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March 9, 2025
FEBRUARY JOBS REPORT: Despite a decline in federal government jobs, the U.S. economy added 151,000 net new jobs in February. The unemployment rate ticked up from 4.0% to 4.1%. Average hourly earnings rose 0.3% from January, and were 4.0% higher than February of 2024. This showed hiring at a steady enough pace to temporarily assuage investors and economists concerned about the health of the U.S. labor market.
TARIFF UNCERTAINTY DRIVES STOCK PRICES DOWN: It is an old axiom that markets dislike uncertainty. The Trump administration's various and persistent tariff proposals and actions have created uncertainty. How will they affect economic growth? This past week the downward momentum intensified before recovering a bit on Friday. The uptick on Friday was caused by comments by Fed Chair Jerome Powell and the February jobs report. The S&P 500 is now in negative territory for the year. 491 of the S&P 500 companies have reported fourth quarter earnings, and 74% have beaten estimates. Watch for the CPI report this coming week to have an impact on stock prices.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
INVESTORS HAVE TURNED BEARISH: The American Association of Individual Investors conducts a weekly survey asking members about their expectations for the stock market over the next six months. In the most recent survey, 57% had a bearish outlook, and only 19% had a bullish outlook. The rest were neutral.
P/E RATIOS: The forward one-year price-to-earnings ratios for the S&P 500 companies has averaged 18.8 over the last five years, and 17.6 over the last ten. It currently stands at 21.2, not as expensive as a short time ago, but still above average.
HOME PRICES: According to CoreLogic, the median sales price for a home in the U.S. is now $375,000. U.S. home price growth in January was flat, but 3.3% over January of one year ago. CoreLogic's economists are predicting another 3.6% increase over the course of the next year, but there will be more variation between regions of the country.
IS THE U.S. ECONOMY GROWING?: It depends on who you ask. Goldman Sachs believes U.S. GDP growth in the current quarter is about 1.3% annualized. Bank of America says it is 1.9%. The Federal Reserve Bank of Georgia estimates that the economy is contracting at an annualized rate of 2.4%.
ANOTHER YEAR WITH THE SKI BUDDIES: It has now been 21 years that a bunch of guys numbering roughly a baker's dozen makes its way to a mountain and skis for several days. This year we tried Steamboat Springs, Colorado. I had never been. When I was in missionary training right out of college, one of my co-trainees was from Steamboat Springs, and I had always wanted to go see it. I finally did. We had four great days of skiing. Every day was different. The first day we were in a cloud all day and visibility was awful, but the snow was great. We had snow just about every day, and the trails were challenging. Two of our group got injured (dislocated shoulder and sprained hand) which is rare for us. I came out unscathed. Guys need this kind of activity and friendship, and I am grateful.
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
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(610) 628 4545
“Aging is better than what came before. I don’t have the worries that I used to. And yet I don’t have advice for my younger self, because I needed to go through all that to get to this place of freedom and fun and empowerment and strength.’’ Brooke Shields
"The sleep of a laborer is sweet, whether he eats little or much, but the abundance of a rich man permits him no sleep." Ecclesiastes 5:12 (NIV)
SOURCES:
TARIFF UNCERTAINTY DRIVES STOCK PRICES DOWN: https://www.wsj.com/finance/stocks/dow-trims-losses-to-end-a-tough-week-02222cf6?mod=stocks_news_article_pos2
FEBRUARY JOBS REPORT: https://www.wsj.com/economy/jobs/jobs-report-february-2025-unemployment-economy-1e0d14a8?mod=jobs_news_article_pos1
INVESTORS HAVE TURNED BEARISH: https://myweeklystock.substack.com/p/weekly-market-recap-mar-3-7-the-s?utm_campaign=email-half-post&r=s86er&utm_source=substack&utm_medium=email
IS THE U.S. ECONOMY GROWING?: https://www.atlantafed.org/cqer/research/gdpnow AND https://www.calculatedriskblog.com/2025/03/q1-gdp-tracking-mid-to-high-1-range.html
(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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