Daybreak with Anton

September retail sales increased 0.4% from August and the third consecutive month over month (MoM) it has increased. The 0.4% is substantially higher than August's 0.1% monthly increase. Even though retail sales have increased six of the past nine months this year, overall total retail sales are still less than previous years. Listen in this issue our views on this report and the prospects for the future of the economy and stock market.

Prior to the outbreak of the coronavirus in 2020, we used to host multiple client and friend dinner events each year. Read in this issue about our dinner event this past September 27 with long time client and friend, retired Lieutenant Colonel Tom Dwelle, as our keynote speaker at the Dwelle's impressive hangar at Auburn Municipal Airport. It was an amazing evening with historic multi-million-dollar warbird planes on display, three ship formation flight of North American T-6 Texans, and riveting stories about Tom's experiences as a fighter pilot during Vietnan. Sign up for our next event on November 13 in San Jose.

Today we have received a trove of economic reports that indicate that companies are still hiring and growing while it appears the economy is in a mild slow down cycle. This seems contradictory and begs the questions: Ø Why is the economy slowing (less consumer spending) while more people are working in the history of this country? Ø Why are there so many job openings yet the unemployment rate remains at lowest level since 1954? Ø What is prompting investors to drive up the stock market to all-time highs? Listen in this issue as we decipher several economic reports and answer these three key questions.

The very low volume of existing home sales reported last week by the National Association of Realtors (NAR) would indicate the continued impact of current decades high mortgage interest rates. The NAR reported only 3.86K houses sold in August compared to 6.6K in January 2021 and well below the average of 5.5K monthly sales from 2015 to 2020. Listen in this Weekly UPdate our assessment of this report and what this may mean for home prices in 2025.

The National Federation of Independent Business (NFIB) released its Small Business Optimism US Index today indicating it has decreased to 91.2 in August. This breaks the improving trend since dropping to a multi-year low in March. interested in a loan. NFIB Optimism index has remained below its 50-year average for the past 32 consecutive months. Read in this Weekly Update our assessment of this report and the future of small businesses in America.

After a long Labor Day weekend, investors started the first trading day of September by selling. The reason floated out by the main media for the selloff is investors skittish about the S&P Global US Manufacturing Purchasing Manager's Manufacturing Index (PMI) report released this morning. Apparently, investors were rattled hearing the same information from last week's Federal Reserve of Philadelphia Manufacturing (FRPM) index that dropped in August and down from the three months high reached in July. The S&P Global PMI index declined in August and was the first month in 2024 with a reduction of production, sales, and demand. Read in this issue our review of these reports and our analysis of today's stock market selloff.

As we forecast in June, the US stock market to enter a period of weakness with stock prices declining during the summer after the major indices had a solid rally in the first half of 2024. The reasons for summer weakness vary from one year to the next, but the consistent pattern is unmistakable. This summer, the rationale given why investors were reducing stock allocations included disappointment the Feds have not lowered interest rates, concerns about the wars in Israel and Ukraine, stocks were overpriced to their earnings, and weak housing market. In this Update we review reports released by the Federal Reserve Banks on businesses leader sentiment and their forecasts for the next six months. More importantly, read about our views of the stock market rebound and if it will continue to the end of the year.

Explore the paradox of low consumer confidence amid a booming stock market in our latest analysis. Discover how media narratives might be leading investors astray while missing out on historic gains.

The National Federation of Independent Businesses released today their Small Business Optimism report. In the report, they track the results of their monthly survey to its members to produce their proprietary Small Business Index (SBI). Based on answers provided in July, the SBI rose 2.2 points to 93.7, the highest reading since February 2022. However, July's index at 93.7 is the 31st consecutive month below the 50-year average of 98.0. Read in this issue our view of the Small Business Optimism report.

Yesterday the world markets sold off as investors stampeded out of the market selling their client's portfolios as fast as they could. What spooked the markets yesterday is not much different than what normally triggers a stampede. A jittery herd and then a sudden noise. Read in this Issue as we separate the facts from fiction of what the media is reporting and whether the stampede was legitimate or just nervous nellies.

A summer market correction is well under way after a strong first half of 2024 for the stock market. Over time the S&P 500 on average increases about 70% of time with the remaining periods with down cycles referenced as three steps forward one step back. A consistent factor with investors and the stock market are the down cycles that are necessary to set up the next positive trend. Listen in this issue our analysis of the stock market and economy and predictions of when and how the stock market may resume its next up trend.

