The Markets

Are we witnessing an historic event?

For an airplane or a spacecraft, a soft landing occurs when the vehicle “touches the ground in a controlled and gradual way that does not damage it,” according to The Britannica Dictionary.1

For the American economy, a soft landing happens when the Federal Reserve raises interest rates to cool the economy and push inflation lower—and achieves its goal without causing a recession and significantly higher unemployment. It’s not an easy task.2

“Historically, soft landings have been tough to pull off…Keeping unemployment and inflation low while at the same time having robust growth is difficult. Threading that needle has proven to be quite elusive,” reported a source cited by Aly J. Yale of The Wall Street Journal.²

Solid economic growth, low unemployment, rising wages, and falling inflation have one Federal Reserve official and several economists declaring that the American economy has achieved this rare event—a soft-landing, reported Bryan Mena of CNN.3

So, exactly how well is the U.S. doing?

“The extent to which America has outperformed other countries since the start of the COVID-19 pandemic is breathtaking. Its real GDP has expanded by more than 10 [percent], nearly three times as much as the euro area. Among the G20 group, which includes both rich countries and emerging markets, America is the only one where output is above pre-pandemic expectations, according to the International Monetary Fund,” reported Simon Rabinovitch of The Economist.4

Last week, “with an election and Federal Reserve meeting still to come, stocks faltered under the weight of the uncertainty,” reported Teresa Rivas of Barron’s.⁵ Major U.S. stock indices finished the week lower.⁶ Uncertainty about the direction of future government spending and its possible effect on Federal Reserve policy caused some turmoil in bond markets, too, reported Paul R. LaMonica of Barron’s.⁷ Yields on longer maturities of U.S. Treasuries moved higher over the week, while yields on shorter maturities moved lower.8

Data as of 11/1/24	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-1.4%	20.1%	35.2%	7.5%	13.3%	11.0%
Dow Jones Global ex-U.S. Index	-0.9	6.4	20.4	-1.5	3.2	2.6
10-year Treasury Note (yield only)	4.4	N/A	4.8	1.6	1.7	2.4
Gold (per ounce)	0.5	32.0	38.2	15.2	12.7	8.9
Bloomberg Commodity Index	-2.2	-0.6	-5.9	-1.8	4.1	-1.8

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

PERCEPTION VS. REALITY. The human brain is complex and powerful. It runs on about 20 watts of power and brains need to be recharged, just like your cell phone does, according to Northwestern Medicine.9

It’s interesting to note that brains are not objective. They catalogue our experiences, beliefs, and emotions and then interpret what’s happening around us. As a result, our reality on any given day is affected by “our personal physical abilities, energy levels, feelings, social identities, and more,” reported Jill Suttie in Greater Good Magazine.10

For example, studies have found that hills look steeper when people are:11

• Tired.
• Wearing backpacks.
• Thinking of people they dislike.

In contrast, hills look less steep when people feel energetic or think of a supportive friend.¹¹

An August survey from the National Federation of Independent Business, a small-business advocacy group, reinforced the idea that there is a gap between economic perception and economic reality. The survey found that small business owners were quite optimistic about the financial state of their businesses, reasonably optimistic about the state of their local economies, and pessimistic about the state of the U.S. economy.1²

	Excellent/ Good	Okay	Poor
The current financial state of my business is:	70 percent	25 percent	5 percent
The current state of my local economy is:	36 percent	44 percent	20 percent
The current state of the U.S. economy is:	10 percent	32 percent	58 percent

When survey participants were asked when the United States might experience another recession, 52 percent said the U.S. economy was in a recession right now. A recession is a downturn in economic activity that lasts for a significant period. Economic data show the U.S. economy, as measured by gross domestic product (the value of all goods and services produced in the U.S.), has been growing since late 2020.^12,13

The answers were interesting because most businesses—small and large—experience declines in sales and profitability when the national economy is doing poorly or in a recession.¹⁴ The gap in perception and reality may reflect the fact that“people are upbeat about what they see directly but pessimistic about what they glean indirectly through media (and social media),” opined Rabinovitch of The Economist.⁴         

