Blog
The Markets
Bond yields are rising—and they have investors’ attention.
Last year, the United States Federal Reserve (Fed) lowered the federal funds rate by one percent.1 (The federal funds rate is the interest rate the Fed charges banks. It influences other interest rates.) This shift in Fed policy made a lot of people happy.
- Companies, business owners, and consumers cheered because Fed rate cuts typically lower borrowing costs. As a result, rates on business loans, home equity loans, auto loans and credit cards tend to move lower.2
- Stock investors were enthusiastic because lower borrowing costs can reduce companies’ expenses and increase profits, and that can lift stock prices higher. Since the stock market moves in anticipation of future events, rate cut expectations are already reflected in many companies’ stock prices.2
- Prospective homebuyers were optimistic. Fixed mortgage rates are linked to the yield of the 10-year U.S. Treasury note,3 and they hoped it might also move lower.
Bondholders were more skeptical. Even as the Fed was cutting the federal funds rate, yields on longer maturities of U.S. government bonds were moving higher—not lower.4 One reason is that economic data—including last week’s strong jobs report5—continue to confirm that economic growth and inflation are exceeding expectations. As a result, the Fed may be inclined toward fewer rate cuts in 2025.
“For stocks, higher bond yields imply no increase in price/earnings ratios and possibly some contraction from current levels,” reported Randall W. Forsyth of Barron’s. Changing expectations for Fed actions and company performance is likely to shift analysts’ outlook for stock market performance.6
There is a second reason for the divergence in Fed actions and government bond yields, according to economist Mohamed El-Erian, a columnist for Bloomberg. He explained that key government bond yields in advanced economies “are widely regarded as the most accurate gauge of the economic outlook, including growth, inflation and central bank policies.” In his opinion, “Yield increases show that investors are closely watching whether advanced economies have the ability to deal with high debt and rising borrowing costs.”7
Last week, major U.S. stock indices moved lower,8 and yields on longer maturities ofU.S. Treasuries continued to rise.4
Data as of 1/10/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -1.9% | 0.9% | 21.8% | 7.7% | 12.3% | 11.1% |
| Dow Jones Global ex-U.S. Index | -1.1 | -1.3 | 3.5 | -2.0 | 1.3 | 2.5 |
| 10-year Treasury Note (yield only) | 4.8 | N/A | 4.0 | 1.8 | 1.8 | 1.9 |
| Gold (per ounce) | 1.5 | 2.9 | 32.4 | 14.4 | 11.6 | 8.2 |
| Bloomberg Commodity Index | 4.1 | 3.8 | 5.1 | 0.5 | 4.9 | 0.1 |
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.
HOW MUCH DO YOU KNOW? Last year, Pew Research asked adults across the United States how much they knew about personal finance, a topic that includes “managing your money as well as saving and investing. It encompasses budgeting, banking, insurance, mortgages, investments, and retirement, tax, and estate planning,” reported Will Kenton of Investopedia.9
More than half (54 percent) of those who participated in the survey said they knew a great deal or a fair amount about personal finance. However, the results varied widely depending on the demographic attributes considered. For example, knowledge about money appears to increase with age, reported Khadijah Edwards of Pew Research Center.10 For example:
Ages 18 to 29: 41 percent know at least a fair amount
Ages 30 to 49: 47 percent know at least a fair amount
Ages 50 to 64: 60 percent know at least a fair amount
Ages 65 and older: 67 percent know at least a fair amount
Extrapolating that result suggests that about two-thirds of Americans may know a fair amount about personal finance as they approach retirement. Many survey participants learned what they knew about money from family and friends. Others said they relied on:10
- The internet,
- A college or university course,
- Media (news, documentaries, and books), and
- Elementary or high school classes.
