The Markets
Rates moved lower and stocks moved higher.
In 2022, the United States Federal Reserve (Fed) began raising interest rates as it battled high rates of inflation. That year prices rose 8 percent, as measured by the Consumer Price Index. In 2023, prices increased more slowly (4.1 percent), but still advanced at a pace that was well above the Fed’s target of two percent.1 Last month, prices rose 2.5 percent annualized.2 And last week, the Fed decided it is time to change course.3
“On Wednesday, policymakers indicated their rate cut would likely be the first of several through the end of next year. The median forecast among members of the Federal Open Market Committee was that the benchmark federal-funds rate will be at 3.4 [percent] by the end of 2025, compared with the current targeted range of 4.75 [percent] to 5 [percent],” reported Elizabeth O’Brien and Shaina Mishkin of Barron’s. “This marks a significant shift. The Fed has moved from a phase when it kept rates high to combat inflation to one where it is lowering them to support the labor market and the broad economy.”4
As borrowing costs move lower, other interest rates are likely to follow. As a result, consumers, investors, and business owners may have opportunities to:
- Pay lower interest rates on auto and home loans,
- Refinance mortgages at lower rates, and
- Tap into home equity at a lower cost.
Major U.S. stock indices rose on Thursday, following the Fed’s rate cut. “The S&P 500 climbed 1.7 [percent]—notching its 39th record in 2024 and extending this year’s surge to about 20 [percent],” reported Rita Nazareth of Bloomberg. “The Fed’s bold start to cutting interest rates and its determination not to fall behind the curve re-ignited hopes the central bank will be able to avoid a recession. Data Thursday showing a slide in jobless claims to the lowest since May signaled the labor market remains healthy despite a slowdown in hiring.”5
Stocks gave back some gains on Friday but finished week higher.6 Yields on U.S. Treasuries were mixed over the week.7
Data as of 9/20/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.4% | 19.6% | 29.5% | 9.4% | 13.8% | 11.1% |
| Dow Jones Global ex-U.S. Index | 1.0 | 8.3 | 14.7 | -0.4 | 4.2 | 2.3 |
| 10-year Treasury Note (yield only) | 3.7 | N/A | 4.4 | 1.3 | 1.8 | 2.6 |
| Gold (per ounce) | 1.2 | 25.4 | 34.1 | 14.0 | 11.7 | 7.9 |
| Bloomberg Commodity Index | 2.1 | -0.5 | -8.5 | 0.7 | 4.4 | -1.9 |
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.
You’re Talking My Language! They say the only constant is change, and that’s certainly the case when it comes to language. Pronunciations, meanings and syntax often change gradually. However, some changes, especially when it comes to vocabulary, occur quite quickly.8 For instance, “social media,” “content curation,” and “influencers” are recent additions to the lexicon of American English. There is one aspect of language that has been modified by every generation—slang. See what you know about generational jargon by engaging with this brief quiz.
- Which term describes a person who is pretending to be someone else while chatting online?
- Goat
- Catfish
- Chameleon
- Octopus
- In the 1950s, when something was “radioactive,” it was:
- Exhausting
- Toxic
- Popular
- Crazy
- Which of these is not a choice example of 1980s slang?
- Wannabe
- Not even
- Psych
- Bae
- When you give someone the side-eye, what are you doing?
