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/
The Markets
U.S. stocks thrive amid turmoil.
The performance of the U.S. stock market is striking. Last week, the Standard & Poor’s (S&P) 500 closed at a record high for the 57th time this year, reported Rita Nazareth of Bloomberg.1 Here are some of the notable factors that sent stocks higher last week:
Political upheaval overseas. A declaration and cancellation of martial law in South Korea and the toppling of the French government roiled financial markets overseas, making United States markets attractive. “The political chaos spanning Seoul to Paris this week is reinforcing why many investors have chosen to stick to American markets,” reported Simon Kennedy and Phil Serafino of Bloomberg.2
A powerful technology rally. Spending and excitement around the potential of artificial intelligence (AI) continue to delight investors. Both the communication services and information technology sectors are expected to report double-digit earnings growth during the last three months of 2024, reported John Butters of Factset.3
Rising company profits have been driven by higher spending. “While the ROI [return on investment] of any given AI project remains uncertain, one thing is becoming clear: CIOs [chief investment officers] will be spending a whole lot more on the technology in the years ahead. Research firm IDC projects worldwide spending on technology to support AI strategies will reach $337 billion in 2025—and more than double to $749 billion by 2028,” reported Paula Rooney of CIO.4
Continued U.S. economic strength. Employers added 227,000 new jobs in November.5 That was well above the 200,000 forecasted, reported Barron’s. Stocks rose on the news, and so did expectations that the Federal Reserve will lower interest rates again at its December meeting.6 Lower rates are typically good for companies because they often lower the cost of borrowing and lead to higher spending.
By the end of the week, the S&P 500 and Nasdaq Composite Indexes were higher.The Dow Jones IndustrialAverage finished lower as it has less exposure to technology stocks, according to Barron’s,7 and more significant exposure to a large health insurance company that saw its stock price fall sharply after the assassination of its chief executive officer last week, reported Caroline Valetkevitch of Reuters.8 Treasury bonds gained last week, too, as yields moved lower on expectations of a Fed rate cut.9
When any asset class experiences significant gains during the year, it’s important to review your investment allocations and make adjustments to maintain the risk profile that makes you most comfortable. Rebalancing also helps investors follow an important investment strategy: buy low and sell high.
Data as of 12/6/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.0% | 27.7% | 33.9% | 9.9% | 14.1% | 11.5% |
| Dow Jones Global ex-U.S. Index | 1.6 | 7.0 | 12.0 | 1.4 | 3.2 | 2.6 |
| 10-year Treasury Note (yield only) | 4.2 | N/A | 4.1 | 1.4 | 1.8 | 2.3 |
| Gold (per ounce) | -0.5 | 26.9 | 30.2 | 14.0 | 12.4 | 8.3 |
| Bloomberg Commodity Index | -0.7 | -1.2 | -0.1 | 0.6 | 4.5 | -1.3 |
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.
‘TIS THE SEASON FOR CYBERCRIME. While scammers and cybercriminals are always on the take, people tend to be particularly vulnerable to fraud amid the whirlwind of winter holiday shopping, giving, and travel. In a recent survey, 82 percent of participants reported they had experienced online scams from “encountering a deceptive advertisement to receiving a fake shipment notice or request from a fraudulent charity,” according to Jennifer Sauer of AARP Research.10
During 2023, losses from internet crime totaled $12.5 billion. It’s a staggering sum—and may wildly underrepresent the actual amount taken. The FBI’s 2023 Internet Crime Report stated, “…when the FBI recently infiltrated the Hive ransomware group’s infrastructure, we found that only about 20 [percent] of Hive’s victims reported to law enforcement.”11
Common 2024 holiday scams
In 2024, cybercriminals have become more aggressive and more devious, according to the FBI. The top schemes this holiday season include scammers:12
- Posting websites and social media ads offering goods at unusually low prices,
- Soliciting donations for fake charities,
- Encouraging “investment” through phony cryptocurrency platforms,
- Selling fake gift cards to be used for donations or time-sensitive purchases, and
- Offering fake gift cards and event tickets on social media to steal personal data.
Here’s how to protect yourself
Being aware of the risks is the first step toward protecting yourself from cybercrime. The FBI and Lars Daniel of Forbes offered tips for protecting yourself this holiday season.12,13 They include: s
- Resist temptation. Do not click on links received via e-mail, text, or messaging apps. If you receive a communication that a delivery has been delayed or there was an issue with a payment or something else has happened, don’t click on the link provided. Go to the company’s website or app to check.
- Verify before sharing, donating, or paying. If you receive a communication from a charity or financial institution you know, take time to verify the contact is truly from the organization. Cybercriminals can fake real numbers on caller ID and send messages that lead you to fake websites. One way to verify is to contact the organization directly with a phone number or email found on its official website, an account statement, or the back of a credit or debit card.
