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Writer's pictureDoug MacGray
Oct 205 min read

Stocks, Uranium, and BDawk

October 20, 2024


SOLID WEEK:  The U.S. stock market had another solid week with the S&P 500 hitting another record high. Small stocks also did quite well with the Russell 2000 hitting a two-year high last week, and rising 1.87% in total, a full percentage point more than the S&P 500. For much of the past year or two, leaders in the artificial intelligence industry have led the markets. We are now beginning to see that go downstream. Companies that can benefit from AI are now showing strength. We have reported on how the energy industry is benefiting from the electricity demand required by AI (e.g., see below). Last week, Taiwan Semiconductor Manufacturing spiked and helped the overall markets because of strong earnings and guidance led by AI chip demand. Other chipmaker stocks also rose.



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



RETAIL SALES PICK UP:  Retail sales were up by 0.4% in September compared to the month before. Sales were up 1.7% compared to one year ago.  


U.S. INDUSTRIAL PRODUCTION:  Industrial production in the U.S. (mining, utilities, and manufacturing) decreased 0.3% in September after advancing 0.3% in August. The Boeing strike had an effect. The two hurricanes did not help. In the third quarter of 2024, industrial production declined at an annual rate of 0.6%.



A NUCLEAR ENERGY RACE:  Last month, we reported to you that Microsoft had entered into an exclusive arrangement with Constellation Energy to start up a nuclear reactor at Three Mile Island and take all the electricity for itself to help power its growing energy (A.I.) needs. Last week, we saw Google getting in on the nuclear energy act. It is backing the construction of seven new nuclear power reactors in the U.S. to help power the company's growing need for electricity to power AI. Google is committing to buying power generated by all seven reactors to be built by Kairos Power, a nuclear energy start up company. The World Uranium Index has risen 44% since September 4.



MEDICARE OPEN ENROLLMENT:  If you are 65 or older (or you are helping a loved one who is 65 or older), it is Medicare open enrollment time. Between now and December 7, you can review your coverage and make changes that would go into effect on January 1. You can go to Medicare.gov, or to your own Medicare account and review your current summary and do some comparisons. If you'd prefer to speak with a professional, we can help find you someone to talk to.


CHINA'S RATE OF GROWTH SLOWING:  China's economy is still growing, but its rate of growth is not meeting the Chinese government's 5% targets. In the third quarter, the annualized rate of growth was 4.6%. In the quarter before, that number was 4.7%. After being quiet for quite a while, the Chinese government has begun to unleash a barrage of stimulus measures including interest rate cuts and steps to bail out municipalities on the brink of financial default. The stimulus announcements have not been crystal clear, and the ambiguity has created mixed results in the investing markets.


AVERAGE RETURN ON INVESTMENT FROM COLLEGE DEGREES:  If you have children considering college and a course of study, you might find this interesting. College NPV did an analysis of data from the U.S. Department of Education Bureau of Labor Statistics, and came up with the average returns on investment for the various degrees in the U.S. Not surprisingly, engineering topped the list with a $570,616 return on investment. Rounding out the top five were Computer and Information Sciences ($477,229), Mathematics ($340,875), Engineering Technicians ($311,141), and Business ($205,191). In the middle of the pack, just above break even were Philosophy ($6,011) and History ($4,938). In the bottom five were Family and Human Sciences (-$24,540), Communications (-$28,911), English ($-$39,057) Theology (-$91,749), and Visual and Performing Arts (-$104,015).


A RACE TO THE BOTTOM:  Gallup just released new poll results on the question of, "In general, how much trust and confidence do you have in the mass media . . . when it comes to reporting the news fully, accurately, and fairly?" 39% said none at all and 29% said not very much, or a total of 67% on the negative side. That officially puts them one percentage point worse than "the legislative branch, consisting of the U.S. Senate and the House of Representatives." Their negative score was 66%, and of that 44% was "not very much." It seems the mass media has somehow figured out a way to be less trusted than the U.S. Congress. This is very bad for the country, and hopefully this is the bottoming out.


"SMALL BUSINESS IS THE BACKBONE OF THE ECONOMY":  You have seen or heard this statement in the past. It is one of the least controversial statements that politicians communicate every election cycle. Both presidential candidates, for example, are talking about how their approach will benefit small business. I happen to own a small business, so I pay close attention to anything that affects that part of the economy. I was talking to a client this past week who owns a small business. His business has entered into some recent transactions that are typical for an entrepreneur small business. But what is also typical is that he is taking a risk. He had to spend a lot of cash, take on some credit, and increase his monthly costs. He says things are getting better, but it has been difficult to have enough in his bank account every two weeks to pay everyone. I am blessed to run a business with stable cash flow and good cash reserves, but I was not always so lucky. I remember running a business when I was in my 30s. One Friday, I was sitting in my office after hours with another small business owner who was about ten years my elder. I was fretting about getting the cash together to meet payroll, and he said something I have never forgotten. "No one knows what it is like to run a small business until they have to sweat payroll." Remember this with any friends of yours who run a small business that provide jobs. Payroll can be a big scary monster when your biggest customer is late in paying their invoice, or when new orders slow down. My client said, "it's all I can think about right now." It is this stress that energizes the activities of so many risk-taking, productive, business owners to our collective benefit.


BDAWK:  Last week was the annual Delaware Leadership Prayer Breakfast. I am on the steering committee. This year's speaker was Brian Dawkins! The Steering Committee meets with the speaker before the event. It was kind of cool to start my day on Thursday with a bro hug with BDawk! (I felt a bit like a fraud because, you know, I'm a Pats fan.) In the picture below you can see him delivering some powerful and passionate words with Senator Carper and Governor Carney on the dais. If you ever get a chance to hear him speak, go!



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


"Talent sets the floor, character sets the ceiling."  Bill Belichick


"Do nothing from selfish ambition or conceit, but in humility count others more significant than yourselves." Philippians 2:3 (ESV)


SOURCES:


(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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