- Looking at them with suspicion
- Checking them out without being obvious
- Flirting with them
- Admiring their clothing or accessories
- If you’re feeling resentful or bitter, someone might accuse you of being:
- Blue
- Salty
- Sus
- Delulu
Weekly Focus – Think About It
“Slang is a language that rolls up its sleeves, spits on its hands and goes to work.”9
—Carl Sandburg, poet
Answers: 1) b10 2) c11; 3) d12; 4) a13; 5) b14
* 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://fred.stlouisfed.org/series/FPCPITOTLZGUSA
2 https://www.bls.gov/news.release/cpi.nr0.htm
3 https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm
4 https://www.barrons.com/articles/rate-cut-savings-yields-what-to-do-c0833d40 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-23-24_Barrons_Rate%20Cut%20Brings%20a%20New%20Day_4.pdf)
5 https://www.bloomberg.com/news/articles/2024-09-18/stocks-bonds-rangebound-as-traders-digest-fed-cut-markets-wrap?srnd=undefined (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-23-24_Bloomberg_S&P%20500%20Hits%20Record%20High%20Buoyed%20by%20Economic%20Hopes_5.pdf)
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-23-24_Barrons_Data_6.pdf)
8 https://www.britannica.com/topic/language/Linguistic-change
9 https://www.goodreads.com/author/quotes/16380.Carl_Sandburg?page=6
[1]0 https://www.merriam-webster.com/dictionary/catfish
[1]1 https://www.yourdictionary.com/articles/1950s-slang
[1]2 https://www.dictionary.com/browse/bae#
[1]3 https://www.merriam-webster.com/dictionary/side-eye [1]4https://www.merriam-webster.com/dictionary/salty
The Markets
There was a lot of good news last week!
Inflation continued to trend lower. The Consumer Price Index showed that inflation was 2.5 percent year over year (yoy) in August. That’s lower than economists had expected, and a significant decline from July’s 2.9 percent.1, 2
Food and energy prices have been falling faster than some other prices because the core CPI, which excludes food and energy, showed a 3.2 percent increase over the last 12 months. The biggest price increases were for shelter (+5.2 percent yoy) and automobile insurance (+16.5 percent yoy).1
Consumers are happier. The University of Michigan’s Consumer Sentiment Survey found that optimism is on the rise. “Year-ahead expectations for personal finances and the economy both improved as well, despite a modest weakening in views of labor markets. Sentiment is now about 40 [percent] above its June 2022 low, though consumers remain guarded as the looming election continues to generate substantial uncertainty,” reported Surveys of Consumers Director Joanne Hsu. “Year-ahead inflation expectations fell for the fourth straight month, coming in at 2.7 [percent].”3
Household net worth is up in the United States. Last week, the Federal Reserve reported on the financial well-being of households and nonprofit organizations at the end of June 2024.4 Over the last decade household and nonprofit net worth has risen from $85 trillion (2Q 2014) to $164 trillion (2Q 2024).5 Vince Golle of Bloomberg reported:
“U.S. household wealth reached a fresh record in the second quarter, fueled by a steady rise in the value of real estate and Americans’ stock holdings…The value of real estate held by households climbed about $1.75 trillion, the most in a year, while the value of equity holdings rose about $662 billion.”6
It’s important to note that not all Americans participate equally as wealth grows. The top 10 percent of households hold 67 percent of all household wealth, while the bottom 50 percent hold just 2.5 percent, according to the St. Louis Federal Reserve.7
Stocks and bonds had a good week. Last week, major U.S. stock indices moved higher,8 and U.S. Treasury bonds rallied as yields on all maturities of Treasuries moved lower.9
Data as of 9/13/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 4.0% | 18.0% | 25.9% | 8.0% | 13.3% | 11.0% |
| Dow Jones Global ex-U.S. Index | 1.2 | 7.3 | 14.3 | -1.7 | 3.9 | 2.1 |
| 10-year Treasury Note (yield only) | 3.65 | N/A | 4.3 | 1.3 | 1.9 | 2.6 |
| Gold (per ounce) | 2.8 | 23.9 | 34.6 | 12.8 | 11.4 | 7.6 |
| Bloomberg Commodity Index | 2.6 | -2.5 | -10.1 | -0.5 | 4.1 | -2.3 |
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.