- Be wary of urgent requests. Holidays are often pressure-filled. Scammers often create a false sense of urgency, encouraging people to act without thinking carefully. Before you respond to an urgent and unexpected request, take time to think, research, and verify. Also, remember that government and law enforcement agencies will never ask that payments be made over the phone, via email, or through gift card purchases.
Any time you’re asked to share personal information, think carefully about who is asking and whether they should have the information. If you have any questions about how to protect yourself this holiday season, please get in touch.
Weekly Focus – Think About It
“We are all now connected by the Internet, like neurons in a giant brain.”14
—Stephen Hawking, physicist and cosmologist
* 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.bloomberg.com/news/articles/2024-12-05/stock-market-today-dow-s-p-live-updates?itm
4 https://www.cio.com/article/3601606/cios-to-spend-ambitiously-on-ai-in-2025-and-beyond.html
5 https://www.bls.gov/news.release/empsit.nr0.html
6 https://www.barrons.com/livecoverage/november-jobs-report-data-today?mod=hp_LEDE_C_1
[1]1 https://www.ic3.gov/AnnualReport/Reports/2023_IC3Report.pdf [Pages 3 and 7]
The Markets
Not one, but two!
United States stock markets are serving another cup of cheer this year. The Standard & Poor’s (S&P) 500 Index returned more than more than 24 percent in 2023.1 This year, it was up 26.5 percent through the end of November.2
It’s possible 2024 will end up in Wall Street’s bull market hall of fame, wrote Jan-Patrick Barnert of Bloomberg, because the year-to-date return of the S&P 500 ranks among its best performances of this century.3
“Not many expected another blistering rally fueled by a handful of tech titans and market sentiment so bullish that one risk event after another got cleared without a scratch… Market swings were benign, with only one big valley of tears: a summer pullback that culminated in a small selloff around early August. The drop lasted for just less than a month and failed to cross the threshold of 10 [percent], typically seen as a correction.”3
On a relative basis, U.S. stock markets have significantly outperformed stock markets elsewhere. Consider the performance of a few non-U.S. indexes through Thanksgiving.4
Index name Year-to-date return (thru Nov. 28, 2024)
MSCI Europe 0.98 percent
MSCI Europe, Australia and the Far East (EAFE) 2.95 percent
MSCI Emerging Markets (EM) 5.46 percent
MSCI Japan 6.14 percent
MSCI China 12.91 percent
MSCI India 13.54 percent
Over the year, the number of U.S. stocks participating in the rally rose. “The rally is broadening out…more stocks are advancing than declining. Typically, that phenomenon bodes well for the entire stock market. It’s a sign of better market breadth, meaning that the major indexes aren’t being led by just a small handful of stocks,” reported Paul R. La Monica of Barron’s.5
However, La Monica also cautioned against becoming complacent, “…given how long it has been since Wall Street has faced any significant obstacle, it isn’t entirely clear what might happen if market or economic conditions suddenly head south.”5
Last week, stocks jolted up and down as investors responded to data about political appointments, tariffs, and inflation data. By the end of the week, major U.S. indices were higher.2 Treasury bonds gained, too, as yields moved lower after president-elect Donald Trump nominated hedge-fund billionaire Scott Bessent to be U.S. Treasury Secretary. Many believe Bessent could be a moderating influence when it comes to taxes, tariffs, and the deficit, reported Mitchell Hartman of Marketplace.6
Data as of 11/29/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.1% | 26.5% | 32.6% | 9.0% | 13.9% | 11.4% |
| Dow Jones Global ex-U.S. Index | 1.1 | 5.3 | 10.6 | -0.3 | 3.0 | 2.4 |
| 10-year Treasury Note (yield only) | 4.2 | N/A | 4.3 | 1.5 | 1.8 | 2.2 |
| Gold (per ounce) | -1.6 | 27.6 | 29.5 | 14.1 | 12.7 | 8.3 |
| Bloomberg Commodity Index | -0.8 | -0.5 | -4.1 | -0.2 | 4.9 | -1.6 |
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.
THERE ARE A LOT OF QUESTIONS ABOUT TARIFFS. Last week,president-elect Donald Trump took to social media, promising to increase tariffs on China, Mexico, and Canada.7 One result was that internet searches related to the term “tariffs” increased sharply. These searches included:8
- How do tariffs work?
- What is Trump’s tariff plan?