In today's market, interest rate trends, the recent S&P500 pullback, and presidential campaigns are key topics, influencing inflation, market volatility, and political dynamics

The holy grail for companies is achieving maximum productivity growth at the most profitable revenue ratio. For publicly traded companies, investors wait to hear each quarter are the changes in the company's top line revenue (gross sales) and bottom line EBIDTA (earnings before interest, depreciation, taxes, amortization). The challenge for companies is increasing top revenue efficiently so their net income increases with rising sales. Read in this Update our analysis of a recent study by the Bureau of Labor Statistics on productivity and possible implications as companies embrace new technology to grow their companies.

Since the stock market bottom on October 14, 2022, the major indices have rallied significantly. During these past 20 months, the tech-based NASDAQ index has soared 78.3% followed by large cap S&P 500 index up 55.53%. The mid-cap S&P 400 index and small Cap S&P 600 trailed, rising 29.42% and 18.22% respectively. Is this a time to sell or buy more? Listen in this issue our analysis of identifying buying opportunities and when we believe it is time to sell.

We added Nvidia (NVDA) to our Growth & Income and Growth model portfolios early last year. Since then, the stock price has soared. This year institutional investors continued to add NVDA to their portfolios on bullish forecasts the company's chip and GPU (graphic processor units) will increase in demand. The stock is up 154.9% YTD through today. Listen in this Weekly Update our view on the future of NVDA and the AI industry.

The US Census Bureau released last week the advance projection May report of the Index of Economic Activity (IDEA) that includes information how consumers changed their spending last month. Consumers are changing their spending in what economists refer to as a "soft landing" from former periods of stronger retails sales. Quick reversals from strong retail sales to no sales blindsides investors that typically results in greater stock market volatility as investors knee jerk reaction is to SELL! In this Update, read about our observations of the IDEA report and forecasts for the economy.

In this podcast we identify that consumers are changing how they spend their money. It appears people are buying less fun stuff like vacations and home improvements and focusing more on boring stuff like food and clothes. Do consumers know something analysts don't and are starting to adjust their budgets in preparation for a slowing economy? Listen in this Weekly Brief our observations of consumer spending and the changes we are making in our model portfolios.

The most recent economic tsunami was the 2020 pandemic that significantly disrupted all business and specifically manufacturing. Manufacturers were initially required to shut down operations and send their employees home. The obvious supply chain dysfunction that followed disrupted all businesses depending on manufactured products. Read in this Weekly Brief our observations of this week's US and Global Manufacturing reports on production and output and the potential impact on businesses in 2024.

Last week the Institute for Social Research (ISR) of the University of Michigan released their monthly report on consumer sentiment. For the May report, the mid-month results indicate a preliminary consumer sentiment index of 67.4 that was revised up to 69.1 for the final May reading. May is below the April's final reading of 77.2. Listen in this issue our analysis of this report and the potential insight to the future of the economy and stock market.

The Federal Reserve raised the discount interest rate 11 times since March 2022. The last rate increase was in July 2023 as the CPI trended down from its peak and currently the CPI annualized rate for April was reported last week at 3.4% by the Bureau of Labor Statistics. How will investors respond with their investment activity as we approach this year's controversial Presidential election? Listen in this Weekly Brief our views on the interest rate market, the election, and the potential for the stock market.

Today the National Federation of Independent Business (NFIB) released their April report of the small business optimism index. The index ticked up to 89.7 from 88.5 reading in March which was ahead of general Econoday forecaster consensus. Small business owners have struggled significantly since the coronavirus outbreak that has been reflected by the dramatic drop in the optimism index. The optimism index has been below the 50-year average of 98 for the past 28 consecutive months. Read in this Weekly Brief our analysis of this report and investment opportunities in the future.

Why do some investors build wealth consistently over time while many have little to show in growth after years of investing? In this Weekly Brief, we dive into the various practices and policies of investment advisors and why the guidance of some will result in years of underperformance of their client accounts.

Yesterday the Bureau of Economic Analysis released its monthly report on consumer income and spending. The report indicated that personal income rose 0.05% and has increased each month now for 24 consecutive months which is good news for households and the economy. In this Weekly Brief we review this report and how it may impact the stock market and investors.

The US Census Bureau reported today that March housing starts plummeted 14.7% month over month (MoM) to 1.321 million. This reverses February MoM gain with March's new starts the lowest since August 2023 and biggest decline since April 2020. What does this mean for the housing market and will it impact the stock market. Listen in this issue our view on this report and the potential impact on the US economy.

Therefore, to understand the financial health of the US we need to look no further than to monitor the financial health of households and consumers. To simplify the US economic equation is simply: People working = people spending = economic activity In this issue we review today's Retail Sales report and evaluate the financial health of consumers and the probability of continued expansion of the US economy.

The media and analysts are back to the good news is bad news routine. Meaning that when economic news is positive then the potential of the Federal Reserve lowering interest rates declines. Read in this Weekly Brief our review of several key benchmarks on the economy and the prospects the Federal Reserve will lower interest rates soon.

