The Armstrong Report: Summer 2024 Firm Update

I hope you had a wonderful Independence Day and that you took the time to reflect on the founding of our great country. Of course, if you are like me, you probably ate too much, too!

ECONOMY

As I am writing this near the end of June, per the Atlanta Federal Reserve, the economy continues to grow at around 3%. Manufacturing, however, has been in contraction for 18 of the last 19 months. The services part of our economy, by contrast, has only been negative one month in almost two years. Inflation is slowly getting closer to 3%, but unemployment has begun to rise. Credit card and auto loan delinquencies (90 days or more late) have risen significantly, especially in the 18 to 39 age group. To me, it is a mixed bag. Based on history, by the time the data really deteriorates, it will be too late for the Federal Reserve to act. They may want to consider cutting rates some sooner than they currently indicate.

MARKETS

The US stock market advance is very narrow. The S&P 500 Equal Weight index (where every stock has a similar impact on the index, so it represents the average stock) is flat since March. The market-cap weighted (bigger companies have a greater impact) S&P 500 is up over 4% this past quarter and over 15% for the year (as of June 25). However, just one stock is responsible for 35% of the gains of the market. That is NOT a healthy market. We are due a 5-10% correction soon (and frankly a bear market at some point). But, if we stay out of recession, even though stocks are expensive, there is no reason they can’t continue pushing upward modestly. If we have a recession, though, there will likely be a severe correction. Bond yields continue to indicate that fixed income is attractive here and CD/money market rates are also attractive for cash reserves.

FIRM

Just a quick final comment to emphasize one of the aspects of our firm—we are a team, an ensemble if you wish. Regardless of who is your wealth manager—Lee, Matt, or me—and regardless of whether Leslie or Emily is your service manager, we are all here for you. Jason, for example, is our portfolio strategy assistant. He is responsible for preparing financial plans, portfolio reviews, investment research, running the spreadsheets on our WealthProtect System, and is an all-around IT guy. Creighton, whom you hear from a lot as he is the one who usually schedules reviews, also assists Jason with preparing those client reviews and is our point person for our marketing operations. Sometimes, one of us gets the recognition, but it is truly a team effort. We have created this by design so that if something were to happen to any one of us (I’ve been to way too many funerals the past few weeks), you will always be in good hands.

Thank you for selecting us to assist you in reaching your financial goals, and thank you for your trust and friendship.