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| STOCKS END SLIGHTLY LOWER: After gains from a week prior, this week U.S. stocks were a bit choppy, and the S&P 500 ended slightly lower. After some premature euphoria and optimism that the Fed will begin to back off from their aggressive rate raising activities, such hopes faded a bit. Central bank officials are sending different signals regarding where they go at this point, but the most vocal last week made it clear that more rate raising will be necessary despite the recent signs that inflation may be trending in the right direction. Other data suggesting that the U.S. economy is still doing well worried investors because as long as inflation is high, and economic activity is robust, the Fed will feel freer to be aggressive. |
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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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| GOOD MONTH FOR BONDS: The Bloomberg U.S. Aggregate Bond Index has bounced a bit in the last month, up 3.71% since October 20. |
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| LABOR MARKET CONTINUES TO SHOW SIGNS OF STRENGTH: Last week, 222,000 claims were made in the U.S. for initial unemployment claims. This was a decrease from the prior week. This is a very healthy range for the labor market. All those tech layoffs do not seem to be showing up in the data, at least not yet. Last week, Amazon announced that it is preparing to layoff about 10,000 workers. Meta (Facebook’s parent company) announced it would be laying off more than 11,000. |
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| EXISTING HOME SALES PLUMMET: While many aspects of the economy are remaining resilient from the Fed’s rate raising, one area that they have successfully slowed down is sales of existing homes. Sales of existing homes in the U.S. fell 5.9% in October from the prior month, the ninth straight month of declines. October was 28.4% lower than one year ago. |
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| …AND LOTS OF NEW HOMES ARE ON THE WAY: There are currently 794,000 single family homes under construction in the U.S. This number has come down a bit from its peak (by 36,000). There are currently 928,000 multi-family housing units under construction. The combined figure of 1.722 million units under construction is the most ever. This will likely have the effect of keeping home prices from further increases, or even cause some downward pressure, and it will likely slow the rate of increases for rent costs. |
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| RETAIL SALES REMAIN ROBUST: In October, retail sales increased by 1.3% from the month before. October sales were 8.3% higher than a year ago. While some of this reflects increased money spent on goods that cost more, sales also increased for discretionary spending items such as cars, furniture and restaurant meals. Some of the increased spending comes from the purchase of building materials and home furnishings in the aftermath of Hurricane Ian. |
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| CORPORATIONS ARE SPENDING LOTS OF MONEY TOO: In the third quarter of this year, capital spending by S&P 500 companies was about 20% higher than a year earlier, and about the same as the first two quarters. This is a positive sign for investors as corporations are comfortable spending money rather than hoarding cash. |
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| HOTEL OCCUPANCY IS ON THE RISE: Of late hotel occupancy has been hovering in the same range as the 2000-2020 median, and now it is getting close to 2019 rates. This past week, hotel occupancy was actually 0.9% higher than the same week in 2019. Occupancy is up to 65.9% and the revenue per available room climbed to $95.89. |
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| THE PHILLY HALF MARATHON: The last mile was tough, but I finished the Philadelphia Half Marathon on Saturday. After a long training run in the 70s the week before, we started this race in the high 20s. Brrr. My son Riley and I ran this one, his longest run ever. He of course beat me by a lot. |
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| WHOSE LINE….?: Our office building management decided to hold an event featuring an improv group. At one point, my son Logan was volunteered to participate. He has quite the stage presence. (He’s on the far left.) |
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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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| “The things that we love tell us what we are.” Thomas Aquinas
“Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.” Luke 6:38 (ESV) |
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SOURCES:
HOTEL OCCUPANCY IS ON THE RISE: costar.com/article/1307040782/str-us-hotel-metrics-improve-week-to-week-and-outpace-2019
EXISTING HOME SALES PLUMMET: nar.realtor/newsroom/existing-home-sales-slumped-5-9-in-october
…AND LOTS OF NEW HOMES ARE ON THE WAY: calculatedrisk.substack.com/p/october-housing-starts-record-number
LABOR MARKET CONTINUES TO SHOW SIGNS OF STRENGTH: dol.gov/ui/data.pdf AND wsj.com/articles/jobless-claims-fall-slightly-in-tight-labor-market
RETAIL SALES REMAIN ROBUST: wsj.com/articles/us-economy-retail-sales-october-2022
CORPORATIONS ARE SPENDING LOTS OF MONEY TOO: wsj.com/articles/companies-from-google-to-pepsi-are-boosting-capital-spending AND wsj.com/articles/companies-are-still-boosting-capital-spending-despite-higher-rates |
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| (c) 2022 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 Barclays 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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