Weekly Focus – Think About It

“A politician needs the ability to foretell what is going to happen tomorrow, next week, next month, and next year. And to have the ability afterwards to explain why it didn’t happen.”1⁵

—Winston Churchill, former British Prime Minister

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

[1] https://www.britannica.com/dictionary/soft-landing

2 https://www.wsj.com/buyside/personal-finance/banking/what-is-a-soft-landing (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_Buy%20Side%20from%20WSJ_2.pdf)

3 https://www.cnn.com/2024/10/30/economy/us-economy-gdp-q3/index.html

4https://view.e.economist.com/?qs=8c4d858fa9139d530b00b25ec40bdf65fe117f88d5729ea94d87cbf85c43f09e3c17bbd199ce5c4ec8cb2d3777e0fe59cddd9c37a482b43ccf58aee1f87c8be0cf0f07b2684ca669d23da9b81cfb7a85 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_The%20Economist_Money%20Talks_4.pdf)

5 https://www.barrons.com/articles/market-tricked-investors-election-day-bounce-7ea56c39?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_Barrons_The%20Market%20Tricked%20Investors_5.pdf)

⁶ https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_Barrons%20Data_6.pdf)

⁷ https://www.barrons.com/articles/bond-yields-jobs-report-treasury-6f6e602e?mod=md_bond_news (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_Barrons_Bond%20Yields%20Fell%20After%20Jobs%20Report_7.pdf)

8 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2024

9 https://www.nm.org/healthbeat/healthy-tips/11-fun-facts-about-your-brain

10 https://greatergood.berkeley.edu/article/item/eight_reasons_to_distrust_your_own_perceptions

11 https://www.sciencedirect.com/science/article/abs/pii/S002210310800070X#:~

¹² https://strgnfibcom.blob.core.windows.net/nfibcom/Banking-Survey-2023-Part-II.pdf [Questions 20-23]

[1]³ https://fred.stlouisfed.org/series/GDP#0 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-04-24_FRED%20Data_13.pdf)

[1]⁴ https://www.investopedia.com/articles/economics/08/recession-affecting-business.asp#:

¹⁵https://www.azquotes.com/quote/56321?ref=funny-political

The Markets

Financial markets appear to have pre-election jitters.

The United States election is less than two weeks away. The candidates are neck and neck. The outcome remains uncertain. And expectations for volatility have been rising, with the CBOE Volatility Index (VIX) finishing last week at 20.33.¹

“When the VIX goes north of 20, Wall Street pays attention because that level signals heightened volatility,” reported Connor Smith of Barron’s.²

So far, third-quarter earnings reports have been strong.³ Regardless,stock market investors became significantly less bullish last week, according to the AAII Investor Sentiment Survey. The survey asked investors whether they think the stock market will move higher (bullish) or lower (bearish) over the next six months.⁴

• Bullish sentiment declined from 45.5 percent the week of October 16 to 37.7 percent last week. (The historic average for bullishness is 37.5 percent.)⁴
• Bearish sentiment increased from 25.4 percent to 29.9 percent. (The historic average for bearishness is 31 percent).⁴
• Neutral sentiment also increased from 29.2 percent to 32.4 percent. (The historic average is 31.5 percent.)⁴

Bond investors also have been adjusting their expectations. Since mid-October, the yield on the benchmark 10-year U.S. Treasury note has trended higher. At the start of the month, the 10-year note yielded 3.74 percent. Last week, its yield rose from 4.07 percent to 4.23 percent.⁵

“The rise is likely a reflection of the fact the Federal Reserve will cut interest rates fewer times than investors had thought after September’s Federal Open Market Committee meeting, a result of inflation being above its target and a job market that has grown faster than expected. Also, Donald Trump’s chances of winning the presidential election have risen in the past few months, according to RealClearPolitics. His policies include fiscal spending and tariffs, both of which create inflation and throw cold water on the idea that the Fed will cut rates many times. While the economy could continue to grow, tariffs, for their part, not only lift prices, they destroy demand,” reported Jacob Sonenshine of Barron’s.⁶

Ben Levisohn of Barron’s offered some advice to anyone getting swept up in pre-election jitters. “The truth of the matter is that reading the financial market tea leaves is far from straightforward…In fact, investing with your politics is one of the worst ways to lose money—or miss out on gains.”⁷ If you have concerns about market volatility or the possible effect of the election on your portfolio, get in touch. We’re happy to talk with you about your concerns and your portfolio.