When asked about various issues related to finances, respondents were more confident in their ability to accomplish some tasks than others. For example, participants were confident they could:
- Find their credit report 75 percent
- Make a monthly budget 59 percent
- Develop a plan to pay off debt 57 percent
- Create a plan to save money 56 percent
- Build an investment plan to grow wealth 27 percent
If you have friends or family members who would benefit from knowing more about how to manage, save, and invest money, gifting a subscription to a personal finance publication could make a difference. You’re also welcome to share our contact information. We help people pursue their financial goals.
Weekly Focus – Think About It
“Real knowledge is to know the extent of one’s ignorance.”11
—Confucius, 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.newyorkfed.org/markets/reference-rates/effr
2 https://www.investopedia.com/terms/f/federalfundsrate.asp
3 https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates/
5 https://www.bls.gov/news.release/empsit.nr0.htm
6 https://www.barrons.com/articles/bond-yields-stocks-markets-c547ed93?mod=hp_LEDE_C_1 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-13-25_Barrons_Bond%20Yields%20Rising%20A%20Problem%20For%20Stocks_6.pdf)
7 https://www.bloomberg.com/opinion/articles/2024-12-30/bond-vigilantes-are-putting-governments-on-notice (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-13-25_Bloomberg_Bond%20Vigilantes%20Putting%20Govs%20on%20Notice_7.pdf)
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-13-25_Barrons_Data_8.pdf)
9 https://www.investopedia.com/terms/p/personalfinance.asp
[1]1 https://www.goodreads.com/quotes/63437-real-knowledge-is-to-know-the-extent-of-one-s-ignorance
The Markets
Hello, 2025!
As we head into a new year, it can be helpful to look back at the previous year—and 2024 was a doozy. Stocks in the United States delivered a double-double—posting double-digit gains for a second year in a row. That kind of performance is a relative rarity and has only occurred nine times over the last 96 years, according to Tony DeSpirito of BlackRock.1
So, how well did U.S. stocks perform? Here are annual returns for major U.S. stock indexes over the past two years—plus the return for 2022 as a reminder that stocks don’t always move higher.
| 2024 | 2023 | 2022 | |
| Standard & Poor’s (S&P) 500 Index:2 | 23.3% | 24.2% | -19.4% |
| Nasdaq Composite Index:3 | 28.6% | 43.4% | -33.1% |
| Dow Jones Industrial Average:4 | 12.9% | 13.7% | – 8.8% |
Throughout 2024, share price gains were supported by several factors, including:
- Enthusiasm for Artificial Intelligence (AI). Magnificent Seven stocks had another big year. “The group…averaged a gain of 65 [percent] this year, compared with an average of 111 [percent] last year, according to Dow Jones Market Data,” reported Emily Dattilo of Barron’s in December 2024. “The Mag 7 has made up 57 [percent] of the S&P 500’s…market [capitalization] gain this year versus 65 [percent] last year.”5
- Strong corporate revenue and earnings growth. Many publicly traded companies have been making more money and growing profits. For the full year 2024, analysts expect companies in the S&P 500 to report year over year earnings growth of 9.4 percent and revenue growth of 5.1 percent. In 2025, expectations are even higher. Earnings growth was forecast to be 14.8 percent and revenue growth 5.8 percent for the year, reported John Butters of FactSet.6
- A solid U.S. economy. “Over the last few years, the U.S. economy has consistently defied expectations for a slowdown, and 2024 was no different. Despite uncertainty around a presidential election, elevated interest rates and a cooling labor market, economic growth remained solid this year,” reported Augusta Saraiva of Bloomberg.7
- Steady consumer spending. A key driver for the economy was robust consumer spending. “Even as hiring slowed, wage growth continued to outpace inflation and household wealth reached new records, supporting an ongoing expansion in household spending,” wrote Saraiva.7
- Anticipation of Federal Reserve rate cuts. For much of the year, investors eagerly anticipated Federal Reserve (Fed) rates. In general, when the Fed lowers the federal funds rate, borrowing becomes less expensive which can boost corporate earnings and share prices, explained Mary Hall of Investopedia.8