WHICH IS MORE POPULAR: BUTTER, ICE CREAM, YOGURT OR CHEESE? My best guess was ice cream, but that’s not the case. Ilena Peng of Bloomberg explained, “America’s per capita cheese consumption has more than doubled since the government began keeping track in 1975, to about 42 pounds a year—more than all the butter, ice cream and yogurt combined.”10
When it comes to dairy products, cheese is the big cheese. As milk consumption has declined, cheese eating has accelerated. According to the United States Department of Agriculture (USDA), rising demand for cheese has become “one of the most important forces shaping the U.S. dairy industry.”11
The popularity of cheese owes much to the pandemic, according to Bloomberg’s Peng. It may be that working from home improved proximity to refrigerators or that efforts to recreate favorite restaurant meals elevated demand for cheesy goodness.10
Either way, the global market for cheese is growing, and the cheese snack market is expected to expand “at a compound annual growth rate of 6.5 [percent] through 2034,” reported Corey Geiger, Abbi Prins and Billy Roberts for the CoBank Knowledge Exchange.12 According to one company’s survey, the most-produced, top-selling, and most widely eaten cheeses in the U.S. include:13
- Cheddar,
- Mozzarella,
- Parmesan,
- American, and
- Cream cheese.
That list did not include cottage cheese, which has been having a moment on social media. “People have taken to [a social media site] to show how cottage cheese can be used in better-for-you recipes, with creative dishes like viral cottage cheese flatbread and ice cream. At-home followers looking to recreate these recipes have helped cottage cheese boost dairy sales,” reported Gabriela Barkho of Modern Retail. “According to Circana data from May, cottage cheese sales were up 13.5 [percent] year-over-year, up to $1.33 billion.”14
What’s your favorite cheese?
Weekly Focus – Think About It
“A cheese may disappoint. It may be dull, it may be naive, it may be oversophisticated. Yet it remains cheese, milk’s leap toward immortality.”15
—Clifton Fadiman, television and radio personality
* 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.bls.gov/news.release/cpi.nr0.htm
2 https://www.bls.gov/opub/ted/2024/the-consumer-price-index-rose-2-5-percent-over-the-past-year.htm
3 http://www.sca.isr.umich.edu
4 https://www.federalreserve.gov/releases/z1/20240912/html/recent_developments.htm
5 https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-16-24_Bloomberg_US%20Household%20Net%20Worth%20Climbs%20to%20Record%20on%20Home%20Values%20Stocks_5.pdf)
7 https://www.stlouisfed.org/institute-for-economic-equity/the-state-of-us-wealth-inequality (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-16-24_Barrons_Data_7.pdf)
8 https://www.barrons.com/market-data
9 https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202409 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-16-24_Bloomberg_The%20Average%20American%20Eats%2042%20Pounds%20of%20Chees%20a%20Year_9.pdf)
[1]1 https://www.ers.usda.gov/topics/animal-products/dairy/background/
12 https://www.cobank.com/knowledge-exchange/dairy/dairy-products-have-more-growth-potential#:~:text=Globally%2C%20the%20cheese%20snack%20market,of%20the%2015%20dairy%20categories (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-16-24_Modern%20Retail_TikTok%20Ignited%20a%20Cottage%20Cheese%20Renaissance_12.pdf)
[1]3 https://www.cellocheese.com/most-popular-cheeses/
[1]4 https://www.modernretail.co/marketing/tiktok-has-ignited-a-cottage-cheese-renaissance/#:~ [1]5https://www.goodreads.com/quotes/tag/cheese?page=5
The Markets
Investing in September can be like biting into a jelly doughnut and finding boiled cabbage—full of unwelcome surprises.
