Stocks and Bonds Rallying, Slow Predicted Growth, and LeBeau

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November 27, 2022

ECONOMIC GROWTH IN 2023: Many are trying to determine what the economic landscape will look like in 2023. Many predict a recession of some sort. The International Monetary Fund just updated its predictions. It predicts that the global economy will grow by 2.7% in 2023, down from 3.2% this year and 6% in 2021. It predicts the U.S. economy will grow by 1%. Meanwhile, the OECD is predicting that U.S. growth in 2023 will be 0.5% while global growth advances at the rate of 2.2%.

STOCKS CONTINUE TO RISE IN HOLIDAY-SHORTENED TRADING WEEK: During the Thanksgiving week, the S&P 500 registered a positive week, something we have now seen in four of the last six weeks. Stocks have now been in a general rally since the beginning of October. The holidays tend to be a positive one for equities and the markets have been responding positively to the last two monthly inflation reports. Whether the market keeps rising will hinge a lot on the next inflation report on December 13, and the ensuing Fed meeting on December 13 and 14.

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

BONDS RALLYING: We will see what happens after the next inflation report and Fed meeting, but for now, bonds are bouncing off their most recent low (October 20).

HOUSEHOLD MORTGAGE DEBT: During the Great Recession caused by the housing bubble, mortgage debt as a percentage of the U.S. GDP hit a peak of 73.3%. It spiked during the COVID-related government shut downs when GDP declined sharply. but it has now come back down to 48.9%.

SALES OF NEW HOMES: Last week, we reported that sales of existing homes in the U.S. is plummeting, down 5.89% last month compared to September, and down 28.4% from the year earlier. New home sales are doing much better. Sales of new homes in October were 7.5% better than September. This is still 5.8% lower than a year ago.

CHINESE GOVERNMENT TRYING TO BOOST ECONOMIC ACTIVITY: China’s central banking authority decreased the amount of money Chinese banks need to keep in reserve. This increases the amount of money available to lend to households and businesses. The desired result is increased economic activity. China has been struggling with the negative results from repeated lockdowns, a continuing and long-expected real-estate crunch and slowing demand for Chinese exports. Meanwhile, protests are erupting all over China in defiance of the government’s snap lockdowns and other strict COVID restrictions.

GET MARRIED?: It seems that making that legal, public commitment to another in marriage might be good for your financial well-being. According to data from the Federal Reserve Bank of St. Louis, the median combined net worth of couples aged 25-34 and living together in 2019, but not married, was $17,372. The net worth for married couples of the same age was $68,210.

A-5714: For a time, a young man, with a talent for singing, was given this identity, and it was tattooed on his arm. Said Robert Clary, a Polish-born Jew who survived his time in the camps, “I was one of the lucky ones….First of all, because I survived. Secondly, because I was in camps that were not as atrocious as others. I did not suffer. I did not work as hard as people were working in salt mines on quarries. I was never tortured. I was never really beaten. I was never hanged. But I saw all these things.” In 1980, alarmed by people trying to deny the Holocaust, he ended his self-imposed silence on the subject and he ultimately wrote, “From Holocaust to Hogan’s Heroes,” his memoir of those times. I am thankful that he survived, and that he eventually spoke out about the atrocities he witnessed. Robert Clary passed away this month at the age of 96.

THANKFUL: We traveled north to New England to visit family this Thanksgiving. I am thankful for that family, and for the joy we had in being together. As with many people who have New England roots, our family traces lineage back to the Mayflower, specifically to both William Bradford and William Brewster. This does not make us unique. The Mayflower had 102 passengers and about 30 crew. Some died before reaching the shore (including Williams Bradford’s wife who fell off the ship and drowned, mysteriously). 45 failed to survive the first winter. Only 37 are known to have descendants. Currently, most estimates put the amount of descendants at over 30 million!

“All great and honorable actions are accompanied with great difficulties, and both must be enterprised and overcome with answerable courage.” William Bradford

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. ®
Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax
(610) 628 4545

“Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.” Epicurus”

“Give thanks in all circumstances.” I Thessalonians 5:18


(c) 2022 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 Barclays 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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