One economic indicator we monitor is the US Purchasers Manufacturing Index (PMI). This index is based on monthly questionnaire surveys of selected companies that offer an advance indication on month-to-month activity in the private sector economy. This index tracks changes in variables such as production, new orders, stock levels, employment, and prices across manufacturing industries. Historically, when the PMI index is above 50 it represents a growing manufacturing industry and below 50 indicates contraction. Listen to this Weekly Brief the results of the recently released PMI report and our analysis of this report.

The start of new construction housing increased 10.7% to 1.521 million units month-over-month to an annualized rate in February after falling 12.3% in January. The February increase was well above the consensus of 1.449 million units in the Econoday's survey of forecasters. Read in this Weekly Brief our analysis of the improving housing market and whether it is a precursor to the future of the stock market.

Although many companies are experiencing record sales with the stocks hitting all-time highs, the small business sector seems to be missing the party all together. For several years we have been writing about the lagging S&P 600 Small Cap Index to its peers of the S&P 500, NASDAQ, and S&P 400 Mid Cap Indices. Today we review the National Federation of Independent Business (NFIB) release yesterday that indicated the 26th consecutive month the small business optimism index is below its 50-year average. Listen in this issue why small business owners have not been this pessimistic since 2013 and the outlook for the S&P 600 Small Cap index.

A January 2024 Gallup Poll indicated that Americans mentioning the economy as a key issue has risen almost three-fold since 2019. In the category of Economic Problems, 76.7% was attributed to "Economy in General" and "High Cost of Living/Inflation". In this Weekly Brief we review events of the 1960's that led to historic hyperinflation of the 1970's and what we can learn from this era. Most importantly, what were the risks and opportunities during the wild rides of these decades.

Today the University of Michigan Consumer Sentiment Index was released for February 2024. We need to monitor this economic indicator on consumers and their views of the economy as it provides us potential insight to the future of consumer spending which represents 66% of the nation's financial activity as referenced by the Gross Domestic Product (GDP). Listen in this Weekly Brief what this means and our view of the stock market.

This week's podcast dives into the disconnect between media-driven recession fears and the actual economic growth seen despite the Federal Reserve's rate hikes. Contrary to dire predictions, the economy expanded, with significant stock market rallies and low unemployment rates defying expectations. We'll discuss the repercussions of basing investment strategies on speculative media narratives and highlight the stability and growth in consumer-focused economic indicators. The episode concludes with our optimistic outlook for 2024, adjusting investment strategies while reflecting on the past year's successes and challenges. Join us as we explore these dynamics and set the stage for informed financial decision-making.

This year there are more people turning 65-year-old in America than in any other time in history. Baby Boomers, those born between 1946 and 1964, are now between the ages of 60 and 78 and they are turning the age of 65 at a rate of 11,300 per day. Listen in this Weekly Brief what this means for the American society and economy?

In last week's episode, we dove deep into the seismic news that shook Wall Street to its core – the latest January US Bureau of Labor Statistics job report. With analysts initially predicting a modest increase of 180,000 new jobs, the actual figures left us astounded as the economy surged with an additional 353,000 positions. This significant uptick isn't just a number; it's a beacon of bustling activity, signaling more paychecks, bolstered households, and invigorated consumer spending. Join us on "Wall Street Wake-Up" as we dissect the labor market's latest trends, providing you with insightful analysis on what this unexpected growth means for your investments and financial landscape. Tune in to ensure you're well-equipped to navigate the twists and turns of the market with confidence.

Explore the 'Santa Claus Predictor' in our latest podcast episode. Learn how the S&P 500's performance during key December and January dates can signal its yearly direction. With mixed signals for 2024, we also delve into the robust end-of-year market rally in 2023 and discuss the promising economic outlook for the year ahead. Tune in for a concise and insightful analysis of market trends and predictions!

The American consumer sentiment, heavily affected by the COVID-19 pandemic and subsequent Federal Reserve rate hikes in 2022, has been recovering since hitting a low in July 2022, reaching a two-year high in January. Despite ongoing concerns like international conflicts and inflation, household financial conditions are strong, with low unemployment and favorable mortgage rates. This improvement in sentiment is critical as consumer spending drives 66% of the US GDP, and while holiday sales were robust, economic conditions remain dynamic and require continuous monitoring to anticipate future trends in the economy and stock market.

In 2023, the stock market, led by major tech companies, saw significant gains with the S&P 500 up by 26%, while the fixed income market experienced unexpected fluctuations in interest rates. Looking ahead to 2024, the stock market is considered more expensive, with expectations of continued growth and margin expansion, especially in tech sectors influenced by AI, while the fixed income market faces challenges with debt rollovers and potential for strong yields in high-rated areas. The U.S. economy remains resilient with steady growth and moderating inflation.

