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  • Writer's pictureDoug MacGray

Swooshed, Steady Rates, and Monkey Noises

July 1, 2024


FED'S PREFERRED INFLATION GAUGE DECREASES:  The Fed prefers to watch the PCE (Personal Consumption Expenditures) Price Index. In May, the PCE Price Index was unchanged from the prior month, and up 2.6% from a year ago. The prior year-over-year figure from last month was 2.7%. The so-called "core" PCE Price Index (removes food and energy) was up 2.6% from a year ago, down from 2.8%. 


STOCK MARKET GETS SWOOSHED: I still remember my first pair of Nikes. They were orange suede, low top basketball sneakers. I loved them. I have not worn a Nike trademarked shoe in quite a while. This week, Nike reported an unexpected sales decline and issued a negative future outlook. On Friday, the stock price tumbled, a lot (see below). This caused the overall U.S. stock market to limp to the end of the first half. Despite the struggle, the S&P 500, and other indices, closed the first half of the year very close to their all time highs. The latest inflation data (see above) helped push markets higher.



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



ACROSS THE POND ELECTIONS:  France and the U.K. have elections coming up this week. The first round of parliamentary elections are being held in France today, Sunday June 30 with the National Rally party expected to make substantial gains to the detriment of current President Macron. In the U.K., a general election will be held this week, with the Labor Party expected to win.


WE DON'T MANAGE THESE ENDOWMENTS:  We manage a variety of endowment funds and other investment portfolios for various nonprofit organizations, including those in higher education. Our niche is the "small endowment" market, of between $1 million to $50 million. The largest university endowments in the country are not part of our target market:


Harvard $49 Billion


U. Texas System $44 Billion


Yale $41 Billion


Stanford $36 Billion


Princeton $34 Billion


MIT $23 Billion


UPenn $21 Billion


Texas A&M $19 Billion


Michigan $18 Billion


U. California $18 Billion


HOME MARKET COOLING OFF:  Two years ago, the average home in the U.S. was selling for 2% above the asking price. Last year, on average, homes sold at asking price. During the four weeks that ended on June 23, the average U.S. home sold for 0.3% less than asking price. Current home prices are up 6.3% from a year ago, and up 47% since early 2020.


HOLDING RATES STEADY:  Along with the U.S. Federal Reserve Bank, central banks in Turkey, the Philippines and Sweden all held their interest rates steady this past week.


GETTING BETTER!:  Earlier in the year, I reported that I had suffered an injury that was keeping me from running. A strained hip flexor slowed me down quite a bit. I was getting some physical therapy, and it is finally paying off. It takes time, persistence, and patience (just like saving and investing!). I was fearful of pushing the pace for the longest time because that is when the injury would manifest itself. I didn't want to injure myself again. I am happy to report that I am running pain-free, and have been for about six weeks. I am now feeling good about pushing the pace. I'm still slow, but getting better every week. I am finally putting some mileage on these (not Nike) shoes.



...AND FINALLY:  I had my granddaughter MacKenzie all to myself for a bit this week. She liked it when I made monkey noises.



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

Direct | Cell | Fax

(610) 628 4545


"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness...." Declaration of Independence


"[W]arn those who are idle, encourage the timid, help the weak, be patient with everyone." I Thessalonians 5:14 (NIV)


SOURCES:

HOME MARKET COOLNING OFF: https://gritcap.io/p/gloves-off

WE DON'T MANAGE THESE ENDOWMENTS: https://gritcap.io/p/big-banks-fail-test


(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.

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