Markets Hovering, Reading the OBBBA, Gambling is Bad, Where is the Left Glove?

July 13, 2025

LITTLE MOVEMENT: In another week of tariff threats, the week ended close to where it began, near record highs. On Friday, President Trump announced the imposition of a 35% tariff on Canadian import (up from 25%). This followed Wednesday's announcement of a 50% tariff on Brazilian goods. Earlier he threatened Japan and South Korea (and others) with similar actions by August 1 unless trade deals are reached. The economy has remained resilient through prior such announcements, and so the market reactions are now more muted. It also helped that Delta Airlines and Levi Strauss both announced upward revisions to their third quarter earnings forecasts. This coming Tuesday, we will get new Consumer Price Index data.

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

THE NEW $6,000 SENIOR TAX DEDUCTION: The One Big Beautiful Bill Act (OBBBA) includes a new tax deduction for those 65 and older. It is a $6,000 deduction with an income phase out. If your Modified Adjusted Gross Income (MAGI) is above $75,000 (or $150,000 for married filing jointly) the deduction begins to decrease, and it completely phases out at $175,000 ($250,000 for married filing jointly). It is available this year and through 2028 unless Congress elects to extend it.

POST-OBBBA ESTATE PLANNING: Also under the new law, the federal estate tax exemption is set at $15 million per person for 2026. Without the OBBBA, it would have been $7.16 million in 2026. It will increase with inflation.

ONLINE SPORTS GAMBLING: In 2018, the U.S. Supreme Court paved the way for states to legalize sports gambling. Many states (38 in fact) have opened their states up to online sports gambling. In 2023, the total amount wagered was over $100 billion, and growing. In those 38 states, bankruptcies have risen 28%. A recent study found that the likelihood of bankruptcy filing increases by as much as 25-30% in the three to four years after a state legalizes online sports gambling. Debt collections have risen 8% in those states. Credit scores have decreased. Credit scores in states with legal, online, sports gambling have seen credit scores decrease three times faster than the average overall. Credit card companies have responded by lowering credit limits in states that have legalized online sports gambling. AI algorithms and data are being used by sports betting companies to lure in bettors, using as many as 93 data points on individuals. A recent study indicates that 86% of the profits from online gambling companies come from 5% of gamblers.

BIGGER HOMES FOR LESS PEOPLE, AND OLDER OWNERS: In 1920, the average size of an American home was 1,048 square feet. In 1950, it was 983 square feet, and then it began to grow steadily until 2015. Below are years from 1960 to 2020 with the average square footage of an American home followed in parentheses by the average number of people in those homes:

1960 1,289 (3.33)

1970 1,500 (3.14)

1980 1,740 (2.76)

1990 2,080 (2.63)

2000 2,266 (2.62)

2010 2,392 (2.59)

2015 2,461 (2.54)

2020 2,261 (2.53)

As you can see below with data compiled by the U.S. census, the average age of homeowners has also increased (the yellow line is 1973 and the blue line is 2023).

HEALTHY OUTLOOK FOR NON-RESIDENTIAL CONSTRUCTION: The Dodge Momentum Index (DMI) tracks planning activity for nonresidential construction. According to Dodge, this index leads actual construction spending for nonresidential buildings by about a year. For June, the DMI rose by 6.8%. Leading areas of activity are warehouse, recreational, and data center planning. Planning for hotels, education and retail stores was more subdued. The DMI was up 20% compared to June of last year.

MEANWHILE, IN CANADA: Canada has been stumbling along with 7.0% unemployment all year. In June, the rate dropped a bit to 6.9%.

TAKE THE PLUNGE, HAVE A PARTY!: According to the American Time Use Survey, Americans are socializing less and less. In the last twenty years, the amount of time Americans have spent attending or hosting a social event declined by 50%! (This trend was already in full swing before the pandemic.) Those 15-24 saw a 69% drop. More time is being spent in front of a television. The rise in smartphone use has also correlated with the decline in socializing in-person. I hope this trend has bottomed out.

HOW IS THIS EVEN POSSIBLE?: On Saturday, I went out to my garage to get prepared to do some yardwork. Some time ago, I went to hardware store to buy some work gloves. I bought a package of rubber work gloves. Over time, I'll pull out a right glove and a left glove and do some work, and put the gloves away. I'm not great about always putting them away in the same place. On Saturday, I checked the shed and the garage to get a pair of these gloves. I found five. They are all right handed gloves! I really didn't want to do yardwork anyway.

Have a great week!

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Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

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SOURCES:

LITTLE MOVEMENT: https://www.wsj.com/finance/stocks/u-s-stock-investors-keep-calm-carry-on-through-weeklong-gauntlet-of-tariff-threats-c2f4e794?mod=stocks_news_article_pos1

ONLINE GAMBLING: https://unherd.com/newsroom/bankruptcies-jump-28-in-states-with-legal-online-sports-betting/?us AND https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4903302 AND https://bircheshealth.com/resources/media-problem-gambling

THE NEW $6,000 SENIOR TAX DEDUCTION: https://www.thinkadvisor.com/2025/07/07/how-the-new-6000-tax-deduction-for-seniors-really-works/

POST-OBBBA ESTATE PLANNING: https://www.wealthmanagement.com/estate-planning/big-beautiful-bill-what-estate-planning-steps-make-sense-now-

TAKE THE PLUNGE, HAVE A PARTY!: https://www.kitces.com/blog/weekend-reading-for-financial-planners-july-12-13-2025/?utm_source=ActiveCampaign&utm_medium=email&utm_content=Weekend%20Reading%20For%20Financial%20Planners%20%28July%2012-13%29%20%5BNEV%5D&utm_campaign=NEV%20Friday%20Email&vgo_ee=n6ulwLLrmSbWtMxJRuoWlXPJLMNbsnAhY%2FzDqgOl0hdgW7n4hQ00yeLdh6vjjA%3D%3D%3AbtmTMkaNZtOMK9JzNRi7w6xhj%2BjfBq%2Bo#SEC-Plan

HEALTHY OUTLOOK FOR NON-RESIDENTIAL CONSTRUCTION: https://www.construction.com/category/dodge-momentum-index/

BIGGER HOMES FOR LESS PEOPLE, AND OLDER OWNERS: https://www.businessinsider.com/charts-how-homes-have-changed-since-2010-2021-6?op=1#the-median-area-of-a-new-house-dropped-again-in-2020-but-was-still-larger-than-completed-homes-two-decades-or-even-a-decade-ago-1 AND https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html AND https://www.census.gov/data/tables/time-series/demo/families/households.html

MEANWHILE, IN CANADA: https://www.wsj.com/economy/central-banking/canada-unemployment-rate-slips-to-6-9-in-june-ba2bbd79?mod=economy_feat2_central-banking_pos1

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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.