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| A QUIET WEEK CONTINUES THE BROAD RALLY: After tech stocks dominated for the better part of the year, the stock market rally has been broadening across the entire spectrum of the market. Investors have clearly warmed up to the idea that the Fed and other central banks have tamed inflation without an inevitable recession. Regional banks have roared back. Top gainers this week included a drug maker, an equipment designer and an online bazaar. Next week will be interesting as some of the tech giants are scheduled to report their second quarter earnings and guidance for the future. |
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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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| ECONOMIC GROWTH PREDICTIONS LOOKING HEALTHY: This Thursday, the official word on growth of the U.S. Gross Domestic Product (GDP) is set to be released. Last week, the Bank of America predicted the number will come in at 1.6% growth (a slight increase from its earlier predictions). Goldman Sachs predicted 2.5% growth. The Atlanta Fed predicted 2.4%. A broader survey of predictions comes in at 1.8%. We’ll see. |
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| U.S. RETAIL SPENDING RISES AGAIN: For the third month in a row, U.S. retail spending increased in June, this time by 0.2%. Consumer prices rose by the same amount, so consumers are keeping up with inflation, but not outpacing it. |
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| HEALTHY MORTGAGE MARKET: A “serious” mortgage delinquency is defined as 90 days or more late on a mortgage payment. The amount of serious delinquencies in the U.S. right now is at its lowest point since August 2006. As anyone who has been in financial distress knows, mortgage payments take top priority. Because virtually anyone who wants a job right now has one, or two if they need it, those mortgage liabilities are getting paid. |
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| …BUT LEADING ECONOMIC INDICATORS STILL LOOK UNHEALTHY: The Conference Board’s Leading Economic Index (LEI) continues to point to recession. For the 15th month in a row, the LEI fell. The reasons behind the fall this past month were falling consumer expectations, less new orders, rising jobless claims, and a slowdown in housing construction. |
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| A CHANGE IN RETIREMENT INVESTMENT RULES: Retirement savers who are over 50 are allowed to put more into their 401(k) accounts. Such individuals are allowed to make catch up contributions to their 401(k)s each year. This year the catch up amount is $7,500, providing a total of $30,000 in tax deductible savings opportunity. Beginning in 2024, if you earned more than $145,000 in the prior year, you will no longer be allowed to take advantage of the catch up rule. You will still be able to put money in your retirement account, but it will have to go into the after-tax Roth account. This change does not affect IRAs which allow a $1,000 catch up contribution over and above the $6,500 annual limit. Some large U.S. companies have asked for a two year delay to this new rule because of logistical challenges. |
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| NOT ENOUGH HOMES TO SELL: Sales of existing homes in the U.S. decreased in June by 3.3% from May. When compared to June of a year ago, sales were down by 18.9%. Below is a graph of the ever shrinking number of existing homes that are available for sale. |
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| BIRD WATCHERS: Help me out. This little creature walked through my yard the other day. I never saw him fly, and I had to go, so I didn’t see where he headed. But I don’t know if I’ve seen this one before. |
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| TETRIS: We are headed to the Outer Banks! As usual, I am tasked with the role of fitting it all in. This was early in the process. I never fail. |
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Our mission is to help you 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
dmacgray@stonecropadvisors.com |
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“Frustration always results from a discrepancy between your expectations and reality.” David Burns
“Where there is no vision, the people perish.” Proverbs 29:18 |
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SOURCES:
ECONOMIC GROWTH PREDICTIONS LOOKING HEALTHY: https://www.calculatedriskblog.com/2023/07/q2-gdp-tracking-around-2_01946021238.html
HEALTHY MORTGAGE MARKET: https://www.blackknightinc.com/press-releases/
NOT ENOUGH HOMES TO SELL: https://www.nar.realtor/newsroom/existing-home-sales-retreated-3-3-in-june-monthly-median-sales-price-reached-second-highest-amount
…BUT LEADING ECONOMIC INDICATORS STILL LOOK UNHEALTHY: https://gritcapital.substack.com/p/happy-opex-day
A CHANGE IN RETIREMENT INVESTMENT RULES: https://www.wsj.com/articles/retirement-tax-breaks-401k-contributions-2868ffdc
U.S. RETAIL SPENDING RISES AGAIN: https://www.wsj.com/articles/us-economy-retail-sales-june-2023-ac582986?mod=economy_more_pos6 |
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| (c) 2023 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved |
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*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. |
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Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.
SDG
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