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% year over year (YoY) in August. That’s lower than economists had expected, and a significant decline from July’s 2.9%.
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% increase over the last 12 months. The biggest price increases were for shelter (+5.2% YoY) and automobile insurance (+16.5% YoY).
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% 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%.”
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. Over the last decade household and nonprofit net worth has risen from $85 trillion (2Q 2014) to $164 trillion (2Q 2024). 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.”
It’s important to note that not all Americans participate equally as wealth grows. The top 10% of households hold 67% of all household wealth, while the bottom 50% hold just 2.5%, according to the St. Louis Federal Reserve.
Stocks and bonds had a good week. Last week, major U.S. stock indices moved higher, and U.S. Treasury bonds rallied as yields on all maturities of Treasuries moved lower.
| Data as of 9/13/24 | 1-Week | Y-T-D | 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, 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?
You might guess it 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.”
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.”
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.
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% through 2034,” reported Corey Geiger, Abbi Prins and Billy Roberts for the CoBank Knowledge Exchange. According to one company’s survey, the most-produced, top-selling, and most widely eaten cheeses in the U.S. include 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% year-over-year, up to $1.33 billion.”
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.”
—Clifton Fadiman, television and radio personality
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://www.bls.gov/news.release/cpi.nr0.htm
https://www.bls.gov/opub/ted/2024/the-consumer-price-index-rose-2-5-percent-over-the-past-year.htm
https://www.federalreserve.gov/releases/z1/20240912/html/recent_developments.htm
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)
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)
https://www.barrons.com/market-data
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)
https://www.ers.usda.gov/topics/animal-products/dairy/background/
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)
https://www.cellocheese.com/most-popular-cheeses/
https://www.modernretail.co/marketing/tiktok-has-ignited-a-cottage-cheese-renaissance/#:~
https://www.goodreads.com/quotes/tag/cheese?page=5
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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