These factors helped U.S. stocks repeatedly set new record highs during the final quarter of the year. However, the stock rally stalled in December after the Fed expressed concerns about inflation and modified its forecast for 2025 rate cuts “amid slower progress on inflation and an uncertain policy outlook,” reported Sarah Hansen and Bella Albrecht of Morningstar.9
In the bond market, many sectors delivered positive returns over the full year 2024. However, quite a few gave back some gains in the last months of the year. “Bond markets saw a major selloff in the fourth quarter, sparked by the outcome of the U.S. presidential election and the potential for stronger economic growth, inflationary policies, and more deficit spending in the years ahead,” reported Hansen and Albrecht.9 The yield on the benchmark 10-year U.S. Treasury note started the year at 3.95 percent and finished the year at 4.58 percent.10
Last week, which was shorter than usual due to the New Year’s holiday, major U.S. stock indices finished lower.11 The yield curve continued to steepen as yields on shorter maturities of U.S. Treasuries fell, while yields on longer maturities rose.10
Data as of 1/3/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.5% | 1.0% | 26.3% | 7.4% | 12.9% | 11.4% |
| Dow Jones Global ex-U.S. Index | -0.8 | -0.2 | 5.0 | -1.9 | 1.6 | 2.7 |
| 10-year Treasury Note (yield only) | 4.6 | N/A | 3.9 | 1.6 | 1.8 | 2.0 |
| Gold (per ounce) | 1.2 | 1.4 | 29.6 | 13.5 | 11.3 | 8.2 |
| Bloomberg Commodity Index | 0.3 | -0.3 | 0.2 | -0.3 | 3.9 | -0.5 |
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.
A BRRR-Y COLD NEW YEAR’S TRADITION. People around the world like to welcome the new year by putting on a bathing or wet suit and immersing themselves in cold water. The name of the event—Polar Bear Plunge, Christmas Swim, or New Year’s Dive—varies by location.12 Of course, water and air temperature vary greatly, too, depending on where the plunge takes place. Here are a few examples from the United States on January 1, 2025.13,14
Coney Island, New York/Atlantic Ocean
Air temperature: 50.0 degrees Fahrenheit
Water temperature: 40.5 degrees Fahrenheit
Myrtle Beach, South Carolina/Atlantic Ocean
Air temperature: 60.0 degrees Fahrenheit
Water temperature: 58.4 degrees Fahrenheit
Milwaukee, Wisconsin/Lake Michigan
Air temperature: 30.0 degrees Fahrenheit
Water temperature: 39.7 degrees Fahrenheit
San Diego, California/Pacific Ocean
Air temperature: 60.0 degrees Fahrenheit
Water temperature: 57.1 degrees Fahrenheit
According to Cleveland Clinic Health Essentials, submerging yourself in cold water for short periods may have health benefits. For people who are in good health, cold-water baths may ease sore muscles, reduce inflammation, improve circulation, and promote better sleep. (It remains unclear whether New Year’s Day plunges confer any of these benefits.)15
How did you celebrate the start of the new year?
Weekly Focus – Think About It
“Write it on your heart that every day is the best day in the year.”16
—Ralph Waldo Emerson, 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.blackrock.com/us/individual/insights/taking-stock-quarterly-outlook
2 https://www.macrotrends.net/2324/sp-500-historical-chart-data
3 https://www.macrotrends.net/1320/nasdaq-historical-chart
4 https://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-06-25_Barrons_1%20Way%20the%20Mag%207%20Disappointed%20in%2024_5.pdf)
5 https://www.barrons.com/articles/magnificent-7-stocks-nvidia-apple-tela-c481ed78
6https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_122024A.pdf [Page 13] (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-06-25_Bloomberg_US%20Economy%20Surprised%20Again%20in%2024_6.pdf)
8 https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
9 https://www.morningstar.com/markets/13-charts-q4s-big-post-election-rallyand-late-stumble
[1]1 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-06-25_Barrons_Data_11.pdf)
12 https://en.wikipedia.org/wiki/Polar_bear_plunge
[1]3 https://www.accuweather.com (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-06-24_AccuWeather_Data_13.pdf)
[1]4 https://www.seatemperature.org (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-06-25_SeaTemperature_San%20Diego%20Temp_14.pdf)
[1]5 https://health.clevelandclinic.org/what-to-know-about-cold-plunges [1]6https://parade.com/948122/marynliles/best-new-years-quotes/
The Markets
Consumers were more optimistic. Investors were less so.