- Things to buy before tariffs
- Tariffs for dummies
Here are a few answers to common questions about tariffs:
What are tariffs? Tariffs are a form of tax that one country assesses on materials, parts, and products imported from another country.7
What do tariffs do? In theory, raising prices on foreign goods will protect U.S. companies and jobs by encouraging Americans to buy goods that are produced in the United States.7 It doesn’t always work that way because the country the U.S. imposes tariffs on is likely to respond in kind, adding tariffs to U.S. materials, parts, and products. A study of the 2018-19 trade war between the U.S., China and other nations found:
“The trade-war has not to date provided economic help to the U.S. heartland: import tariffs on foreign goods neither raised nor lowered U.S. employment in newly protected sectors; retaliatory tariffs had clear negative employment impacts, primarily in agriculture; and these harms were only partly mitigated by compensatory U.S. agricultural subsidies.”9
Who pays for tariffs? The cost of a tariff is paid by U.S. businesses and U.S. consumers. “The importer who brings the product into the country—be it a car or an avocado—is responsible for the tariff at the port of entry. Customs officials collect the tax and the money goes to the U.S. Treasury. The importer can pass the cost of the tariff along in the form of higher prices to the consumer. Or, in some cases, the manufacturer or importer may choose to absorb some or all of the cost, taking a hit to the bottom line,” reported Tim Smart of U.S. News & World Report.10
How much will tariffs raise prices? After the president-elect announced his tariff intentions, Barron’s estimated “that a 10 [percent] tariff could raise the cost of a new car in the U.S. by 4 [percent] or 5 [percent] without any adjustments from auto makers. That was based [on] imports and where parts and cars are manufactured in North America. A 25 [percent] tariff on Canada and Mexico implies the price jump would be closer to 8 [percent],” reported Al Root of Barron’s.11
When countries fight by raising tariffs, it’s called a trade war.12
Weekly Focus – Think About It
“It is difficult to make predictions, especially about the future.”13
—Karl Kristian Steincke, Danish politician
* 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.macrotrends.net/2526/sp-500-historical-annual-returns
2 https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_Barrons_Data_2.pdf)
3 https://www.bloomberg.com/news/articles/2024-11-29/the-vintage-year-for-us-stock-markets-that-few-people-expected (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_Bloomberg_A%20Vintage%20Year_3.pdf)
4 https://www.msci.com/end-of-day-data-search (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_MSCI_End%20of%20Day%20Index%20Data%20Search_4.pdf)
5 https://www.barrons.com/articles/stock-market-rally-tech-nvidia-rates-304f6048 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_Barrons_Stock%20Market%20Isnt%20Just%20Big%20Tech_5.pdf)
7 https://finance.yahoo.com/personal-finance/what-is-a-tariff-194059448.html
8 https://trends.google.com/trends/explore?date=now%207-d&geo=US&q=what%20is%20a%20tariff&hl=en-US; https://trends.google.com/trends/explore?date=now%207-d&geo=US&q=who%20pays%20tariffs&hl=en-US; and https://trends.google.com/trends/explore?q=tarrifs&date=today%203-m&geo=US (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_Google%20Trends_8.pdf)
[1]1 https://www.barrons.com/articles/trump-tariffs-ford-gm-stock-030da5ef?mod=article_inline (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/12-02-24_Barrons_Why%20GM%20Stock%20Is%20Getting%20Crushed%20by%20Trump%20Tariff%20Threats_11.pdf)
[1]2 https://www.investopedia.com/terms/t/trade-war.asp [1]3https://quoteinvestigator.com/2013/10/20/no-predict/
The Markets
The post-election rally resumed.
Investors shook off concerns about interest rates and inflation, and U.S. stocks climbed higher last week. The Standard & Poor’s (S&P) 500 Index gained every day last week, and the rally wasn’t limited to a few popular stocks: 425 of the companies in the Index finished the week higher, according to Jacob Sonenshine of Barron’s.1
“Beneficiaries of the incoming administration’s looser regulation and business-friendly stance put forth strong showings this week. Stocks gained while [cryptocurrency] crushed doubters and the dollar extended gains into an eighth week, the currency’s longest run of the year. Blue chips and small caps led Friday’s equities advance as this year’s big tech winners struggled to gain ground,” reported Cristin Flanagan of Bloomberg.2
It has been a great year to own U.S. stocks. The S&P 500 is up more than 25 percent so far this year, performing significantly better than major indexes in Europe, Asia, and emerging markets, reported Lewis Krauskopf of Reuters.3 The catch is that markets are trading at heady valuations.
