Daybreak with Anton

We have mentioned in past UPdates the importance of monitoring the financial and sentiment of US consumers.  The primary reason is American spending represents a whopping 67.9% of America’s Gross Domestic Product (GDP) otherwise known as gross revenue from all transactions (illustrated below by JP Morgan).  Imbedded in the matrix of consumer spending is the freedoms Americans have that has always been the foundation of the world dominate US economy.   Read in this UPdate our analysis of core of the US economy, consumers’ impact, and our projections for 2025. 

It may be just physiological, but I really enjoy January.  Granted it’s just another 30-day period like any other month.  But January is motivating to me because it’s the start of a new year to achieve new goals and experience new adventures.   Read in this issue my personal hacks on how I venture into the new year with purpose and planning.  More importantly, what you can learn from these hacks that may help you make 2025 your best year yet!

The National Federation of Independent Businesses (NFIB) index has been well below its 50-year average of 98 as respondents report challenges with labor, costs, inflation, and government policies.  The index has not been this low for as long as it has since the Great Recession.  However, in November the index jumped 8 points to 101.7 as business owners responded with robust optimism regarding the new administration.  Read in this UPdate our view of the sudden change in small business owners optimism, the future prospect of the stock market, and specifically the future of small cap index.

My daughter loves to shop.  In fact, her two love languages are shopping and someone paying for it.  Apparently at least the shopping part is also a lot of people’s love language.  Adobe Analytics reported that between November 1 to 24 that US consumers spent a whopping $77.4 billion online, that is an increase of 9.6% over same time last year.  In their report, Adobe Analytics reported that 21 of these 24 shopping days had over $3 billion in sales vs 16 days last year.  Based on this early indication of sales Adobe Analytics is predicting an 8.4% increase year over year in this year’s holiday season.   Read in this issue our complete report on holiday retail sales and their possible indication going into 2025.

Late Friday afternoon on November 29, 2024, Anton and 61 others traveled from San Antonio to Reynosa, Mexico to volunteer for Strategic Alliance to build three houses for three related families all living in small shacks.  Read in this issue his experience with pictures of his trip and the houses they built. 

The housing market is facing challenges with plummeting sales and high mortgage rates, but rising new home construction and potential rate declines in 2025 could improve affordability. Homeownership remains a powerful wealth-building tool, offering significantly higher net worth compared to renting. If you're considering entering the market or investing, now is the time to plan strategically—reach out to us for guidance.

Looking back at Trump’s first term offers insights into potential market impacts of his second. In 2016, markets rallied after his election, while 2024 has seen sustained growth and investor confidence regardless of the outcome. Key sectors—small caps, consumer discretionary, finance, and energy—are showing strong performance, with tech once again poised for growth.

I don’t know about you, but it seems costs for everything is getting crazy.  My wife went to the grocery store and items that were $9 last week are $14 this week.  You can’t tell me grocery store or supplier cost have jumped 56% in one week?!?   Are prices really going up faster now than in the past?  In this issue we analyze the changes in inflation and wages and compare the recent changes to historic averages. 

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.