Last week, the S&P 500 Index and Dow Jones Industrial Average moved lower, while the Nasdaq notched a seventh week of gains.⁸ Yields on longer maturities of U.S. Treasuries moved higher over the week.⁹

Data as of 10/25/24	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	-1.0%	21.8%	38.7%	8.4%	14.0%	11.5%
Dow Jones Global ex-U.S. Index	-2.0	7.4	21.7	-1.2	3.7	2.8
10-year Treasury Note (yield only)	4.2	N/A	5.0	1.6	1.8	2.3
Gold (per ounce)	0.7	31.4	37.7	14.8	12.5	8.3
Bloomberg Commodity Index	2.0	1.6	-4.6	-1.8	4.8	-1.5

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

DO YOU TALK ABOUT MONEY? A lot of important events and holidays are coming up in November. There’s Election Day, National Calzone Day, No-Shave November, the International Day for Tolerance and Talk Money Day.10^,11

That’s right! On November 8, everyone is encouraged to put their fears aside and begin talking with other people—spouses, partners, roommates, friends, adult children, and younger children—about money. It’s not going to be easy—money talk is tough for many people. Sixty-two percent of Americans who participated in a 2023 survey said they did not talk about money. Those who did have financial conversations generally conversed with a spouse or partner, reported Kamaron McNair of CNBC.¹²

There are many reasons people avoid financial conversations. They may:

• Believe it is impolite to talk about money.
• Worry that discussions will be awkward.
• Fear being judged for their choices.
• Think their money is no one else’s business.

The issue is less prevalent among younger people than it is among older people, according to CNBC. “…56 [percent] of millennials and 49 [percent] of Gen Zers say they’re having financial conversations on the regular, compared with just 38 [percent] of Gen Xers and 22 [percent] of baby boomers…Talking about money can help young people increase their financial literacy as they learn from and teach their friends. But it’s equally important for younger people to bring up financial topics with their elders—or at least their more experienced peers—especially when it comes to making big decisions,” reported McNair.¹²

While breaking down the money-talk barrier may be challenging, the rewards can be significant. Financial discussions can improve decision-making, strengthen relationships, and help children develop sound money habits. Our goal is to help the people we serve make financial decisions that help them live the lives they want to lead. If talking about money is a difficult hurdle, get in touch. We can help facilitate these important discussions.

Weekly Focus – Think About It

“The single biggest problem in communication is the illusion that it has taken place.”13

—George Bernard Shaw, Nobel Prize-winning playwright

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

¹ https://www.cboe.com/tradable_products/vix/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Cboe_VIX%20Index%20Charts_1.pdf)

² https://www.barrons.com/livecoverage/stock-market-today-102324/card/the-dow-keeps-falling-the-market-s-fear-gauge-is-near-a-key-level–349PmzqKaFkDhC1aYtSc?siteid=yhoof2 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_The%20Dow%20Keeps%20Falling_2.pdf)

³https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_102524.pdf

⁴ https://www.aaii.com/sentimentsurvey (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Historical%20Sentiment%20Data_5.pdf)

⁵ https://finance.yahoo.com/quote/%5ETNX/history/

⁶ https://www.barrons.com/articles/stock-market-danger-zone-tariffs-b2bb22e6?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Stock%20Market%20Enters%20Danger%20Zone_7.pdf)

⁷ https://www.barrons.com/articles/stock-market-trump-harris-election-61b41129?refsec=up-and-down-wall-street&mod=topics_up-and-down-wall-street (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Market%20is%20Afraid%20of%20Election%20Day_8.pdf)

⁸ https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Data_9.pdf)

⁹ https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202410

10 https://www.calendarr.com/united-states/calendar-november-2024/

11 https://nationaltoday.com/talk-money-day/

1² https://www.cnbc.com/2023/05/10/americans-arent-talking-about-money-it-could-hold-you-back.html

[1]³ https://www.brainyquote.com/quotes/george_bernard_shaw_385438

The Markets

Happy birthday!