“History suggests September is the worst month of the year in terms of stock-market performance,” reported Isabel Wang of Morningstar. The Standard & Poor’s (S&P) 500 Index “has generated an average monthly decline of 1.2%…dating back to 1928, according to Dow Jones Market Data.”1
One reason for the sharp stock market decline last week appeared to be concerns that the Federal Reserve may have waited too long to lower rates. During the week, economic data continued to present a mixed picture of the U.S. economy. The employment report released on Friday showed the United States added about 142,000 jobs in August—a significant increase from July—and that average hourly earnings were up 3.8 percent year over year. In addition, the unemployment rate ticked lower to 4.2 percent.2
However, the report wasn’t quite as rosy as those numbers suggest. Fewer jobs were created than economists had predicted and “downward revisions from the two previous months suggest that the labor market is cooling faster than the initial data may indicate,” reported Lauren Kaori Gurley and Rachel Siegel of The Washington Post.3
The information has some pundits speculating that Fed officials may opt for a larger rate cut than originally anticipated at the Fed meeting in September, according to CME FedWatch.4 On Friday, Federal Reserve Governor Christopher Waller said he support a September rate cut and was “open-minded about the size and pace of those reductions,” reported Ann Saphir of Reuters.5
In recent weeks, investors have been feeling quite bullish, according to the AAII Sentiment Survey. During the last two weeks of August, more than 50 percent of survey participants indicated they expected the stock market to rise over the subsequent six months. The level of optimism among survey participants came close to the survey’s all-time high (52.9 percent on December 20, 2023) and remained well above the historical average of 37.5 percent.6
Last week, investor sentiment shifted. Fewer participants were bullish – and fewer participants were bearish.6 The number of respondents who were neutral increased, which means they think stock prices will remain relatively unchanged over the next six months.7
By the end of last week, major U.S. stock indices had moved lower, while bond markets rallied.8 U.S. Treasury yields fell across the yield curve9 and finished the week with the yield on the benchmark 10-year U.S. Treasury above the yield on the 2-year U.S. Treasury for the first time since July 2022, reported Connor Smith of Barron’s.10
When markets are volatile, as they were last week, it’s normal for investors to worry. Before making any changes in response to short-term market fluctuations, remember that historical performance supports the idea that staying invested is a sound way to pursue long-term financial goals. If you have any questions about recent market volatility or your investments, please get in touch.
Data as of 9/6/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -4.3% | 13.4% | 21.1% | 6.2% | 12.7% | 10.5% |
| Dow Jones Global ex-U.S. Index | -2.5 | 6.1 | 12.8 | -2.4 | 3.9 | 1.8 |
| 10-year Treasury Note (yield only) | 3.7 | N/A | 4.3 | 1.4 | 1.6 | 2.5 |
| Gold (per ounce) | -0.3 | 20.6 | 30.4 | 11.2 | 10.5 | 7.1 |
| Bloomberg Commodity Index | -2.5 | -5.0 | -11.9 | -0.7 | 3.8 | -2.8 |
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.
THE STRANGE STORY OF TRANSPARENT MICE. A big challenge for medical and biological researchers is an inability to see inside living creatures. Sophisticated imaging techniques are helpful, but they don’t always provide a clear picture. That may be about to change. Researchers at Stanford University:
“…found that a yellow food dye called tartrazine, used to color everything from M&Ms to Gatorade, can, if applied to the skin of a live mouse, make the tissue transparent. The effect was pronounced enough for researchers to see blood vessels beneath the animal’s scalp, some of its abdominal organs and a number of the more delicate muscles in its legs—sights hitherto only directly visible through dissection. When the dye was washed off, the skin’s natural opacity returned,” reported The Economist.11
Why does yellow food dye make it possible to see through mouse skin? In general, skin is opaque because fats, protein, and water scatter light and prevent it from passing through the skin. Food dyes are great light absorbers. As a result, a combination of tartrazine and water applied to mouse skin helps light travel more directly through the skin, making it transparent.11
The discovery may have a wide variety of applications, according to a source cited by Carolyn Y. Johnson of The Washington Post. The technique could someday help researchers:12
- Observe brain activity;
- Diagnose deep tumors without surgery;
- Locate veins more easily for IVs and blood draws; and
- Make cosmetic procedures (like tattoo removal) more precise.
The lead researcher on the study, which was published in the print issue of the journal Science on September 6, Dr. Zihao Ou told The Economist, “It will take more work before humans are added. As human skin is ten times thicker than that of mice, replicating the tetrazine experiment would require far longer application periods…It is also unclear just how reversible such a process would be.”11
Clearly, there is more work to be done!