As we neared the end of 2024, U.S. consumers were feeling optimistic. Every month the University of Michigan Survey of Consumers conducts about 600 interviews with American households, asking interviewees about their personal finances, business conditions, and buying conditions.1,2
In December 2024, the Index of Consumer Sentiment was up 3.1 percent month to month, and 6.2 percent year to year. Consumer sentiment rose “for the fifth consecutive month…reaching its highest value since April 2024. Buying conditions exhibited a particularly strong 32 [percent] improvement, primarily due to a surge in consumers expecting future price increases for large purchases…Broadly speaking, consumers believe that the economy has improved considerably as inflation has slowed, but they do not feel that they are thriving; sentiment is currently about midway between the all-time low reached in June 2022 and pre-pandemic readings,” reported survey Director Joanne Hsu.1
Individual investors, on the other hand, were feeling less bullish than they did earlier in the month. The AAII Investor Sentiment Survey found that investors’ outlook shifted in December. Investors became more uncertain, and a higher percentage reported feeling bearish.3
| Week of Dec. 4 | Week of Dec. 25 | Historical average | Highest in 2024 | |
| Bullish (Stock prices will rise over the next six months) | 48.3% | 37.8% | 37.5% | 52.7% (July 17, 2024) |
| Neutral (Uncertain which way stock prices will move) | 21.0% | 28.0% | 31.5% | 35.9% (May 15, 2024) |
| Bearish (Stock prices will fall over the next six months) | 30.7% | 34.1% | 31.0% | 38.6% (Nov. 27, 2024) |
Source: AAII Investor Sentiment Survey
Investor sentiment is often considered to be a contrarian indicator. The AAII website explained, “Although investors would like to imagine that their decisions are rational, most have bought at near-highs due to fear of losing out on gains and sold at near-lows due to fear of further losses. This herd behavior is called market sentiment; when market sentiment is low, the majority believes the market will fall, while high market sentiment means that the majority feels the market will rise in value. However, more often than not, the market will move against the sentiment of the majority. Therefore, many professional money managers use market sentiment as a contrarian indicator, buying when sentiment is pessimistic and selling when sentiment is optimistic.”4
Last week, major U.S. stock indices finished higher,5 and yields on longer maturities of U.S. Treasuries rose. The benchmark 10-year U.S. Treasury yielded 4.62 percent at the end of the day on Friday.6
Data as of 12/27/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.7% | 25.2% | 25.7% | 7.6% | 13.0% | 11.1% |
| Dow Jones Global ex-U.S. Index | 1.4 | 3.6 | 4.0 | -1.5 | 1.8 | 2.5 |
| 10-year Treasury Note (yield only) | 4.6 | N/A | 3.8 | 1.5 | 1.9 | 2.2 |
| Gold (per ounce) | 0.0 | 25.9 | 26.4 | 13.4 | 11.6 | 8.2 |
| Bloomberg Commodity Index | 0.7 | -0.5 | -1.9 | -0.7 | 3.8 | -0.8 |
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.
IDIOMS DON’T SAY WHAT THEY MEAN…If you’ve ever “cried wolf,” “gone the extra mile,” or “had butterflies in your stomach,” then you’re familiar with idioms—phrases that don’t mean what they say. They’re used to “add color” to communications, making what’s said or written more memorable. The English language has a lot of idioms about money. Test your knowledge of money idioms by taking this quiz.
- Someone says, “You can take it to the bank.” What they mean is you should:
- Make a deposit.
