August 12, 2024
MORTGAGE RATES FALL: Last week, the average 30-year mortgage in the U.S. fell sharply to 6.47%, the lowest it has been since May of 2023.

A BORING WEEK?: If all you did was look at where stocks ended on Friday, you might have thought it was an uneventful week. You'd be wrong. Markets continued their downward summer swoon on Monday with most major indices down around 3%. The swoon was led by the tech sector, but every sector was hurting. The selloff started in Japan which has been struggling since the Bank of Japan raised interest rates. With no no real catalyst, stocks bounced back little by little, and then dramatically on Friday to basically start where the week began. So it was anything but a boring week, but if you are enjoying your summer and not paying attention, you are probably the smart one.

LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.

NEW UNEMPLOYMENT CLAIMS: We do not always highlight this data point because it comes out every week. But with recent worries about the labor market, investors were looking for positive signs, and last week's weekly unemployment report provided positive news. There were 233,000 new claims which was 17,000 less than the week before. The 4-week moving average is 240,750 which is not an unhealthy number. What investors and economists are looking for is a trend, and last week's number, at least for the moment, stopped talk of a negative trend.
CANADA'S UNEMPLOYMENT: Canada's unemployment rate is now 6.4%, about 1.0% higher than a year ago. This explains why Canada has already begun lowering interest rates.
CRITICAL MINERALS: Currently, China produces between 80-100% of all the world's natural graphite, manganese and rare earth minerals. It produces more than half of the world's cobalt, and nearly half of all the world's lithium and aluminum. It is also a major producer of the world's copper and nickel, all critical minerals for the world's economy and energy industries.
SMALLER RAISES: Among 1,900 companies polled by the Wall Street Journal in the second quarter, about half said they had downsized their budgets for salary increases. The median raise is now down to 4.1% after it was 4.5% in 2023. These same companies indicated that the median pay raise in 2025 will be 3.9%.
COMMERCIAL REAL ESTATE: The Dodge Momentum Index is an index that tracks commercial real estate project activity. Due in no small part to the rapid growth of the construction of data centers, this index is doing quite well at the moment. But there has also been widespread growth across all segments of the commercial real estate sector. With the potential of a Fed rate cut in September becoming increasingly more likely alongside slower inflation and weaker labor markets, owners and developers are gaining optimism for 2025 market conditions.

THAT'S A CRAZY ROUTE: By the time you read this, the Paris Olympic Marathon will be over. Below is the elevation map of the route. That is one crazy marathon route. Not only are there some steep uphill climbs, always a challenge in a marathon. But there is a long, steep downhill right before the final ten kilometers when the racers will be jockeying for position to try to win. You might think running downhill right before the final push would be welcome. You would be wrong. Especially with a slope that steep, the runners will be shredding their quadricep muscles. You can't just let gravity take you down. Your legs, and in particular your quadriceps, have to provide brakes the whole way down. I've never seen a marathon route quite like this (see below). One of the marathons I ran was the Steamtown Marathon in Scranton, PA (home of Dunder Mifflin Paper Company). The first half of the marathon is a steady, steep downhill. My legs have never felt so unsteady as they did in the second half of that marathon. These runners are going to be hurting. It will be quite a challenge.

I am now writing after the completion of the marathon. Perhaps the best marathoner of all time, Eliud Kipchoge, didn't even finish. When he hit a steep hill at mile 18, he was reduced to a walk, and bowed out soon thereafter. Ethiopia's Tamirat Tola, a recent entry (a teammate dropped out a few weeks ago opening the door for Tola) won the event in 2:06:26, an incredible time.
CONGRATULATIONS SCOTT AND DANIELLE: The son of very good friends were married, and we attended their reception this weekend. Scott was a classmate and good friends with one of my children. It is fun to go to weddings of friends of my children. I run into young people (between 25-35) who I have known for many years, and who can't quite make the transition to call me "Doug," so I still get a lot of "Mr. MacGray." I don't mind. I am always encouraged when I see two young people pledge their lives to each other. Every marriage faces its own unique, and sometimes daunting, challenges, and none, as we know, are guaranteed. But I still enjoy seeing the looks in their eyes as they face their futures together with optimism and commitment to the happiness of each other. God bless Scott and Danielle.

Have a great week!
Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.

Douglas R. MacGray, J.D., C.F.P. ®
President
Stonecrop Wealth Advisors, LLC
Direct | Cell | Fax
(610) 628 4545
"I'm confident to say that if you want to grow in a profession, consistency is the key...I'm strict about my work goals and training." Eliud Kipchoge
"Do you not know that in a race all the runners run, but only one gets the prize? Run in such a way as to get the prize." I Corinthians 9:24 (NIV)
SOURCES:
NEW UNEMPLOYMENT CLAIMS: https://www.dol.gov/ui/data.pdf
CRITICAL MINERALS: statista.com
CANADA'S UNEMPLOYMENT: https://www.wsj.com/articles/canada-unemployment-rate-steady-at-6-4-in-july-ffcf4bbc?mod=economy_lead_pos1
COMMERCIAL REAL ESTATE: https://www.construction.com/category/dodge-momentum-index/
SMALLER RAISES: https://www.wsj.com/lifestyle/careers/prepare-for-your-next-raise-to-be-smaller-than-you-hoped-cbcc54f9?mod=Searchresults_pos1&page=1
(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved
Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.
SDG
*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.
*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.
*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.
Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.
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