Weekly Focus – Think About It
“The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.”13
—Marcel Proust, novelist
* 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:
2 https://www.bls.gov/news.release/pdf/empsit.pdf
3 https://www.washingtonpost.com/business/2024/09/06/august-jobs-unemployment-labor-market/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_The%20Washington%20Post_3.pdf)
4 https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
6 https://www.aaii.com/sentimentsurvey (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_AAII%20Investor%20Sentiment%20Survey_6.pdf)
7 https://www.aaii.com/latest/article/234628-aaii-sentiment-survey-neutral-sentiment-rises
8 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_Barrons_Data_8.pdf)
10 https://www.barrons.com/livecoverage/stock-market-today-090624?mod=article_inline (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_Barrons_The%20Yield%20Curve%20Finally%20Closed%20Normal_10.pdf)
11 https://www.economist.com/science-and-technology/2024/09/05/a-common-food-dye-can-make-skin-transparent (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_The%20Economist_A%20Common%20Food%20Dye%20Can%20Make%20Skin%20Transparent_11.pdf)
12 https://www.washingtonpost.com/science/2024/09/05/see-through-transparent-mice-food-dye/?_pml=1 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-09-24_The%20Washington%20Post_Scientists%20Use%20Food%20Dye%20in%20Doritos%20to%20Make%20See-Through%20Mice_12.pdf)
[1]3 https://www.brainyquote.com/quotes/marcel_proust_107111?src=t_discovery
The Markets
After gyrating wildly throughout the month, major U.S. stock indexes finished August higher.
Despite a lot of uncertainty and some dramatic ups and downs, the Standard & Poor’s (S&P) 500 Index rose 2.3 percent in August, while the Dow Jones Industrial Average gained 1.8 percent to close at a record high. It was the fourth consecutive month of gains for both indexes, reported Connor Smith of Barron’s.1
The month’s most remarkable comeback belonged to the Nasdaq Composite Index which eked out a 0.6 percent gain for the month. “That’s a shocking turnaround, given the Nasdaq entered correction territory early in the month…,” reported Smith.1 (A correction is a decline of at least 10 percent.2)
As sentiment calmed, the CBOE Volatility Index (VIX), which gauges how volatile investors expect the market to be over the next 30 days, moved lower. “Wall Street’s ‘fear gauge’—the VIX—dropped to 15. That’s after an unprecedented spike that took the index above 65 during the Aug. 5 market selloff,” reported Rita Nazareth of Bloomberg.3
Why did investors regain their confidence?
There was some good economic news last week that proved to be just what markets were hoping to see. The data were strong enough to allay fears the economy might weaken too fast, but not so strong they might cause the U.S. Federal Reserve (Fed) to change its mind about lowering the federal funds rate in September. Here’s what happened:
- The economy remains steady. Investors have been worried U.S. economic growth might be slowing more quickly than previously thought. Those concerns were soothed when the Bureau of Economic Analysis revised its estimate for gross domestic product (GDP)—which is the value of all goods and services produced in the U.S. —from April through June.4 “The U.S. economy grew faster than initially thought in the second quarter amid strong consumer spending, while corporate profits rebounded, which should help to sustain the expansion,” reported Lucia Mutikani of Reuters.5
- Inflation continues to soften. On Friday, one of the Fed’s favored inflation gauges—the personal consumption expenditures (PCE) price index—showed headline inflation was 2.5 percent year over year. Core inflation, which excludes volatile food and energy prices, was up 2.6 percent year over year.6 “The soft price growth continues a recent stretch of cooler inflation readings and falls in line with what Fed officials were hoping to see before easing their restrictive monetary-policy stance,” reported Megan Leonhardt of Barron’s.7
Last week, major U.S. stock indices moved higher.1 Yields for U.S Treasuries with shorter maturities moved lower over the week, while yields for longer maturities moved higher.8
Data as of 8/30/24 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 0.2% | 18.4% | 25.1% | 7.6% | 14.1% | 10.9% |
| Dow Jones Global ex-U.S. Index | 0.4 | 8.8 | 14.3 | -0.8 | 5.0 | 2.1 |
| 10-year Treasury Note (yield only) | 3.9 | N/A | 4.1 | 1.3 | 1.5 | 2.4 |
| Gold (per ounce) | 0.1 | 20.9 | 29.4 | 11.5 | 10.5 | 6.9 |
| Bloomberg Commodity Index | -0.4 | -2.6 | -9.5 | 0.0 | 4.5 | -2.6 |
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.