- Proceed with caution, it may be a scam
- Believe a statement is true and accurate
- Understand that a venture will generate a lot of money
- If someone is ‘living on a shoestring,” they have a very limited budget. Which of the following may explain how the saying originated?
- Shoestrings are thin and break easily
- Peddlers once made a living by traveling town to town selling shoelaces
- British prisoners would lower a shoe by its laces through cell windows hoping someone would give them money
- All of the above
- If you believe that a new product or service will do well you might say it will:
- Break the bank
- Put cash on the barrelhead
- Sell like hotcakes
- Hop on the gravy train
- When people offer aid to a person or group in need, they are:
- Striking while the iron is hot
- Following the herd
- Playing the long game
- Offering a helping hand
Weekly Focus – Think About It
“When we love, we always strive to become better than we are. When we strive to become better than we are, everything around us becomes better too.”7
—Paulo Coelho, author
Answers: 1) c8; 2) d9,10; 3) c11; 4) d12
* 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] http://www.sca.isr.umich.edu
2 https://data.sca.isr.umich.edu/fetchdoc.php?docid=24774
3 https://www.aaii.com/sentimentsurvey (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-30-24_AAII%20Investor%20Sentiment%20Survey_3.pdf)
4 https://www.aaii.com/journal/article/contrarian-indicators
5 https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-30-24_Barrons_Data_5.pdf)
7 https://www.goodreads.com/author/quotes/566.Paulo_Coelho
8 https://grammarist.com/idiom/bank-on-it-and-take-it-to-the-bank/
9 https://library.wbi.ac.id/repository/293.pdf
[1]0 https://www.merriam-webster.com/dictionary/shoestring#h2
[1]1 https://www.merriam-webster.com/dictionary/hotcake [1]2https://www.merriam-webster.com/dictionary/helping%20hand
The Markets
How high can U.S. stocks fly?
The U.S. stock market has delivered exceptional performance over the past few years and remains on track to deliver solid returns in 2024.1
“It isn’t a secret that U.S. stocks have outperformed the rest of the world. Over the past decade, the S&P 500 returned 13 [percent] a year on average,* compared with less than 5 [percent] for the MSCI EAFE [Europe, Australia, and Far East] index of developed countries. Investors can thank the health of the U.S. economy and the remarkable growth of the tech sector. The downside: U.S. stocks now trade more than 21 times earnings, compared with less than 14 for international ones…” reported Ian Salisbury of Barron’s.1
In recent weeks, though, the stock market appears to have lost some steam. While Magnificent Seven technology stocks have pushed higher, many other stocks have moved lower. On Thursday, Geoffrey Morgan of Bloomberg reported, “The S&P 500 Index closed out its ninth consecutive day where the number of constituents falling outnumbers those rising. That’s [the] longest such streak since Bloomberg started collecting the data in 2004. The development signals that the foundation of the stock-market rally is weakening, with strength in technology high-flyers offsetting softness everywhere else.”2
As the end of the year approaches, major U.S. stock indices are near record highs. U.S. Equity Strategist Mike Wilson, who is optimistic about the outlook for the U.S. stock market, told the hosts of Bloomberg Open Interest that investors should be prepared for some uncertainty and volatility and, possibly, a stock market correction.3
A correction occurs when the stock market drops by more than 10 percent, and by less than 20 percent, from its recent peak. While corrections are uncomfortable for investors, they tend to wring out irrational exuberance and ring in more reasonable share price valuations, reported James Chen of Investopedia.4
Last week, the Nasdaq Composite Index, which is heavily weighted in technology stocks, passed 20,000 for the first time.5 The Nasdaq finished the week higher, while the Standard & Poor’s 500 Index and Dow Jones Industrial Average moved lower.6 Concerns that sticky inflation might lead the Federal Reserve to pause its rate-lowering cycle pushed the yield on the benchmark 10-year U.S. Treasury lower last week, reported Sinéad Carew and Harry Robertson of Reuters.7
* The 10-year return for the Standard & Poor’s 500 Index in this quote is different from the return in our table because the author used the Index’s return with dividends reinvested. The return in our table does not include reinvested dividends.