“…The broadening market can’t hide just how expensive stocks have become. The S&P 500 trades at 22.1 times 12-month forward earnings…the highest since 2020, when it hit 22.9 times. To see multiples meaningfully higher than that, one has to go back to the dot-com era, when the index traded at more than 25 times earnings,” reported Sonenshine of Barron’s.1
Not everyone had an appetite for risk last week. The price of gold, which many investors consider to be a safe haven when markets are volatile, rose amid escalating tensions in the Russia-Ukraine war, reported Yvonne Yue Li of Bloomberg.4
Major U.S. stock indices finished the week higher.5 Treasury yields were mixed last week with the yield on the benchmark 10-year U.S. Treasury moving lower over the week lower and the yield on the two-year U.S. Treasury moving higher.6
Data as of 11/22/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.7% | 25.2% | 31.0% | 8.4% | 13.9% | 11.2% |
| Dow Jones Global ex-U.S. Index | 0.3 | 4.2 | 10.3 | -1.8 | 2.8 | 2.2 |
| 10-year Treasury Note (yield only) | 4.41 | N/A | 4.4 | 1.6 | 1.8 | 2.3 |
| Gold (per ounce) | 4.8 | 29.7 | 35.2 | 14.1 | 13.0 | 8.5 |
| Bloomberg Commodity Index | 3.0 | 0.3 | -3.1 | -1.0 | 4.7 | -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.
HOW TO HAVE AN ESTATE OR TAG SALE. Estate and tag sales can be emotional experiences. Usually, these sales are scheduled around major life changes such as the need to:
- Relocate or downsize,
- Move to independent or assisted living, or
- Settle the estate of a loved one.
Organizing a sale is hard work, and parting with your belongings or those of a loved one is never easy, especially when they have sentimental value. That may be why many people opt to hire an estate planning company to manage these sales. The cost to do so is usually 30 percent to 40 percent of sale proceeds. However, estate sale companies “typically provide a gross sales minimum. This means that the total value of all the items to be sold must meet or exceed that value,” reported Doug Luftman of Trust & Will.7
The other option is to organize and hold the sale yourself. If you choose that route, here are three tips that can help make an estate sale successful.
- Hire an appraiser. As the Antiques Roadshow demonstrates, it is difficult to know the value of some items. Undervaluation applies to antiques and everyday items. For instance, the portable ultrasound your uncle bought when he was recovering from surgery, which has been gathering dust on the shelf ever since, may be worth a whole lot more than you think it is. An appraiser can help ensure you don’t undervalue sales items, reported Heidi Mitchell in AARP Magazine.8
- Promote the sale. Posting a hand-written sign near your sale site is unlikely to attract the number of buyers you need. Luftman recommended advertising your estate sale on social media sites and online marketplaces, as well as local newspapers.7 Mitchell suggested that the advertisements include hashtags for applicable key words. These may include #high-end, #designer, #one-of-a-kind, and #collectors.8
- Choose payment options carefully. Some estate sale shoppers will have cash, others will want to pay digitally. Think carefully about what types of payment you will accept and the tools you will need to accept them, reported Patrick Villanova and Arturo Conde in SmartAsset. For instance, you will need to have change and a lock box on hand for cash transactions, and an app on a phone or tablet for digital transactions.9
Organizing an estate sale on your own saves on cost, but requires planning and coordination, as well as a team to oversee the sale. Outsourcing the sale has a higher cost, but requires less time, effort, and emotional stress. Everyone needs to decide which approach is the best one for their situation.
Weekly Focus – Think About It
“Estate- and tag-sale companies mainly deal with two generations: homeowners born during the Great Depression…and boomers looking to pare down. The groups have different reputations in the business. Depression-era homeowners are known for their pack-rat behavior, and the boomers are known for just having a lot of really nice stuff—the result of having lived through the perfect time in history to consume amply in early adulthood.”10
—Lizzie Feidelson, The New Yorker
* 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/nvidia-earnings-great-for-stock-market-c9d870f2?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-25-24_Barrons_Why%20Nvidias%20Earnings%20Werent%20Great%20for%20Stocks_1.pdf)
2 https://www.bloomberg.com/news/articles/2024-11-21/stock-market-today-dow-s-p-live-updates?srnd=phx-markets (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-25-24_Bloomberg_Bets%20on%20Trump%20Put%20Send%20Stocks%2c%20Bitcoin%20Higher_2.pdf)
4 https://www.bloomberg.com/news/articles/2024-11-22/hedge-funds-slash-bullish-wagers-on-gold-before-war-jitters (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-25-24_Bloomberg_Hedge%20Funds%20Slash%20Bullish%20Wagers%20on%20Gold_4.pdf)
5 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/11-25-24_Barrons_Data_5.pdf)
7 https://trustandwill.com/learn/how-to-have-an-estate-sale?
8 https://www.aarp.org/money/budgeting-saving/info-2024/estate-sale-hosting-tips.html
9 https://smartasset.com/estate-planning/how-to-have-an-estate-sale [1]0https://www.newyorker.com/culture/on-and-off-the-avenue/the-wild-wonderful-world-of-estate-sales