WE JUST WANT TO HAVE FUN! When you live a busy and sometimes stressful life, play can be important for your health. Adam Piore of Newsweek reported, “A weighty and growing body of evidence—spanning evolutionary biology, neuroscience and developmental psychology—has in recent years confirmed the centrality of play to human life. Not only is it a crucial part of childhood development and learning but it is also a means for young and old alike to connect with others and a potent way of supercharging creativity and engagement.”9
The idea dovetails with a cultural trend known as “kidulting.” The Economist reported on the rise of kidulting, “…where adults engage in lighthearted activities traditionally designed for children…a giant ball pit for adults in three British cities, welcomes 25,000 visitors each month. Even museums and immersive exhibitions typically aimed at actual children now host adult-only evenings…Enthusiasts say that such spaces heighten creativity, human connection and joy, triggering the pleasure-seeking chemical [dopamine].”10
New museums have popped up to help adults unleash their inner child. For example, the Museum of Ice Cream offers a fun-dae out for adults (children are welcome, too). They can frolic in pools of artificial ice cream sprinkles, engage with themed playscapes, and eat ice cream.11
The WNDR Museum offers a completely different kind of fun. It engages visitors through interactive experiences with installations like The Wisdom Project that asks visitors to answer the question, “What do you know for sure?” and requests that they consider what information is important enough to put out into the world.12 Museum visitors also can use imagination to create AI-generated artwork13 or visit the Quantum Mirror, “an infinity room with over 150 mirrors that touches on our interaction with technology. Our obsession with screens, the way that our self-perception has changed as social media has become more popular in our society.”14
The National Institute for Play cautions that, while play is important for adults, what one person embraces as play may be an annoyance to another.15 Instead of interactive museums, your jam may be a fantasy football league, a book club or a hike in the woods. What do you do just for the fun of it?
Weekly Focus – Think About It
“It’s very important that we re-learn the art of resting and relaxing. Not only does it help prevent the onset of many illnesses that develop through chronic tension and worrying; it allows us to clear our minds, focus, and find creative solutions to problems.”16
–Thich Nhat Hanh, Buddhist monk and author
* 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/livecoverage/stock-market-today-083024?mod=article_inline (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-03-24_Barrons_Dow%20Snags%20Record%20Close%20as%20Index%20Marks%20Fourth%20Monthly%20Gain_1.pdf)
2 https://www.investopedia.com/terms/c/correction.asp
3 https://www.bloomberg.com/news/articles/2024-08-29/stock-market-today-dow-s-p-live-updates (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-03-24_Bloomberg_S&P%20500%20Spikes%20in%20Last%2010%20Minutes%20of%20US%20Trading_3.pdf)
4 https://www.bea.gov/sites/default/files/2024-08/gdp2q24-2nd.pdf
6 https://www.bea.gov/news/2024/personal-income-and-outlays-july-2024
7 https://www.barrons.com/livecoverage/july-pce-inflation-report-release-today (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-03-24_Barrons_Dow%20Snags%20Record%20Close%20as%20Index%20Marks%20Fourth%20Monthly%20Gain_1.pdf)
[1]0 https://www.economist.com/culture/2023/08/15/the-rise-of-kidulting (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/09-03-24_Economist_Rise%20of%20Kidulting_10.pdf)
[1]1 https://www.museumoficecream.com
[1]2 https://wndrmuseum.com/installation/the-wisdom-project-boston/
[1]3 https://wndrmuseum.com/installation/untitled-by-you-boston/
[1]4 https://wndrmuseum.com/installation/quantum-mirror/
[1]5 https://nifplay.org/play-for-you/make-play-part-of-an-adult-life/ [1]6https://www.brainyquote.com/quotes/thich_nhat_hanh_531578