Bubble Worriers, Good Corporate Earnings, LNG, and Existential Questions

November 23, 2025

BUBBLE WORRIES: I have been in this business for over a quarter of a century, and I have observed that there is rarely a market that investors trust, and when things are at all positive we get the consistent question, "Is now a good time to put money in the market, or should I wait? We've had (X years) of rising values, so it has to go down soon, right?" Not always, but way more often than not, in my observations, waiting did not work out for people who asked us this question and kept money on the sidelines. Our current stock market has been causing those questions for years. "Is now a good time....?" And when that attitude gets more pervasive, the trading trigger finger gets itchy. We are seeing some of this play out in the past few weeks, and especially last week. One good example was Thursday. Nvidia's earnings had just come out, and the markets were responding positively, and then, in a matter of two hours the S&P 500 fell by 2%. We could not figure out why, and we were not alone. A Wall Street Journal article said, "A sudden selloff dragged the S&P 500 down more than 2 percentage points in 2 hours. The strange thing was: Nobody seemed to know exactly why." Most of the damage was done to companies involved in AI. The AI stock rally is one people just don't know if they can trust. So far, the AI earnings that have been driving stock prices upward have been happening. They have not been fake or weaker than hoped. And yet, investors decided to take some of their profits off the table. The week ended on a positive note, which shows that "buy the dippers" are still lurking.

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

U.S. CORPORATE EARNINGS: 472 of the S&P 500 companies have reported their third quarter earnings, and 83% have beaten estimates. The historical average is 67%.

EXISTING HOME SALES INCREASE IN OCTOBER: Sales of existing homes increased by 1.2% in October to hit an eight month high, and yet sales remain historically low. Some things are helping the housing market. The average rate for a 30-year mortgage has decreased to about 6.3%, the lowest in a couple of years. The median price of an existing home is up only 2.1% in the past year. The inventory of available existing homes for sale has risen by nearly 11% in the past year, but still remains below what the National Association of Realtors considers normal.

SEPTEMBER JOBS REPORT: The Bureau of Labor Statistics produced its first official report since the shutdown. The September jobs report showed that the U.S. economy added 119,000 net new jobs. The unemployment rate ticked up from 4.3% to 4.4%. This information is a tad stale, and we will not likely get an October report since no one was collecting data.

ROTH CONVERSIONS INSIDE A 401(k) RETIREMENT PLAN: In 2010, the U.S. Congress passed, and President Obama signed, the Small Business Jobs Act. One provision of that act authorized employer-sponsored retirement plans (401(k)s, 403(b)s, and 457(b)s) to offer in-plan Roth conversions. What this means is that you may be able to convert some of your traditional retirement account and convert it to Roth. The traditional money would have been invested using pre-tax dollars. When you convert, you must pay income tax on the converted dollars. For example, if you convert $10,000 of your 401(k) plan from the traditional account to a Roth account, you will have to report an additional $10,000 of income for that year, and pay tax on it. It took a year for the IRS to provide detailed guidance on the implementation of in-house Roth conversions. Little by little, 401(k) and other employer-sponsored retirement plans started offering this option. One very large plan, the U.S. Thrift Savings Plan (TSP) for the U.S. Military, will begin offering in-house Roth conversions in 2026. A Roth in-plan conversion may be beneficial, but you have to determine how it will affect your taxable income for the year, how much more income tax it will create, whether it will put you into a higher marginal tax rate, and whether you have the money to pay the additional tax. If you are in the TSP, or your employer's plan offers this as an option, and you want some help in making the decision, get the help of a financial professional (I know a guy!).

LNG EXPORTS: In 2016, the Sabine Pass Liquid Natural Gas (LNG) export terminal opened, the first such facility in the lower 48 states. Since then, LNG exports have climbed rapidly. In 2024, the U.S. exported a record 21.1 billion cubic feet of natural gas per day. Through August of 2025, LNG exports have been running 13% ahead of last year. The U.S. now has eight major LNG export terminals in operation. Eight more are under construction.

GETTING EXISTENTIAL: We often ask new clients existential questions such as "how do you want to leave a mark on life?" I just heard a well-known author say he used to ask his young adult children these questions, and I quote: "I want you to tell me what you are going to do to find the answers to two distinct questions, or to find an understanding of the answers to two distinct questions: 'Why are you alive?' and 'For what would you gladly give your life on this day?'" Wow. Answering those questions will require you to put down your phone, walk away from your computer and the television, and think for a few minutes. Probably worth it.

FAMILY RUNNING: When I run marathons, I feel a little selfish. All those lonely hours of training come at a cost of time, which generally means a bit less time for family. My last two runs have been with family members. Two weeks ago, as reported here last week, I ran a 5k with my grandson (and son). This weekend I ran the Philadelphia Half Marathon with my daughter and son-in-law (while my wife watched their kids, thank you, Deb!).

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

dmacgray@stonecropadvisors.com

"Only in something larger than ourselves can our lives find meaning." Vaclav Havel

"If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever." I Timothy 5:8 (NIV)

SOURCES:

ROTH CONVERSIONS INSIDE A 401(k) RETIREMENT PLAN: https://www.tsp.gov/making-contributions/traditional-and-roth-contributions/roth-in-plan-conversions/ AND https://www.empower.com/the-currency/money/in-plan-roth-conversion

U.S. CORPORATE EARNINGS: https://myweeklystock.substack.com/p/weekly-market-recap-nov-17-21-red?utm_source=post-email-title&publication_id=697043&post_id=179380342&utm_campaign=email-post-title&isFreemail=false&r=s86er&triedRedirect=true&utm_medium=email

GETTING EXISTENTIAL:https://www.youtube.com/watch?v=LIZqQ2dHCUs

BUBBLE WORRIES: https://www.wsj.com/finance/stocks/a-wild-week-in-markets-leaves-wall-street-bracing-for-more

EXISTING HOME SALES INCREASE IN OCTOBER: https://www.ftportfolios.com/Commentary/EconomicResearch/2025/11/20/existing-home-sales-increased-1.2percent-in-october

LNG EXPORTS: https://www.ftportfolios.com/Commentary/EconomicResearch/2025/11/20/u.s.-natural-gas-exports-keep-hitting-records

SEPTEMBER JOBS REPORT: https://www.bls.gov/news.release/empsit.nr0.htm

(c) 2025 Anno Domini, 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.