The bull market in stocks charged past its two-year birthday on October 12. “This unique bull market is still young relative to history and, for now, supported by relatively healthy breadth and broadening participation,” wrote Liz Ann Sonders and Kevin Gordon of Schwab.¹

One factor in the U.S. stock market’s rise has been the American economy’s surprising strength as it recovers from a surge in inflation. Our economy is “the envy of the world” and “has left other rich countries in the dust,” reported Simon Rabinovitch and Henry Curr of The Economist. “Expect that to continue,” they wrote.²

The strength of the U.S. economy was reflected in the release of robust economic data and solid company earnings reports last week. Here’s what happened:

• U.S. retail sales grew faster-than-expected in September.^3,4 Retail sales data show how much Americans spent at food and retail stores. The information is considered to be a leading economic indicator, which means that it provides some insight into what may be ahead for the stock market. Will Kenton of Investopedia explained:

“Retail sales is an important indicator that signals either the contraction or expansion of an economy. An increase in retail sales signals a healthy economy that is expanding while a decrease in retail sales signals the opposite. An increase in retail sales usually moves stocks upward and is good for shareholders.”⁵

• Third quarter earnings season was off to a good start. At the end of each quarter, publicly traded companies report on sales and profits for the previous quarter. Earnings season has a direct effect on share prices and stock market performance. “…if most companies, particularly the established market leaders, report increasing sales and earnings, traders tend to feel more confident about the market’s prospects. When earnings are trending below expectations, it can be a warning sign of potential trouble ahead,” explained Schwab.⁶

At the end of last week, 14 percent of the companies in the Standard & Poor’s 500 Index had reported third-quarter performance. Seventy-nine percent had beaten analysts’ earnings (profit) expectations, and 64 percent had beaten revenue (income) expectations, according to John Butters of FactSet.⁷

Major U.S. stock indexes moved higher for the sixth consecutive week,^{8, 9} and U.S. Treasury yields finished last week in roughly the same place they ended the week before.¹⁰

Data as of 10/18/24	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	0.9%	23.0%	35.9%	9.3%	14.5%	11.9%
Dow Jones Global ex-U.S. Index	-0.3	9.5	21.4	-0.3	4.3	3.1
10-year Treasury Note (yield only)	4.1	N/A	4.9	1.6	1.8	2.2
Gold (per ounce)	2.4	30.5	38.7	15.3	12.7	8.1
Bloomberg Commodity Index	-2.6	-0.4	-7.2	-1.8	4.5	-1.7

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

AN OFTEN-OVERLOOKED RETIREMENT RISK. When planning for retirement, there is a risk that is sometimes overlooked—the possibility of cognitive decline. It’s not fun to think about, but a significant number of older Americans experience difficulty with memory, problem-solving, concentration and other important mental tasks. Fortunately, there are some strategies that can help protect you and your loved ones.

As people age, they may not be as sharp as they once were. After 65, learning new information can take longer. Retirees, occasionally, struggle to find the right word or misplace their glasses and keys. This is normal aging that “doesn’t affect recognition, intelligence or long-term memory,” according to the Cleveland Clinic.¹¹

In some cases, though, a person experiences a more significant decline in brain function. It may be caused by a health issue, such as a stroke, or a disorder, like Alzheimer’s. About 55 million Americans live with Alzheimer’s disease or another type of dementia.¹²

The National Institute on Aging suggests that getting enough sleep, eating healthy meals, being physically active, managing any health conditions, connecting with family and friends, and keeping your brain engaged by learning new things can help keep your brain healthy.¹³

No matter how conscientious you are, it’s also important to organize your finances so they are easy to manage. This often means:

• Building a network of family members and professionals who understand your goals and needs.
• Streamlining your finances so managing money is easier as you age. Automating bill payment, keeping track of accounts through a centralized system, and other actions can help simplify your financial life.  
• Putting appropriate planning documents in place, such as a will, a revocable living trust, a power of attorney, and/or a living will that spells out your preferences for medical care.

