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March 3, 2024
REPEAT: Similar to last week's update, Nvidia and the S&P both rose to new highs, leading the S&P 500 to its 16th weekly rise out of the last 18 weeks. February ended positive, the fourth such positive monthly gain in a row. Once again, tech stocks led the way. Companies like Nvidia, Intel, and Advanced Micro Devices had strong gains last week. Nvidia's market capitalization is now over $2 trillion. It was $1 trillion about a half a year ago. Oil prices increased leading to rising prices for energy stocks. Investors remain worried that relatively strong U.S. economic data will delay the Fed lowering rates, but it is not keeping investors from buying stocks at higher and higher prices.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
THE MAGNIFICENT SEVEN: By now, if you are paying attention to the U.S. stock market, you have heard the term, "The Magnificent Seven." I'm sorry, but when I hear that term, I still think (fondly) of Yul Brynner, Steve McQueen, Charles Bronson, Robert Vaughn (even though he lost his nerve), James Coburn, Brad Dexter, and Horst Buchholz (Horst is the only one I did not have committed to memory and had to look up). But this is an investment and financial newsletter, so I guess I better refer to the current Magnificent Seven, or the stocks that have led this rising market for so long. The graphic below by Goldman Sachs is an incredible illustration as to just how much these seven stocks have led the overall markets. The seven are Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla. How long will this run continue?
U.S. MANUFACTURING IS DECREASING: According to the Institute for Supply Management (ISM®), the manufacturing sector in the U.S. decreased in February. This was the sixteenth straight month of contraction according to ISM®.
U.S. CONSTRUCTION SPENDING REMAINS STRONG: In January, construction spending in the U.S. decreased by 0.2% from the prior month, but was 11.7% higher than January of 2023.
EUROZONE INFLATION COOLS: In February, inflation in the eurozone countries fell to an annual rate of 2.6%, down from 2.8% a month ago. Falling energy prices have helped of late, but in February, the annual inflation number for food, alcohol and tobacco came in at 4.0%. This number was 5.6% one month ago. The unemployment rate is 6.4%.
THE REST OF THE WORLD IS NOT KEEPING UP WITH THE U.S.: We have been documenting China's economic woes. The U.K. economy shrank for the second quarter in a row last quarter. Both Japan and Germany registered negative growth in the fourth quarter. The U.S. is not the norm right now as its resilient economy keep growing..
ARE YOU IN THE TOP 1%?: If you want to be in the top 1% in the U.S., you need to have a net worth of $5.8 million or more. If you live in China, $1 million will do it. In Japan, it's $2 million. If you lived in Monaco, you would need $12.8 million to be in the top 1%.
NEW ROOM, NEW RITUAL, NEW FRIEND: My wife and I recently had a new sunroom added to the back of our house. I wake up slowly, and my new ritual is to get up, get coffee, and go out to my new sunroom to read and watch the sun rise. In so doing, I discovered a new friend. I have seen this guy in our neighborhood, but did not know he came into our yard. I think we are going to get to know one another.
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
“When I started out, I struggled, and I was broke a lot. But I’m glad I struggled, and I’m glad I was broke a lot.” Richard Lewis (1947-2024)
"The plans of the diligent lead to profit as surely as haste leads to poverty." Proverbs 21:5
SOURCES:
U.S. CONSTRUCTION SPENDING REMAINS STRONG: https://www.census.gov/construction/c30/current/index.html
U.S. MANUFACTURING IS DECREASING: https://www.calculatedriskblog.com/2024/03/ism-manufacturing-index-decreased-to.html AND https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/february/
EUROZONE INFLATION COOLS: https://www.wsj.com/economy/global/eurozone-inflation-cools-in-february-keeping-rate-cuts-on-agenda-b47ca5fb?mod=economy_lead_pos1
ARE YOU IN THE TOP 1%?:ARE YOU IN THE TOP 1%?: https://www.marketwatch.com/story/want-to-join-the-top-1-crowd-heres-how-much-money-youll-need-to-be-part-of-the-elite-1-b5b08a6c?mod=home-page
THE REST OF THE WORLD IS NOT KEEPING UP WITH THE U.S.: https://www.wsj.com/economy/global/u-k-enters-recession-after-economy-shrinks-more-than-expected-30407624?mod=economy_feat1_global_pos5
(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.