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Useless Information - July 2024 Edition Thumbnail

Useless Information - July 2024 Edition

The latter portion of July seems like a good time to share some useless information. Well, useless is really in the eyes of the beholder as I find most of this stuff at least interesting. Then again, I was always the Trivial Pursuit champion growing up. Feel free to impress others with this knowledge.

 

  • As I write this (before the market opens on July 17th), it has been 512 days since the S&P500 has dropped more than 2% in a day. I am sure I am jinxing things since yesterday was a solid day in the S&P500 and a huge one for the Dow, but so be it.

 

  • Although the doom and gloom reports get all the attention in the world of financial pornography (CNBC), just a reminder that nearly 80% of the time the S&P500 ends the year positive.

 

  • My fellow members of GenX are a bit more cynical when it comes to retirement and financial planning than other generations. This doesn’t shock me as I am a card-carrying member of the generation (it is right behind the Blockbuster card in my wallet). The percentage of GenX working with a financial professional is lower than other generations, including GenZ. This is even considering they have more assets than Millennials and GenZ. Also, their confidence in a good retirement continues to decline.

 

  • To pick on GenX a bit more, they stand to inherit the most of the “great wealth transfer” that is expected to take place over the next 20 years. Time to get serious!!!

 

  •  There have been 7 US recessions over the last 50 years. Fed monetary policy alone only caused one of them (the Volcker Recession to bring inflation under control). Factors that cause the other recessions included Oil issues (73, 80, and 90), Dot com bubble bursting, Great Recession/Mortgage Implosion and finally Covid.

 

  • I have a client who was talking to the financial advisor connected to his company’s 401k plan. The advisor had my client all stressed at the start of the year around the “impending recession.” We talked it through and since then the S&P500 has only had 37 new highs year to date. I wonder if that 401k advisor sells snake oil on the side😉

 

  • The market is now predicting 93% odds the Fed will start cutting rates at their September meeting (One prediction tool says it is 100%). At this point the “experts” are estimating two cuts this year and four next.

 

  • Small Caps are finally showing some life after being the laggard for years. This is not surprising with expectations rates will soon be cut. Small Caps like dropping rates.

 

  • There has been concern the recent market strength was too concentrated in select tech stocks. Well, we have been seeing an expansion of breadth as the Dow, S&P500 and Nasdaq have all recently set highs.

 

  • Applications for New Businesses have surged the last four years, nearly double the average for the previous 15 years.

 

  • Energy Production in the US (Natural Gas, Oil and Renewables) continues to climb. In the last few years our Production is finally greater than our consumption.

 

  • Final bit of useless information – The typical Bull market is roughly 5 years. We are about 2 years into this one.

 

This seems a good place to stop. Again, feel free to impress others, especially those Debbie Downers who are always predicting the market will collapse.

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