Private: Wealth in a changing world
As you work to build a financial future for yourself and the ones you love, it is beneficial to have perspective on the world around you and the outside factors that may impact how your wealth can grow and thrive in a global economy.
March was yet another interesting month for the U.S. Unemployment came in at 4.2%, ticking up a bit from February’s 4.1% (still decent for businesses looking for help and near historical lows). Inflation (CPI) ticked up a little year over year to % in February versus the prior month of 2.8% (experts said this wouldn’t happen for years, odd) and still in the right direction for the Fed’s target of 2% vs highs of 9.1% in 2022. We could see mortgage interest rates drop by as much as 1% by the end of the year as the economy continues to slowly expand. The talking heads are at it again.
Are we headed for a recession? The U.S. economy closed 2024 29.7 trillion dollars, https://fred.stlouisfed.org/series/GDP. If we do have a recession, what will it look like with an economy humming along at 29.7+ trillion dollars, unemployment at 4.2% (most economists saying this is full employment), inflation growth down 53.8% from highs, and oh, even with most analysts projecting a slowdown to 1.5% economic growth (445.5 billion in growth!!!) that still out paces Europe by 20%+ based on the 4th quarter’s results. I don’t really know, but it doesn’t look like anyone will be too hard pressed finding a job and although the cost of things haven’t gone backward (they rarely ever do) the rate of increase still appears to have fallen off a truck and is rolling downhill.
On the international front, thoughts of recession are still out there, and we are seeing some signs of stability with some growth here and there. The Eurozone’s Markit PMI Manufacturing (purchases managers index) came in at 48.6 for March just a touch below last month (not bad), CPI Harmonized (inflation) year over year came in at 2.2% for March below the prior month (very good), and unemployment for February came in at 6.1% a bit lower than January (another good sign). In Asia Pacific economies, Japan’s PMI Services came in at 50 for March (at 50 has to be pretty good), and Industrial production came in at 2.3% for February a bit lower than the prior month (positive is good). China’s PMI Service for March came in at 51.9 (above 50 means growth) and the CPI (inflation) came in at -.1% year over year for March (slowing inflation can be good for everyone). Australia’s business confidence ticked lower to -2.5 (not great). As a result of U.S. companies deriving 40% +/- of earnings from outside this country and the current strength of the U.S. economy, I still feel investment in stocks will continue to favor the U.S. in the coming months, with most markets outside the U.S. continuing to play catch up.
The market (measured by the S&P 500 ETF, SPY) settled more -5.85% +/- in March, adding to February’s -1.27+/-, and off -4.55% +/- for 2025 (Not the greatest of starts but fair based on two fantastic years in a row.). Markets are even more attractive with upside back in view and valuations more on trend than above. At AWMS, we still own equities/stocks for the same reasons we always have for their long-term growth and consistent dividend cash flow. Although markets can be volatile at times, dividend and interest payments continue to pour in like Cumberland Falls.
Please continue to make healthy decisions like washing your hands, getting plenty of sleep, eating balanced meals, staying hydrated, and taking a stroll if you feel like it. Reach out to a friend or loved one and have a great conversation.
Until next time, be well and keep putting one foot in front of the other. If you are not a client and would like to receive our newsletter or our monthly blog update, please use the contact tab on our website and drop us an email.
Sincerely,
Thaddeus D. Phelps, CEO/CIO
PS: Understanding what you are paying for advisory services can be important. Our advisory services are priced in the medium-to-low range. If the postings on your statements under “Transaction Details” and labeled “MGMTFEE ADVISOR” are not adequate, we do create reports on our portal at awm-s.com for your convenience. Please reach out to srphelps@awm-s.com if you have any questions.
This commentary on this website reflects the personal opinions, viewpoints and analyses of an Advance Wealth Management Service, LLC employee, and should not be regarded as a description of advisory services provided by Advance Wealth Management Service, LLC or performance returns of any Advance Wealth Management Service, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advance Wealth Management Service, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.