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December 1, 2024
STOCKS HAVE A GREAT MONTH: The short trading week ended on a high note, capping the best month of the year for the S&P 500 and the Russell 2000 (small cap U.S. stocks). Consistent with the recent pattern, the rally has been broad-based, but smaller companies have been outpacing large ones. The Russell 2000 was up about double that of the S&P 500. The first half of the year was dominated by megacap companies. Average stocks were not doing great. Since late summer, the rally has broadened.
LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.
INFLATION IS HANGING IN THERE: Inflation isn't done yet. The U.S. Bureau of Economic Analysis issued a report showing that the rate of personal consumption expenditures (the PCE Index) rose 0.4% in October. Over twelve months, this index has risen 2.3%, which is up from 2.1% in September. This is an index which the Fed watches very closely.
SALES OF NEW HOMES DOWN, BUT...: In October, sales of new homes decreased 17.3% from September. October was 9.4% below October of 2023. The south region, which includes the hurricane hit areas of Florida and the Carolinas, was down 27.7% while the rest of the country was up about 8% from a year ago.
SINGLE FAMILY HOMES AVAILABILITY: The inventory of single-family homes is up 27.1% from this time a year ago according to Altos Research. It is 17.5% lower than the same week in 2019. In June of 2023, inventory was 54% below 2019, so the gap has closed significantly in the past year.
PREDICTIONS: It is time for market analysts to make predictions, and for you to largely ignore them. Here is why. Last year at this time, BCA Research, global provider of macroeconomic and geopolitical research for investors, predicted that the 2024 stock market could experience its worst crash since 2008, falling more than 25% because of interest rates taking a bite out of economic activity and tipping the economy into a recession. Goldman Sachs was significantly more bullish, boldly predicting the S&P 500 would rise by 7%! Stifel predicted a 2% rise in the S&P 500. Goldman, who was only off by about 20% last year, now predicts that in 2025 the S&P 500 will rise by 10% in 2025.
A GROUP OF MAYFLOWER DESCENDANTS: If you search the internet, the most common estimate of descendants of Mayflower passengers is about thirty million. My family on my father's side traces its ancestry to Governor William Bradford, the leader of the Plymouth Plantation and one of the Mayflower passengers. So, the picture below of my family at Thanksgiving is a subset of that 30 million! From our family to yours, we hope you experienced joy this Thanksgiving.
I love that my granddaughter can spell my name!
Joy at Thanksgiving brought to you by beautiful children in my clan.
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.
Douglas R. MacGray, J.D., C.F.P. ®
President
Stonecrop Wealth Advisors, LLC
Direct | Cell | Fax
(610) 628 4545
"A thankful heart is not only the greatest virtue, but the parent of all the other virtues." Marcus Tullius Cicero
"Give thanks in all circumstances." I Thessalonians 5:18 (NIV)
SOURCES:
PREDICTIONS: https://www.businessinsider.com/stock-market-crash-sp500-prediction-recession-2024-us-economy-outlook-2023-11? AND https://www.goldmansachs.com/insights/articles/the-s-and-p-500-is-forecast-to-return-10-percent-in-2025?chl=em&plt=briefings&cid=1129&plc=body
INFLATION IS HANGING IN THERE: https://www.bea.gov/news/2024/personal-income-and-outlays-october-2024
SALES OF NEW HOMES DOWN, BUT...: https://calculatedrisk.substack.com/p/new-home-sales-decrease-sharply-to
SINGLE FAMILY HOMES AVAILABILITY: https://www.calculatedriskblog.com/2024/11/housing-nov-25th-weekly-update.html
(c) 2024 A.D., 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.
SDG
*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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