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January 8, 2024
STRONG JOBS REPORT: 216,000 net new jobs were added to the U.S. economy in December, a higher number than the prior two months. This was larger than had generally been expected. 2.7 million jobs were added in all of 2023. The unemployment rate stayed the same at 3.7%. Wages in December were 4.1% higher than a year earlier.
STRONG MOTOR VEHICLE SALES: In December, sales of light vehicles were up 3.3% from the prior month and up 16.8% from December of 2022. General Motors, Ford, Toyota and Honda all reported robust sales growth. Stellantis (Chrysler, Jeep and Ram) reported a 1% decline.
TECH STOCKS STUMBLE OUT OF THE GATE: Giant tech stocks dragged down markets this week. Apple, Tesla and Amazon were all down by over 4% for the week (Apple down nearly 6%), and Google's parent company was down 2.8%. These and a few other large companies (including Meta, Microsoft and Nvidia) largely led market gains in 2023. Apparently, investors thought it was time to take their profits and do some selling.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
WHERE IS U.S. MANUFACTURING GOING?: The Institute for Supply Management (ISM), tracks the manufacturing industry in the U.S. According to ISM's analysis, U.S. manufacturing activity contracted for the fourteenth month in a row in December. Before that, the U.S. had experienced 30 straight months of expansion. The pace of decline in December was slower than the prior month and better than most economists had expected. Manufacturing makes up a bit over 10% of the overall economy.
AVOIDING THE RED SEA: We are always paying attention to geopolitical risks that could affect the global or domestic economy, and activity in the Red Sea now qualifies. On Friday, Maersk, a large shipping company, announced that its ships will be avoiding the Red Sea. These ships will take the longer route, bypassing the Suez Canal, and traveling around the Cape of Good Hope (think Vasco Da Gama) to avoid attacks by Houti militants. European companies like Ikea and Electrolux are already reporting potential delays in certain products due to this problem.
TRUST: According to a recent Statista survey, the most trusted institution in America is small business. It is nice to be working in an institution that is the most trusted! 65% of survey respondents trust small businesses. The only other institution that registered over 50% was the military. Congress came in last at 8%. Tied for second-to-last at 14% are big business and television news. The presidency registers at 26%. The church is 32%. Banks and public schools came in at 26%. Institutions have some work to do to gain back trust. These are not good numbers.
COME TO OUR OFFICE BUILDING FOR BREAKFAST AND A PRESENTATION ON FAITH-BASED INVESTING
Do you know the practical implications of owning an index fund? Did you know that you actually own a portion of each of those businesses? What does that mean? Are any of those companies engaged in activities that contradict your values?
Join Logan, Wednesday, January 24th, from 8:00 to 9:30AM at align.Space (2 W Market St., West Chester, PA, 19382), as he discusses business ownership, personal values, and how to set up a portfolio in which your personal investment money is more closely aligned with your values and not against them.
AND SPEAKING OF LOGAN: I am very excited to tell you that on New Year's Eve, Logan's wife delivered a new baby girl into the world. Welcome to the family Josefine Lynne MacGray!
Have a great week!
Our mission is to help you 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
"What embitters the world is not excess of criticism, but an absence of self-criticism." G.K. Chesterton
"Do not let any unwholesome talk come out of your mouths, but only what is helpful for building others up according to their needs, that it may benefit those who listen." Ephesians 4:29
SOURCES:
STRONG JOBS REPORT: https://www.bls.gov/news.release/empsit.nr0.htm
TECH STOCKS STUMBLE OUT OF THE GATE: https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-01-05-2023-11cecd20?mod=stocks_news_article_pos5
STRONG MOTOR VEHICLE SALES: https://www.wsj.com/business/autos/u-s-auto-sales-bounced-back-in-2023-ecd389dd?page=1 AND https://www.msn.com/en-us/money/companies/ford-reports-71-increase-in-us-new-vehicle-sales-as-industry-marks-best-year-since-2019/ar-AA1msMha
AVOIDING THE RED SEA: gritcap.io
WHERE IS U.S. MANIUFACTURING GOING?: https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/december/ AND https://www.msn.com/en-us/money/markets/us-manufacturing-sector-eyes-recovery-in-december-ism/ar-AA1mpBjc
*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.