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January 21, 2024
U.S. STOCKS UP AGAIN: U.S. tech stocks did it again and led the S&P 500 to a new high. The S&P 500 had gone more than 500 trading days without hitting a new record. That streak was broken this past week. Semiconductor stocks led the way as Taiwan Semiconductor, Nvidia, Advanced Micro Devices and Broadcom all soared. It all started when Taiwan Semiconductor released a strong earnings report. This rally broadened to the tech sector generally. Several banks released earnings reports, and these showed steep declines in quarterly earnings, but they were not as bad as investors thought, and stocks of several regional banks rose for the week. Finally, Travelers' shares rose nearly 7% after releasing its report showing higher revenue and profits.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
HOUSING MARKET FREEZING UP: Sales of existing homes fell by 1.0% in December and were down 6.2% from December of the prior year. The median price of a home in December was 4.4% higher than a year earlier, up to $389,000. For the entire year of 2023, sales of existing homes were lower than any year since 1995. Homeowners locked in low rates during and prior to the pandemic, and they are now disinclined to sell and lose that low mortgage rate in return for a 6.6% rate.
THE FICKLE, HAPPY CONSUMER: Just lower gas prices and increase stock prices and pessimistic consumers turn optimistic. The University of Michigan maintains a survey of consumer sentiment. In the past two months, consumer sentiment, as measured by this survey, increased 29%. With a solid labor market, lowering inflation, the prospect of lower interest rates, and receding recession sentiment, consumers are feeling much better at the moment. The rise has been broad, cutting across consumers of all ages, incomes, educations, and geography.
RETAIL SALES UP IN DECEMBER: In December, retail sales were up 0.6% from the prior month. More importantly, retail sales in December were 5.6% higher than the year before.
INDUSTRIAL PRODUCTION INCHES UP: Overall industrial production in the U.S. rose 0.1% in December. Overall, industrial production decreased by 3.1% for the fourth quarter of 2023.
TEXAS LEADING IN NEW, BIG MANUFACTURING PROJECTS: According to Goldman Sachs, the U.S. is seeing a bit of a surge in large (over $1 billion) manufacturing projects in the U.S. Goldman Sachs is tracking such projects that have actually broken ground between 2021-2023, and Texas leads the way by far at about $40 billion. Arizona with big semiconductor projects came in second at about $21 billion, followed closely by Louisiana ($20 billion), then at about $15 billion, Ohio and Idaho. Next comes New York at about $13 billion, followed by Georgia at about $11 billion. Rounding out the top ten are California ($6 billion), Kentucky ($4 billion), and North Carolina ($2.5 billion). The Mid-Atlantic and New England states did not register in the top 21 states reported by Goldman Sachs.
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.
A CONVERSATION AT THE CONFERENCE: Stonecrop's Investment Director (and my son), Logan, and I traveled down to Virginia Beach last week to attend a conference on Faith-Directed and Impact Investing, just in time to give Logan some last-minute inspiration for his presentation this coming week (see above). One of the speakers was Bob Doll, Chief Investment Officer of Crossmark Global Investments. Bob talked about his thoughts about how this year will play out in the economy and the markets. We know Bob, and assumed he might come and chat with us when he was finished, which he did. Before he approached us, Logan asked me, "Is it okay if I tell him I disagreed with most of what he just said?" I said, "sure." Then I just stepped back and observed. I must admit, listening to these two Chartered Financial Analysts (CFAs) go at it was a little hard to follow, but heartily enjoyable. It was also nice to see two people disagree with grace and open minds, and yet tenacity in their positions.
AN ABUNDANCE OF RICHES: Congratulations to Dalton Greiner of Stonecrop Wealth Advisors. Over the weekend, he and his wife welcomed Elisabeth Rose into the world!
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
"I can't help but wonder how much of the problems that plague our nation -- our cynicism, antagonism, and suspicions -- are being exacerbated by our isolation. But one of the wonderful things about the problems of isolation and loneliness is that small steps can make big differences. And they are within our reach. We can help others share joys and sorrows just by writing a letter, placing a call, or inviting someone out for a cup of coffee. We can ask people how they are doing and actually listen to the answer. We can put down our phones and speak face to face, with the kind of forthrightness that demands being present. We can relish all those in our inner and outer circles who make our lives more fulfilling." Elliot Kirschner, Through the Fog
"Therefore, encourage one another and build each other up, just as in fact you are doing."' I Thessalonians 5:11 (NIV)
SOURCES:
U.S. STOCKS UP AGAIN: https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-01-19-2024-1480a097
THE FICKLE, HAPPY CONSUMER: https://www.msn.com/en-us/money/markets/consumer-sentiment-surges-while-inflation-outlook-dips-university-of-michigan-survey-shows/ar-BB1gX2Jo AND https://www.wsj.com/economy/consumers/americans-are-finally-feeling-better-about-the-economy-e964804f
HOUSING MARKET FREEZING UP: https://www.nar.realtor/newsroom/existing-home-sales-slid-1-0-in-december
TEXAS LEADING IN NEW, BIG MANUFACTURING PROJECTS: gs.com
INDUSTRIAL PRODUCTION INCHES UP: https://www.federalreserve.gov/releases/g17/Current/default.htm
RETAIL SALES UP IN DECEMBER: https://www.census.gov/retail/sales.html
*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.