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Volatility, Rising Markets, AI Construction, and Number Seven!

  • Writer: Doug MacGray
    Doug MacGray
  • 13 hours ago
  • 4 min read

October 19, 2025


THE SHUTDOWN PART THREE: It is week three, and little sign of a deal. Both sides are blaming the other trying to score political points, but markets do not seem to be affected so far.


VOLATILE AND POSITIVE WEEK: Volatility is the word for the week. Yes, stocks ended the week strongly positive, but volatility was the price to get there. There are lots of worries on investors' minds, which generate negative trades on some days. And then there are other days where positive news drives trades in the other direction. Tariff talk, especially between the U.S. and China, drove a lot of the worry trade in the past couple of weeks. When President Trump backed off the verbal pressure on China, it helped buoy markets. When a regional banking report showed some weakness in that sector, markets sank. When large banks reported unexpectedly high earnings, and when Fifth Third Bankcorp and Truist Financial reported solid quarterly earnings, markets soared. Of note, gold was up over 6% for the week, but Bitcoin was down over 5%.


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


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POWELL'S COMMENTS HELP MARKETS: Stocks were also helped by dovish comments by Fed Chair Powell this past week. His public speech on Wednesday cited labor market weakness and global risks as justifications for further easing. More investors are now betting on a quarter point rate cut at the end of the month, and another in December.


CHARITABLE DEDUCTION CHANGES IN 2026: Under the One Big Beautiful Bill, taxpayers who do not itemize may claim a charitable deduction of up to $1,000 for individuals and $2,000 for married couples beginning in 2026. However, for taxpayers who itemize, charitable contributions may only be deducted if they exceed 0.5% of their adjusted gross income. Should itemizers put a bunch of money into a Donor Advised Fund now so they can deduct 100% of the gift? Of course, that is an individual question for each taxpayer, but 2025 is running out of time. If there is a last minute rush to create or donate to donor advised funds, you may want to act now, or certainly by the end of November.


EMERGING MARKETS: According to Goldman Sachs, emerging markets stocks are expected to rally over the next twelve months because of positive earnings, demand for geographical diversification, and anticipated rate cuts from the U.S. Federal Reserve.


AI IS DRIVING THE CONSTRUCTION INDUSTRY: Since 2010, private construction outlays have risen by nearly 200%. In the past five years, some of the fastest sectors of growth have been semiconductor manufacturing plants, data centers, and energy facilities. AI and a broad reshoring push have been driving the recent growth. The CHIPS Act of 2022, which allocated $52 billion toward bringing semiconductor supply chains back to the U.S. has certainly helped, and even with the expiration of much of those incentives, the growth in that market continues to be elevated. In the past five years, private data center construction has risen by 419%. A decade ago it represented less than 2% of all nonresidential construction in the U.S. That has moved to over 20%.


GOVERNMENT DEBT BABY STEPS: The U.S. government deficit relative to the U.S. GDP was 6.3% in fiscal year 2024. In fiscal year 2025 it decreased to 6.0%.


NUMBER SEVEN!: Last Sunday, I completed my seventh marathon! This one was special. It was the Sparkasse Marathon, also called the "Three Country Marathon." It started in Lindau, Germany, wound along a path on Lake Constance into Bregenz, Austria and through other Austrian communities, into Switzerland, and then back into Austria, ending in a large sports arena in Bregenz. I had a cheering section (of three) to help me along the way. It was a very well organized marathon, and I was glad to be able to take part. I do not take for granted that I can still do this. I'll have more on the rest of the trip in next week's newsletter. I'm back home now.


Lindau, Germany, an island town on Lake Constance (aka "Bodensee").


Yours Truly


The route as tracked by my watch

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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.


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Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545



"Training for a marathon is much like climbing a ladder. Each rung is a short-term goal that must be met in sequence in order to reach the long-term goal at the top of the ladder." Richard Benyo


"And let us run with perseverance the race marked out for us." Hebrews 12:2 (NIV)


SOURCES:

CHARITABLE DEDUCTION CHANGES IN 2026: https://www.dafgiving360.org/tax-law-changes


(c) 2025 Anno Domini, Stonecrop Wealth Advisors, LLC, All Rights Reserved


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it is 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.

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