Data as of 12/13/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.6% | 26.9% | 28.6% | 9.0% | 13.8% | 11.8% |
| Dow Jones Global ex-U.S. Index | -1.1 | 5.9 | 10.4 | -0.5 | 2.6 | 3.0 |
| 10-year Treasury Note (yield only) | 4.4 | N/A | 4.0 | 1.4 | 1.8 | 2.1 |
| Gold (per ounce) | 0.8 | 27.9 | 34.1 | 14.2 | 12.6 | 8.2 |
| Bloomberg Commodity Index | 1.2 | 0.0 | 2.4 | 0.7 | 4.4 | -1.1 |
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.
WHAT’S IN A WORD? Dictionaries and publications have begun to share their “Word of the Year.” For 2024, Merriam-Webster Dictionary chose “polarization,” which is defined as “division into two sharply distinct opposites; especially, a state in which the opinions, beliefs, or interests of a group or society no longer range along a continuum but become concentrated at opposing extremes.”8 Here are some other notable words of the year:
- Manifest was at the top of the list for the Cambridge Dictionary. “When famous performers, star athletes, and influential entrepreneurs claim they have achieved something because they manifested it, they are using this verb in a more recent sense: to use specific practices to focus your mind on something you want, to try to make it become a reality.”9
- Brain rot took the prize as Oxford University Press’s word of the year. Brain rot is the “supposed deterioration of a person’s mental or intellectual state, especially viewed as a result of overconsumption of material (now particularly online content) considered to be trivial or unchallenging.10
- Demure was plucked from the crowd by Dictionary.com.11 For many years, demure was a compliment given to young women for being modest and reserved. In 2024, a content creator used it “humorously in a way that appeared to challenge and poke fun at widespread societal expectations of how women are supposed to look and behave,” reported Leslie Katz for Forbes.12
- Allision was one of Merriam Webster’s runner-up words of the year. An allision occurs when a ship runs into a stationary object. The difference between “collision” and “allision” became more widely known after a cargo ship hit Baltimore’s Francis Scott Key Bridge causing it to collapse.8
In general, media stories, headlines, social media trends, and online search results help determine publications’ short lists for Word of the Year. Runner-up words for 2024 included totality, democracy, pander, brat, ecotarian, romantasy, dynamic pricing, slop, extreme weather, and resilience.8,9,10,11
What is your choice for word of the year?
Weekly Focus – Think About It
“Language is the blood of the soul into which thoughts run and out of which they grow.”13
—Oliver Wendell Holmes, Supreme Court Justice
* 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/articles/us-stock-market-dollar-tariffs-54efd893 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-16-24_Barrons_US%20is%20No.%201%20When%20It%20Comes%20to%20Stocks_1.pdf)
2 https://www.bloomberg.com/news/articles/2024-12-12/s-p-500-s-record-rally-shows-cracks-as-most-stocks-left-out? (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-16-24_Bloomberg_S&P%20500%20%20Record%20Rally%20Shows%20Cracks_2.pdf)
3 https://www.bloomberg.com/news/videos/2024-12-13/morgan-stanley-s-wilson-on-stocks-in-2025-volatility-video [1:40 – 2:00, 7:45 min]
4 https://www.investopedia.com/terms/c/correction.asp
5 https://www.nasdaq.com/market-activity/index/comp
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-16-24_Barrons_Data_6.pdf)
7 https://www.reuters.com/markets/global-markets-wrapup-1-2024-12-13/
8 https://www.merriam-webster.com/wordplay/word-of-the-year
9 https://dictionary.cambridge.org/editorial/word-of-the-year
[1]0 https://corp.oup.com/word-of-the-year/
[1]1 https://www.dictionary.com/e/word-of-the-year-2024/
[1]3https://www.bsceducation.com/blog/inspirational-quotes-for-language-learners/