is too strong it could be inflationary; if it is too weak it could be viewed as recessionary.  This uncertainty has brough volatility to equity markets.  The S&P500 eked out a 0.18% monthly gain while half of its daily returns were greater or less than 1%.   Investors continue to eye high energy prices and their effects on consumer spending.  This has caused some companies to lower expectations for future earnings, specifically in consumer stocks. 

Six of the eleven major equity sectors were positive for the month with energy stocks continuing their market dominance.  The rebound in energy prices in May resulted in energy stocks gaining 15.8% for the month and 58% for the year.  Utilities (+4.3%) and financials (+2.73%) were the next biggest gainers.  Real estate (-5%), consumer discretionary (-4.9%) and consumer staples (-4.61%) were the worst performers of the S&P500.  Small caps were flat for the month after a challenging April while the tech-heavy NASDAQ lost another 1.93%.  The NASDAQ Composite is down 22.5% for the year after strong double-digit gains over the past 3 years.  International stocks gained modestly with the MSCI All Country World ex-US Index up 0.72% in May, but still down 10.72% for the year.  Stocks in Europe and Asia are still being influenced by the Russian invasion in Ukraine as well as shutdowns in China.

Bonds saw their first positive month of 2022 with the Bloomberg US Aggregate Bond Index gaining 0.64%.  Longer duration municipal, Treasury and mortgage bonds performed the best as yields fell.  Fed Chairman Jerome Powell expects 50 basis point increases in the Federal Funds Rate at the June and July Federal Reserve meetings in an effort to slow down inflation. The bond market has largely priced in these moves already.  After July, it is expected that the Fed will take a “wait and see” approach to monetary policy. Higher interest rates usually lead to slower economic growth which has caused credit spreads to start to widen. As a result, high yield bonds lagged the overall bond market in May.

While there are fears of a recession in the US in the coming quarters, a look to the job market paints a different picture.  The unemployment rate stands at 3.6% and there are a record number of job openings. Consumer and business spending continues to be strong in the US but may moderate with higher interest rates.  Should we experience a technical recession (two consecutive quarters of negative GDP growth), it will likely be mild.

Sources: Morningstar Direct, JPMorgan, First Trust, Wall Street Journal