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March 31, 2024
THE FOURTH QUARTER WAS BETTER THAN FIRST REPORTED: According to the U.S. Bureau of Economic Analysis (BEA), the U.S. economy, as measured by its Gross Domestic Product (GDP), grew by 4.9% in the fourth quarter of 2023. Earlier, the BEA had reported that the quarter saw 3.2% growth. This surprising revision fueled additional optimism among U.S. investors.
RISING AGAIN: The S&P 500 rose once again to close out that index's best quarter since 2019. For the 22nd time this year, the S&P 500 hit a new record high. Stocks of large U.S companies have rallied due to a surprisingly resilient economy, artificial intelligence exuberance, and the potential for interest rate cuts.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
ECONOMISTS GETTING MORE OPTIMISTIC: I am always reluctant to highlight predictions about the economy, but they can be helpful as long as you take them with a grain of salt. There are too many variables to have any sense of certainty. Having said that, the Wall Street Journal consistently surveys a large group of economists. According to that most recent survey, the probability of a recession within the next year has decreased from 48% (in the October survey) to 39%. But, the overall prediction for the growth in the economy is 1%, not exactly robust growth.
OPTIMISM BY GENERATION: At Stonecrop, we have only two generations. We have a Baby Boomer and a bunch of millennials. We are in the process of hiring two new people, so maybe we will increase our generational diversity. So how does the generation you are in affect your optimism about the economy. Evidently, the older you are, the more optimistic you are. Only 48% of Boomers anticipate a recession in 2024. 62% of Gen Z believe a recession will occur in 2024. Millennials come in at 59%, and Gen X is at 53%.
MORTGAGE APPLICATIONS DECLINE: The amount of Americans who applied for mortgages declined last week by 0.7% compared to the prior week. Such applications are down 16% from the same time last year.
CHIVE TALKING: My wife took on a project. She decided to go into our spice drawers, take all the spices out, and organize all the spices into a rack on the back of a door in the kitchen area. She pulled all the spices out and alphabetized. On the right, you can see ten jars of chives! I think organizing the spices was a good idea.
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
"The truth is like a lion; you don't have to defend it. Let it loose; it will defend itself." Saint Augustine
"[T]he trust will set you free." John 8:32 (NIV)
SOURCES:
THE FOURTH QUARTER WAS BETTER THAN FIRST REPORTED: https://www.bea.gov/news/2024/gross-domestic-product-fourth-quarter-and-year-2023-third-estimate-gdp-industry-and
MORTGAGE APPLICATIONS DECLINE: https://www.mba.org/news-and-research/newsroom
ECONOMISTS GETTING MORE OPTIMISTIC: https://www.wsj.com/economy/it-wont-be-a-recession-it-will-just-feel-like-one-1919267a
OPTIMISM BY GENERATION: https://gritcap.io/p/sbf-sentence-showdown-looms-2907
(c) 2024 A.D., 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.