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Healthy Economic Growth, Scary Tech, and Hagrid

Writer: Doug MacGray
Doug MacGray
5 days ago
6 min read

November 1, 2026


STRONG ECONOMIC GROWTH: In the third quarter of 2026, real gross domestic product grew at an annualized pace of 3.4%. Personal spending remained the key driver, growing at 3.8%. In the past year, personal spending had been averaging a 2.5% growth rate, so this was a bit of a jump. Over the past twenty years, the average quarterly growth reading has been 2.2%. Data center construction was also a big contributor. So-called "core" real GDP, which excludes the more volatile categories of government purchases and international trade, grew at a 4.9% annualized rate, the strongest reading in five years.


THE FED HOLDS RATES FOR NOW: Last week, the Fed met and decided to leave its key interest rate alone. The vast majority of commentators I am reading predict a rate increase in December, despite Chairman Warsh's comment that the Fed did not want to "throw sand in the gears" of the economy by raising rates to slow demand.


MIXED WEEK: The week started off strong for large U.S. companies. Through Wednesday, the S&P 500 was up 1.6%, and the NASDAQ Composite was up 2.29%. Tech stocks then led a late-week decline fueled by disappointing earnings reports by Amazon and Intel, two tech giants. The overall concern is that the tech giants are spending a lot of money and potentially not earning enough, and borrowing at ever-increasing rates to continue their spending. On the other hand, actual earnings remain quite high and potentially supportive of growing stock values. That is the tech side of the ledger. The Russell 2000 (small U.S. companies) rose this week by 1.29%. With the Fed holding steady mid-week, bond yields dropped a bit, and the Bloomberg U.S. Aggregate bond index rose as well. Developed international stock indices rose. So while Friday's headline decreases in the S&P 500 and NASDAQ composite may have caused some jitters, it was really a mixed week.



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



PCE INFLATION: According to the personal consumption expenditures index for September, prices rose by 0.5% and are up 3.6% for the past year. Gasoline and other energy goods rose 9.1%.


MONEY SUPPLY: In the past year, the supply of U.S. money, as measured by the US M2 Money Supply index, rose by 5.36%. This is very good news. In the 2010s, the average M2 growth rate was 6%, and inflation ran consistently below 2.0%. From February of 2020 until April of 2022, M2 grew by nearly 41%, a big reason for the persistent inflation that followed.


WALL STREET JOURNAL ASSESSES FINANCIAL ADVISORY FIRMS: Last week, the Wall Street Journal included an article on large Registered Investment Advisors (RIAs). It reviewed and rated the massive RIAs in the country. Stonecrop Wealth Advisors is a RIA. I found a few of the findings interesting. For example, it found that the assets under management (AUM) fee is by far the most common, and the average fee is 0.96%. At Stonecrop, no one pays that much, not even our smallest clients. Our highest fee is 0.95%, so our average is much less than 0.96%. Moreover, according to the article, many RIAs charge an AUM fee but charge an additional fee for financial planning. We don't. The article recommends that you find "a fiduciary financial advisor." We could not agree more. The article went on to say that you should consider switching financial advisors if your advisor:

  • Will not change your plan to better align with your life changes or to correct underperformance,

  • Does not offer wealth management services (e.g. estate planning review, tax optimization)

  • Ignores your calls, misses meetings, or fails to follow up on questions or concerns you have, or

  • Pushes products or pushes you into riskier investments than you are comfortable taking on.


Overall, it was a very fair article about our industry and what consumers should watch out for.


ONE MORE FROM LAST WEEK: In my personal experience, it takes a while to get over jet lag coming back from Europe. After almost a week, I'm doing pretty well, but now we change our clocks back this weekend! Anyway, I wanted to bring up one more spontaneous, joyful experience we had on our trip to Italy. In Maiori one evening, we ventured out to go to a restaurant that was highly rated online. It was about a five-minute walk. They told us the dining room was full, but there might be openings in a half hour. We then simply walked up the main street that we were on, and found another restaurant that had a table for us. It was a small place with maybe ten tables inside. Our waiter Luigi provided attentive service and an entertaining sense of humor. The food (no surprise) was delicious. But toward the end of our meals, two of the three waiters (Luigi is on the right) got up and belted out "O Sole Mio." It was awesome.



SCARY: I got to see and spend time with all six grandchildren on Saturday night, and see all their great and varied costumes. The adults also did a good job. The scariest was the president of Stonecrop dressed up as Hagrid. Looks a bit too real. (But I have a suspicion that Hagrid is not a Philadelphia Eagles fan.)



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




"If someone says 'Give me one word of advice,' I say 'be fearless.' And knowing without any shadow of a doubt that what they have to give - who they are - is totally unique and not shared by anybody else. And to believe in that uniqueness. It took me decades before I developed courage as an actor." Patrick Stewart (1940-2026)


"We are reminded that, in the fleeting time we have on this Earth, what matters is not wealth, or status, or power, or fame, but rather how well we have loved and what small part we have played in making the lives of other people better." Barack Obama*


"Each of you should use whatever gift you have received to serve others." I Peter 4:10 (NIV)


*In commemoration of the 250th anniversary of the United States, I am finding a quote from a president each week, in order. This is the 44th week, and Barack Obama was our 44th president.


SOURCE:

STRONG ECONOMIC GROWTH: https://www.ftportfolios.com/retail/blogs/economics/index.aspx AND https://fred.stlouisfed.org/data/A191RL1Q225SBEA

MONEY SUPPLY: YCharts.com


© 2026 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved


*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.


The information contained herein has been compiled from third-party sources (see above) and is believed to be reliable; however, its accuracy is not guaranteed. This newsletter is not an offer or a solicitation to buy or sell securities, and you should not construe it as investment, tax, or legal advice, or a specific investment recommendation. Any opinion included in this newsletter is our judgment as of the date of this report and is subject to change without notice.


If you want any additional information regarding Stonecrop Wealth Advisors, including management fees and expenses, you can contact us directly or review our Form ADV Part 2, which can be found here (www.adviserinfo.sec.gov), or which we will be happy to provide to you upon request. Only God knows the future, and so while past performance can be helpful information, it is not a guarantee of future performance, which could be completely different.


SDG



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