The Markets
Are you feeling optimistic or pessimistic?
Consumers are a force to be reckoned with – and we’re all consumers. We buy coats and tweezers, electricity and bread, screens and fishing poles. We download apps and games and educational materials. As consumers, we are vital to the American economy. In fact, consumer spending accounts for about two-thirds of the U.S. economy when it’s measured using gross domestic product or GDP.
Many consumers are feeling more optimistic than they have in a while. Last week, the University of Michigan (UM) reported that consumer sentiment is soaring. After a double-digit rise in December 2023, the UM Consumer Sentiment Index rose an additional 13% in January 2024. Surveys of Consumers Director Joanne Hsu reported:
“Over the last two months, sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as a recession ended. For the second straight month, all five index components rose, with a 27% surge in the short-run outlook for business conditions and a 14% gain in current personal finances. Like December, there was a broad consensus of improved sentiment across age, income, education, and geography.”
Investors are feeling pretty good, too. Throughout January, the weekly AAII Investor Sentiment survey found that a higher percentage of investors than usual expected stocks to move higher over the next six months. Last week, though, that percentage dropped lower as uncertainty increased around the depth and timing of possible Federal Reserve rate cuts.
“…the median projection from all Fed officials [is] for three rate cuts in 2024. That is a more conservative outlook than the one shared by investors, who expect six cuts starting in March,” according to a source cited by Jennifer Schonberger of Yahoo! Finance.
Last week, a rally in technology stocks helped the Standard & Poor’s 500 Index close at an all-time high. Yields on many maturities of Treasuries moved higher over the week.
| Data as of 1/19/24 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|---|---|
| Standard & Poor's 500 Index | 1.2% | 1.5% | 24.1% | 8.4% | 13.0% | 10.1% |
| Dow Jones Global ex-U.S. Index | -2.2 | -3.2 | 2.5 | -3.3 | 2.8 | 1.3 |
| 10-year Treasury Note (yield only) | 4.2 | N/A | 3.4 | 1.1 | 2.7 | 2.8 |
| Gold (per ounce) | -1.3 | -2.4 | 5.7 | 3.4 | 9.7 | 4.9 |
| Bloomberg Commodity Index | -1.2 | -1.9 | -13.5 | 6.5 | 3.9 | -2.5 |
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, 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 Biggest Election Year in History
This year almost 80 countries will hold elections in which all people of voting age will have the opportunity to cast a vote, reported NPR citing The Economist. While the nations are not all democratic countries, more than 40 are expected to hold free and fair elections, reported Astha Rajvanshi and Yasmeen Serhan of Time. These nations encompass about 41% of the world’s population (more than 3 billion people) and 42% of the global economy (more than $44 trillion).
How Many People Will Actually Vote?
The voter turnout is likely to be higher in some countries than it is in others. Here is the average turnout among the voting-age population in a sampling of countries that will hold elections in 2024. (The data was collected from recent election years by Pew Research Center.)
- Turkey: 89%
- Indonesia: 82%
- Sweden: 80%
- Belgium: 78%
- South Korea: 77%
- Denmark: 76%
- Brazil: 74%
- Taiwan: 74%
- India: 69%
- Mexico: 66%
- Austria: 64%
- United States: 63%
- Britain: 62%
- Czech Republic: 62%
- South Africa: 47%
The U.S. League of Women Voters explains the importance of voting like this: “The right to vote is one of the most basic promises of our democracy. In a democratic government, every person is considered equal and is empowered to both participate in their government and speak on the issues that impact their daily lives. Through our votes, we’re able to express our values around concerns like health care, climate change, criminal justice, taxes, and so much more.”
Weekly Focus – Think About It
“Indecision may or may not be my problem.”
—Jimmy Buffett, singer
Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management
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- 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. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
- 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 afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
- 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 DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
- 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.
- 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.
- You cannot invest directly in an index.
- Stock investing involves risk including loss of principal.
- The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted and are subject to change. Investing involves risk including loss of principal.
- The Price-to-Earning (P/E) ratio is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means investors are paying more for each unit of net income, thus, the stock is more expensive compared to one with a lower P/E ratio.
- These views are those of Carson Group Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
- This newsletter was prepared by Carson Group Coaching. Carson Group Coaching is not affiliated with the named broker/dealer.
- The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
- Consult your financial professional before making any investment decision.
Sources:
https://fred.stlouisfed.org/series/DPCERE1Q156NBEA#0
https://www.aaii.com/sentimentsurvey
https://www.bloomberg.com/news/articles/2024-01-18/stock-market-today-dow-s-p-live-updates?srnd=premium (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/01-22-24_Bloomberg_S&P%20500%20Hits%20All%20TIme%20High_5.pdf)
https://www.npr.org/2024/01/03/1198909517/1a-draft-01-03-2024
https://time.com/6551743/2024-elections-democracy-trump-putin/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/01-22-24_Time_A%20Make%20or%20Break%20Year%20for%20Democracy_8.pdf)
https://www.bloomberg.com/news/articles/2023-11-01/brace-for-elections-40-countries-are-voting-in-2024 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/01-22-24_Bloomberg_Brace%20for%20Elections_9.pdf)
https://www.lwv.org/voting-rights
https://www.brainyquote.com/topics/indecision-quotes
ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
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