Happy Friday, September 27th!
Job reports are looking up, and interest rates are coming down. Retirement planning missteps to avoid. A bookworm’s ideal vacation concept and voting from new heights.
#1 – Weekly Market Recap
Investors appeared to remain optimistic this week based on the belief that the Federal Reserve will continue cutting interest rates and, as a result, the US economy is headed for a soft economic landing. This sentiment was bolstered by this week’s data release of jobless claims personal consumer expenditures (Fed’s preferred inflation measurement) and durable goods orders – each of which was better than forecast.
Through Thursday’s market close, the Nasdaq led the way, driven by strong performance from the tech sector, particularly semiconductors. The Nasdaq is up +1.6% for the week. Both the S&P 500 and the Dow Jones also rose for the week, up +0.8% and 0.3% respectively.
This week China announced a $142 billion capital injection to incentivize large banks to loan more money and stimulate the economy. On Wednesday, Chinese stocks surged +4% and rebounded from their lowest levels since January 2019. Even with this week’s stock surge, the Chinese Shanghai Index is only up +3.7% in 2024. The full impact of China's central bank plan on the broader economy has yet to unfold, but investor sentiment appears to be growing increasingly optimistic.
Markets appear poised to end the week on a positive tone. However, we wouldn’t be surprised to see investors settle into a neutral position to end the week as attention turns to next week’s release of updated manufacturing, services and unemployment data.
#2 – Heading into the 4th Quarter
The fourth quarter begins in just four days. Despite a volatile summer, stock markets sit near all-time highs. A whirlwind of new information will be delivered within the next six weeks including two jobs reports, Q3 earnings season, and a Presidential election.
Labor market data has become a focal point for investors serving as an important guide of consumer health and the Federal Reserve’s ability to cut interest rates. With the labor market showing signs of continued moderation, jobs data released on Oct. 4th and November 1st will provide key data points for the Federal Reserve and investors alike.
Third quarter earnings season begins in just two weeks with US banks unofficially kicking off the season October 11th. Over the course of the summer, S&P 500 earnings per share (EPS) growth estimates for 2024 slipped modestly from +9.8% to +8.8%. Investors will use Q3 earnings results to see if corporate earnings growth continues to moderate.
Grabbing most of the headlines is the Presidential election in just 6 weeks. To help investors analyze the potential election impact on stocks, Goldman Sachs grouped stocks from various sectors into “Republican” and “Democratic” baskets. The “Republican” basket includes companies in areas such as construction, energy, and financials while the “Democratic” basket includes companies in areas such as infrastructure, renewables and health care.
At DSG Capital Advisors, we created the chart below representing the performance of those baskets of stocks this year. We will be closely monitoring to see if this year’s trend continues or if there is a reversal after the election.
#3 – How Perfection Can Derail Retirement
We are providing highlights of an article first published by Forbes Media, LLC, on 9/18/24,as we see many investors struggling with the timing of their investment decisions. The suggestions below cover the issues we encounter most often.
The pursuit of perfection can cause investors to delay the important planning necessary to prepare for their financial future. Following are five missteps that investors should avoid when planning for retirement:
- Waiting for the perfect time to invest: Keeping more than 3 to 6 months’ worth of emergency cash in reserves may not be prudent for many investors. Trying to time the market often leads to missed opportunities.
- Searching for the perfect investment:Every investment carries risk. Most often, higher returns require a higher level of risk. Generally, it is more advantageous to develop a strategy of several types of investments that balance risk across asset type, liquidity profile and return characteristics.
- Buying at the best price: If you have a prudent investment strategy in place, and ease into that strategy over time, it is often better than waiting for the investment to reach a specific price target.
- Implementing the perfect portfolio: There are multiple ways to achieve your investment goals. It is often better to implement a well-reasoned portfolio strategy over time than wait while trying to create the perfect portfolio strategy.
- Don’t let the tax tail wag the investment dog:Taxes are an integral part of an investment strategy. However, don’t focus on the taxes to the extent it leads to sub optimal investment decisions. Don’t be afraid to take profits and work to harvest losses to offset capital gains.
At the end of the day, the simple act of getting started on an investment strategy is often the hardest part of any financial plan. It’s often best to make progress and adjust along the way.
Source: Forbes
#4 – Bookstore Airbnb
Many of us are familiar with Airbnb, which provides rental accommodations for vacations, work trips or relocation, with all the comforts of home on the road. However, did you know that you can not only spend the night at the “world’s only book shop Airbnb” but also run the store during the day?
The coastal Scottish village of Wigtown is known as “Scotland’s National Book Town,” and one of its charming second-hand bookshops—The Open Book—rents out its upstairs flat and allows guests to live their dream of owning their very own bookstore.
According to Airbnb, this is the “first ever bookshop residency experience” and is so popular that there is a two-year waiting list. The Airbnb listing describes the property as “Nestled in the pristine surroundings of Galloway, The Open Book is a charming bookshop and apartment, situated on the main street of Wigtown. A holiday home with a difference, it presents a unique opportunity for visitors to run a real bookshop at the heart of the town’s vibrant community.”
During their stay, guests are free to make the store their own by changing displays, re-categorizing and pricing books. Two friends who recently traveled from Hong Kong came with a creative theme in mind. Since September 18th is the Mid-Autumn Festival in China, they decided to share the cultural celebration at the bookshop, decorating the shop accordingly and bringing traditional Chinese moon cakes to share with store guests.
The shop is the brainchild of Jessica Fox, and proceeds from the annual rentals contribute over $10,000 annually to The Wigtown Festival Company’s charitable work. Said Fox, “I thought I couldn’t be the only crazy American who dreams of working in a bookshop by the sea in Scotland; there has to be more of us.”
Source: Good News Network
Source: Airbnb
#5 – Voting from Space
As the 2024 election approaches, a unique group of voters is preparing to cast their ballots from an extraordinary location — space. Boeing Starliner astronauts Butch Wilmore and Suni Williams are set to vote in space from more than 200 miles above Earth, aboard the International Space Station (ISS).
Originally scheduled for an 8-day mission, Wilmore and Williams’ stay has extended to 8 months, making them part of a long-standing tradition of astronauts voting from space. NASA has facilitated this process since 1997, ensuring that even those on critical missions can participate in elections.
According to NASA, the ballots are encrypted and uploaded into the computer system on the ISS. After the ballot is filled out, it is sent back down to a ground antenna in New Mexico. Then NASA transfers the ballot to the Johnson Space Station in Houston, TX where it is sent to the county clerk who is responsible for casting the vote.
Voting from space takes absentee voting to new heights!
Source: Toledo Television Station WTOL 11, 9/24/24
Have a great weekend!
Denver and the DSG Capital Advisors Team