Our expectations of a stock market yearend rally were modest due to waning retail sales and consumer confidence reported in October. As it turned out, the yearend rally exceeded our and most expectations as institutional investors added stocks to their portfolios that rallied the S&P 500 by 17% and NASDAQ by 23% since the October 27 bottom. Read in this Weekly Brief our analysis of the year and potential new buying opportunities in 2024.

Yesterday was Christmas and already it seems like it was yesterday. We are fortunate to have seven of our ten grandkids living close to us. As a result, we had a full house with all day activities with kids and adults that concluded with an amazing Christmas dinner with my wife as head chef. Read more about our day in this Weekly Brief. We are hopeful that you had a wonderful Christmas day with friends and family. At Up Capital Management are thankful for the opportunity to serve you with this Weekly Brief and as clients of our financial planning and wealth management services.

The Bureau of Labor Statistics reported today the slow continual decline in job openings that remains at historic high levels. Meanwhile, unemployment remains at multi-decade low levels. How can businesses have record job openings while those collecting unemployment are at record low levels? Where are the workers and how are they paying their bills? Finally, what does this mean for the US economy and stock markets? In this Weekly Brief we unpack these reports and explain where people are working and why household finances are better than they have been in decades.

With Thanksgiving quickly approaching (along with friends and families), we take a look at how inflation is impacting the country and especially the cost of Thanksgiving dinner. Listen in this Weekly Brief our review of several economic indicators to determine if the economy is slowing or growing as we enter the last four weeks of the year. Let us know how we can assist you with your financial planning and investing goals.

Explore the market's triumphant week with our latest financial briefing. Discover how small and mid-cap indices like the SP600 and SP400 outshone their larger counterparts, signaling a strategic shift as investors hunt for value in underperformers. Unpack the surprising three-year lag of the tech-heavy NASDAQ and its historical cycle of dominance and downturns. Dive into the charts illustrating NASDAQ's impressive rallies over the past five and ten years. We dissect what this rotation in market leadership means for your investments and why, despite past tech sector volatility, a future of growth beckons. Tune in to align with the market's upward momentum as we analyze why history's lessons are shaping today's investment strategies.

The stock market is always moving as investors adjust their portfolios to their perspective of the economy and their stock holdings. The result is the actual value of stocks are rarely held as prices fluctuate above and below the actual value. The key to building wealth is achieving sustainable and consistent yearly gains of your accounts. In this Weekly Brief, we review the wild ride of the past couple years, what we can learn from it, and most importantly, what longer trend has been in place.

Is good news really bad news for investors? The media would like you to think so. Today, the US Census Bureau released their report indicating that consumer spending increased month over month higher than projected. The media interprets this as bad news as it raises the risk the Federal Reserve may increase interest rates. Read in this Weekly Brief how we interpret this data and whether good news is really bad news.

The small and mid-cap indices continue to trail their large cap and NASDAQ peers. Is it time to consider investing in these trailing sectors or wait for more confirmation of a positive trend? Speaking of positive trend, the SP 500 has bounced off of a low on October 2 and has rallied above its 20, 50, and 200 Day Moving Averages. Is this the uptrend we have been waiting for? Read in this Weekly Brief our views of the current market and this recent reversal.

In this Weekly Brief we review many of the scams our clients have experienced in hopes of preventing you from getting scammed. Scammers are getting extremely sophisticated as they can duplicate major banking emails and even show up on your caller ID when they call. AI is introducing all new ways to duplicate voices and write emails. Be aware anytime you get a call from a financial institution and especially if they want you to make changes or transfer funds from your account.

The S&P 500 has declined 8% since it peaked on July 31 the year high and now at its 200 Day Moving Average. Is this a time to sell or buy and what will the institutional investors that represent the majority of stock market trading, be doing? Read in this Weekly Brief our views and what strategies one must consider to consistently build wealth.

Consumer sentiment has declined for the third consecutive month. Is this a precursor to another mild holiday season? In this Weekly Brief we review the recent University of Michigan Consumer Sentiment report along with other reports to determine the trend of the economy and stock market.

Anton shares in this Weekly Brief his experience of a near death plane crash one year ago and the emotional recovery process since the crash. Not everyone will be involved in a near death accident, but recovering from personal challenges are similar with perseverance to work through the situation and emotions that come with the experience.

Consumer spending is the economic engine for the US economy and they appear to be in good shape. The Bureau of Economic Analysis reported that consumer spending has increased 0.8% year over year in July and above expectation of 0.7%. Consumer spending represents 66% of the US GDP and the future of the economy is dependent on consumers continuing to spend even with higher interest rates. Listen in this Weekly Brief our full analysis of consumer spending and other economic indicators.