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.
June was yet another interesting month for the U.S. Unemployment: ticked down last month to 4.2% for June (basically full employment). Inflation (CPI) ticked down a bit to 3.5% (down 16.7% from last month) for June (mostly due to oil prices and should reverse course significantly in the coming months) and is still trending in the direction of the Fed’s target of 2% vs highs of 9.1% in 2022. I still believe mortgage interest rates will continue to drop in the coming months as demand is plagued by high interest rates and real estate prices (they are lower than this time last year). Interesting fun fact (a little in the weeds): Most of the conversation with thetalking heads this past month centered around the effects inflation will have on interest rates and the Fed. Assuming the continued opening of the Strait of Hormuz and for oil (energy prices) to continue to slide month over month (roughly 10% of inflation), real estate prices (housing roughly 30% of inflation) across the country continuing to cool, https://fred.stlouisfed.org/series/CSUSHPINSA, and the US having some of the highest interest rates in the world (Eurozone at 2.4% vs USA at 3.75%), it seems highly unlikely that interest rates, set by the Federal Reserve, will rise and have a greater likelihood to go lower in the next 12 months.
On the international front, thoughts of growth are starting to fill the air with oil prices causing some uncertainty regarding continued momentum. The Eurozone’s unemployment is sitting at 6.2% pretty close to the lowest it has been in 5 years (historically a pretty fair number, oddly enough almost 50% higher than the US) and CPI (Consumer Price Index/inflation) for May at 3.2% year over year (oil prices starting to factor into this number). In Asia Pacific economies: Japan’s unemployment at 2.5% for May (a pretty good number for them) and the CPI came in 1.5% for May year over year (lower number, interesting with oil in play). China’s CPI (inflation) year over year came in at 1% for June (definitely helping the global inflation story) and unemployment in June came in at 5% (decent number for them). Australia’s Unemployment ticked down to 4.4% for May (a pretty good spot to be at for them) and CPI at 3.8% year over year (cooling off the last couple months). 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. over the long run with most markets outside the U.S. continuing to play catch-up.
The market (measured by the S&P 500 ETF, SPY) was off by -1.28% +/- in June, bringing us to a still blazing 9.51% +/- year to date for 2026 and a fantastic start. I believe market valuations have moved back to a little on the pricey side of things with more volatility to come and a slow summer ahead. 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 Giessbach 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 on average. 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 monthly. Please reach out to srphelps@awm-s.com if you have any questions or would like a copy sent.
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 has no guarantee of future results.