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Five Years Old!

  • Writer: Doug MacGray
    Doug MacGray
  • Apr 14
  • 5 min read

April 13, 2025


HAPPY BIRTHDAY TO US!: As of last week, Stonecrop Wealth Advisors hit its fifth year. That is no small feat, and I am very proud of this team. We have roughly doubled in size in employees, assets managed and clients since inception! I am very grateful.



TARIFFS DOWN TO 10%: On Wednesday, President Trump announced that the reciprocal tariffs announced one week before would be paused for 90 days for most countries. Instead, an across-the-board 10% tariff will remain in place while the administration negotiates country-by-country trade deals. Tariffs on China were increased. On Friday afternoon, smartphones, laptop computers, memory chips and some other electronics were exempted from the reciprocal tariff regime.


FEBRUARY INFLATION DATA: The Consumer Price Index decreased 0.1.% in March, the first monthly decline in nearly five years. A steep decline in gas prices (over 6%) was the primary cause. Over the last 12 months, the index increased 2.4%. It was 2.8% last month and 3.0% the month before. So-called "core" inflation, that strips out energy and food, rose by 0.1%, and the one-year rate decreased from 3.1% to 2.8%. Core inflation is more closely watched by the Fed, and it is the lowest this figure has been since March of 2021.


PPI ALSO DOWN: The Producer Price Index (PPI) measures prices paid by wholesalers, so often a leading indicator of prices for consumers. For March, the PPI decreased by 0.4%. The PPI rose 0.1% in February. For the year, the PPI is now 2.7%.


BIG BANKS DOING WELL: Last week, JPMorgan Chase, Morgan Stanley and Wells Fargo all reported their first quarter earnings, and all three reported profits that were better than expected.


ANOTHER VOLATILE WEEK ENDS POSITIVE: The week started with continued tariff hangover until Wednesday when President Trump announced a 90-day pause on tariffs for the countries that have shown a willingness to negotiate. Markets rocketed up on Wednesday, fell some on Thursday, and rose again on Friday to give us a week where the three major U.S. stock indices ended up over 5% to the positive. The favorable inflation data (see above) did not impact markets as much as they might have because of concerns that tariffs will end the positive inflation trend. Also helping was the news that big banks in the U.S. are doing quite well (see above), but once again, this good news came with the caveat that it may not last because, you know, tariffs.



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



TREASURY BONDS: Normally, when investors get skittish about stocks, they run to Treasury Bonds, and that dynamic often lowers the yield on the Treasury Bond, increasing the value of the bond. Last week was different. The initial response to President Trump's tariff announcement the prior week did send yields on the 10-year Treasury lower. But last week the opposite occurred. The 10-year yield rose more than a half of a percent, a big spike. A major reason for this counter-intuitive move is that China and Japan were selling Treasury securities amidst the trade tumult. Concerns about the Treasury bond market were allayed by the solid results of a U.S. Treasury debt auction on Wednesday (solid investor demand as the U.S. sold $39 billion in 10-year notes). Also helping were comments of Federal Reserve Bank of Boston President Susan Collins who stated that the Fed remains absolutely ready to step in if needed to stabilize the market, but that the market continues to function well. The bond market will continue to be a focus in the near term as the trade battles continue.


CONSUMER SENTIMENT SINKS: The closely-watched University of Michigan's consumer sentiment index decreased further this month. It decreased to 50.8 for April from 57.0 the month before. Consumers surveyed expect inflation to rise to 6.7% during the year ahead, the highest such reading since 1981. Consumers are also concerned about business conditions, personal finances and labor markets.


CREDIT CARD DEBT TREND: According to data complied by the New York Fed, and as shown in the graph below, delinquencies on credit card debt rose dramatically from the first quarter of 2022 until recently, which is not good for an economy that depends on the consumer for its economic health. Auto loan debt and mortgage debt also moved up. In the fourth quarter of 2024, transition into early delinquency (30 days plus) held steady for nearly all loan types except credit card debt which experienced a small uptick.



ANOTHER NEWSLETTER?: I have written this newsletter for nearly twenty years now. I enjoy it, and I have missed very, very few weekends, maybe a handful. As you know (from the first entry on this email), I have now been leading Stonecrop for five years. I have heard from several of you that, all of a sudden, you are now getting my former firm's email. That's okay. If they or any other financial firm provide you with valuable information, go ahead and enjoy it.


I LIKE "THE SOUTH": My brother in Massachusetts sent me this picture from his house on Saturday morning. Whenever I get homesick for my native Massachusetts, I will look at this April picture of my former stomping grounds. We got a snow flurry on Saturday morning down here in "the South."



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



 "Your gifts lie in the place where you values, passions, and strengths meet. Discovering that place is the first step toward sculpting your masterpiece, your life." Michelangelo


"Whoever sows sparingly will also reap sparingly." II Corinthians 9:6 (NIV)


SOURCES:

TREASURY BONDS: https://www.msn.com/en-ca/money/markets/10-year-treasury-yield-tops-4-5-after-surge-this-week-that-s-worrying-wall-street-and-the-white-house/ar-AA1CJgdk AND https://www.zerohedge.com/markets/stocks-finish-day-green-bonds-hit-after-another-chaotic-week-newsquawk-us-market-wrap


(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.

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