“Cognitive decline can have devastating consequences for personal finances and sound financial decision-making. The ability to manage finances is one of the first cognitive skills to deteriorate, leaving many people vulnerable to suboptimal financial decision-making and an ever-growing array of pernicious financial scams,” reported Chris Heye in Kiplinger Personal Finance.¹⁴

If you would like to learn more, please get in touch.

Weekly Focus – Think About It

“Time and memory are true artists; they remould reality nearer to the heart’s desire.”¹⁵

—John Dewey, philosopher

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

[1] https://www.schwab.com/learn/story/is-two-year-old-bull-market-2-legit-2-quit

2 https://www.economist.com/special-report/2024-10-19

3 https://www.census.gov/retail/sales.html

4 https://www.reuters.com/markets/us/us-retail-sales-increase-solidly-september-2024-10-17/

5 https://www.investopedia.com/terms/r/retail-sales.asp

6 https://www.schwab.com/learn/story/earnings-season-what-to-look#

7https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_101824.pdf (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-21-24_Factset_Earnings%20Insight_7.pdf)

8 https://www.barrons.com/articles/stock-market-rise-moreanimal-spirits-e2735b04?refsec=the-trader&mod=topics_the-trader

⁹ https://www.barrons.com/market-data

10 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202410

[1]¹ https://my.clevelandclinic.org/health/diseases/17990-mild-cognitive-impairment

[1]² https://www.alz.org/alzheimer_s_dementia

¹³ https://www.nia.nih.gov/health/brain-health/cognitive-health-and-older-adults

[1]⁴ https://www.kiplinger.com/retirement/cognitive-decline-how-to-guard-your-finances

[1]⁵ https://www.brainyquote.com/quotes/john_dewey_163896?src=t_memory

The Markets

There was a lot to celebrate last week!

The Standard & Poor’s 500 Index closed above 5,800 for the first time—and that’s not all.¹

The Dow Jones Industrial Average also notched a record high last week—and all three major U.S. stock indices ended the first full week of October with gains of more than one percent.¹

There was good economic news, too.

• Inflation continued to slow in September. The Consumer Price Index showed headline inflation was 2.4 percent annualized—the smallest annual increase since February 2021.² 

• Consumers are feeling better than they did a year ago. “[Consumer sentiment] is currently 8 [percent] stronger than a year ago and almost 40 [percent] above the trough reached in June 2022,” reported University of Michigan Surveys of Consumers Director Joanne Hsu.³

• The economy continues to grow. After inflation, the U.S. economy grew by 3 percent in the second quarter of 2024.⁴ Forecasts project that economic growth in the third quarter will be 3.2 percent.⁵

• Wages have grown faster than inflation. In September 2024, average hourly earnings were up 4 percent. After inflation, they were up 1.5 percent.⁶ Of course, that’s a broad reading for the entire country and may not reflect individual experience.

“By just about every measure, the U.S. economy is in good shape. Growth is strong. Unemployment is low. Inflation is back down. More important, many Americans are getting sizable pay raises, and middle-class wealth has surged to record levels. We are living through one of the best economic years of many people’s lifetimes…The United States has nearly 7 million more jobs than it did before the pandemic, and the largest share of 25- to 54-year-olds working since 2001,” reported Heather Long of The Washington Post.⁷

It’s remarkable that many Americans still don’t recognize the strength of the economy. Last week, a Harvard Caps/Harris Poll found that, “63 [percent] of voters believe the U.S. economy is on the wrong track and 62 [percent] characterize it as weak, consistent with perceptions over the past year.”⁸

Last week, major U.S. stock indexes finished higher.1 U.S. bonds appeared to be headed for a fourth-straight week of declines with the yield on a 10-year note above 4 percent again.9^,10

Data as of 10/11/24	1-Week	YTD	1-Year	3-Year	5-Year	10-Year
Standard & Poor’s 500 Index	1.1%	21.9%	32.9%	10.1%	14.4%	12.0%
Dow Jones Global ex-U.S. Index	-0.4	9.9	19.5	0.5	4.6	3.1
10-year Treasury Note (yield only)	4.1	N/A	4.6	1.6	1.8	2.3
Gold (per ounce)	-0.1	27.4	41.6	14.7	12.4	8.0
Bloomberg Commodity Index	-1.2	2.2	-2.2	-0.6	5.0	-1.7

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. 

Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

IT’S POLICY THAT AFFECTS STOCK MARKETS, NOT POLITICS. Although presidential elections can affect financial markets over the short term, it is the policies a new President introduces that influence economic growth and the stock market. Sometimes, policies lift the economy. Other times, they don’t. For example:

President Thomas Jefferson embargoed all trade with England and France, preventing U.S. ships from doing business with other countries. While he had sound reasons for pursuing the policy, “It decimated the economy…As many as half of the working men in the New England coastal communities were unemployed. Poor houses were overflowed, banks failed,” reported WBUR.11

The embargo was not popular. Eventually, American merchants found loopholes that allowed them to trade with Canada and Spanish Florida. Smuggling also increased.1²

President Abraham Lincoln had a profound impact on the United States economy. He led the country through the Civil War, and signed the Emancipation Proclamation, which led to the end of slavery and necessitated the adoption of new economic models.¹³

Research from the University of Chicago suggests that “emancipation generated aggregate economic gains for the U.S. economy that were worth between 4 and 35 percent of U.S. GDP, making it, even at the low end of their estimation, one of the most important economic events in U.S. history—bigger than the introduction of railroads, by some estimates, and worth 7 to 60 years of technological innovation in the latter half of the 19th century.”13

President Jimmy Carter faced an embargo—the Arab oil embargo of 1973. Demand for gasoline far outstripped supply in the United States, and Americans waited in long lines to fill their cars’ gas tanks.1⁴ In response, the President developed energy conservation strategies.

“President Carter signed energy legislation that created the U.S. Department of Energy, provided incentives for renewables and coal, deregulated oil and natural gas prices, and banned new power plants from using gas or oil. Some of these policies have had a lasting effect. Others drew criticism and were ultimately repealed,” stated historian Jay Hakes on a Center for Global Energy Policy podcast at Columbia University.1⁵

While there are usually differences of opinion when new policies are implemented, the economic outcome is sometimes difficult to predict.

Weekly Focus—Think About It

“History is a jangle of accidents, blunders, surprises and absurdities, and so is our knowledge of it, but if we are to report it at all we must impose some order upon it.1⁶

—Henry Steele Commager, historian

* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

1 https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-14-24_Barrons_Data_1.pdf)

2 https://www.bls.gov/news.release/cpi.nr0.htm

³ http://www.sca.isr.umich.edu

⁴ https://www.bea.gov/sites/default/files/2024-09/gdp2q24-3rd.pdf

⁵ https://www.atlantafed.org/cqer/research/gdpnow

⁶ https://www.bls.gov/news.release/realer.t01.htm (Table 1a)

⁷ https://www.washingtonpost.com/opinions/2024/10/10/economy-great-year-election/

⁸ https://harvardharrispoll.com/press-release-sep-2024/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-14-24_Bloomberg_Bond%20Traders%20Big%20Week%20Ends%20With%20Fed%20Rate%20Cuts%20Even%20Less%20Certain_8.pdf)

9 https://www.bloomberg.com/news/articles/2024-10-11/bond-traders-big-week-ends-with-fed-rate-cuts-even-less-certain

10 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202410

11 https://www.wbur.org/radioboston/2012/06/15/new-england-succession

[1]² https://mises.org/mises-daily/jeffersons-disastrous-embargo

[1]³ https://www.chicagobooth.edu/review/emancipation-may-have-generated-largest-economic-gains-us-history

[1]⁴ https://www.npr.org/sections/pictureshow/2012/11/10/164792293/gas-lines-evoke-memories-oil-crises-in-the-1970s

¹⁵ https://www.energypolicy.columbia.edu/jimmy-carters-energy-policy-legacy/

[1]⁶ https://www.azquotes.com/quote/910113