Who Really Owns America’s $36 Trillion Debt?
As trade tensions have escalated in recent weeks, some fear that Japan and China are “dumping” U.S. Treasuries in an effort to pressure the U.S. by driving up interest rates. We believe that concern is overstated. In this week’s edition of Three on Thursday, we dig into the details of U.S. federal debt ownership. As of the end of March, total federal debt stood at $36.2 trillion—an increase of 4.7% from a year ago. But who actually owns all this debt? Many assume it’s mostly foreign governments, but is that the case? To provide a more comprehensive understanding, we have included three charts below.
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What happens when an 87-year-old client decides to throw a party for his neighbors, and it goes viral?
When Doug Turner, a Haddonfield Financial Planning client, hand-delivered about twenty-five invitations to his Celebration of Winter Party, slated to go “until the cops arrive,” social media lit up with well over two million views of a video capturing one of Doug’s personal deliveries!
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The Range of Possible Economic Outcomes is Wide. Diversification is Key
Despite tariff concerns and an AI scare driving the bid for safe haven assets towards the end of the month, strong earnings and consumer spending drove another positive month of equity returns in January.
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With New Risks Surfacing, How Should Investors Position Portfolios in 2025?
Despite still stubborn inflation, a brief growth scare, less than expected interest rate cuts, and a pullback in December, US equities were up notably in 2024 on the back of a strong economy, accelerating earnings growth, US election results, and AI/megacap-related strength.
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Valuations Have Richened, But Areas Outside of Large Caps Remain Attractive
Amid the results of the US presidential election and resilient economic data, equities were up in November. Both the Dow Jones Industrial Average and S&P 500 indices produced their best monthly returns of 2024, gaining 7.7% and 5.9%, respectively. US small-caps (+10.9%) were among the best performers, followed by US mid-caps (+9.0%) and US growth (+6.1%).
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Forget ‘T-Bill and Chill.’ The Economic Backdrop Ahead is Supportive and the 493 Look Attractive
Amid underwhelming Big Tech earnings, concerns regarding the path for Fed interest rate cuts, election uncertainty, and geopolitical conflict, equities were down in October as the S&P 500 Index and Nasdaq 100 Index fell 0.9% and 0.8%, respectively. International developed equities (-5.0%) were among the worst performers, followed by US small-caps (-2.6%) and emerging market equities (-2.6%). Bonds also struggled as 7-10 year US Treasuries decreased 3.4%, the US Aggregate Bond Index declined 2.6%, and investment grade corporates were down 2.5%. Aside from broad based commodities (-1.3%), silver, crude oil, and gold all produced positive returns, gaining 4.9%, 4.5%, and 4.3%, respectively.
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SpaceX: Leading Space Innovation
Advancements in space travel technology have dramatically reduced the cost of launching payloads into space. From the iconic Apollo missions of the 1960s to today’s cutting-edge innovations, breakthroughs in materials science and propulsion—driven largely by private companies like SpaceX—have brought down what were once astronomical costs. For more insights, click the link above.
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MONEYMapped: The Purchasing Power of $100 in Each U.S. State
While $100 may seem like it holds the same value across the U.S., that’s far from the reality. The purchasing power of a dollar can vary significantly from state to state, influenced by factors such as the cost of food, utilities, taxes, housing, and transportation.
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Market Broadens Amid China and Fed Policy Actions. Play the Rotation While Barbelling Your Portfolio
Despite pullbacks and acute periods of elevated volatility, major equity indices were up in Q3 amid decelerating inflation, initial Fed rate cuts, increased probabilities of a soft landing, and China’s stimulus measures.
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Fed Rate Cuts Give Higher Probability of the Great Rotation Occurring
Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August amid easing inflation, a dovish change in monetary policy, and increased probabilities of a soft landing.
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Effects of Tight Monetary Policy have Started to Materialize. Will the Great Rotation Continue?
Amid easing inflation, underwhelming technology related earnings, and increased probabilities of Fed interest rate cuts, equity markets witnessed a meaningful rotation in July in which smaller, value oriented stocks outperformed large-cap growth.
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Three on Thursday - First Trust Economics
The election year is in full swing, bringing with it the usual drama. We all have that one family member who insists they’ll sell everything and go to cash if a certain candidate wins the election. The truth is, letting politics drive our investment decisions can be detrimental. That’s why we believe having a financial professional is crucial they can help remove emotion from investment decisions. In today’s Three on Thursday, we examine past presidential cycles and their implications for investing.
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Market Minute with McGarel
The equity market capitalization of the S&P 500 Index is $44 trillion dollars as of 5/31/24. The forecasted earnings of the index for 2024 is expected to surpass $2.0 trillion dollars. That would be the best ever earnings for the index. It would also be the 4th year in a row where earnings have been significantly higher than the $1.3 trillion earned in 2019, which at the time was the highest ever.
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Magnificent 7 vs Remaining 493
In a market that has been driven significantly by momentum and speculation this year, investors still have an eye on what matters in the end. Earnings! And if that focus continues, future earnings forecasts suggest a further broadening of the market is in order.
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Hard Landing? Soft Landing? Or No Landing?
The key points you should know.
The economy continued to grow at a solid pace through the first quarter.
The job market remains tight, but perhaps with some signs of slowing.
Inflation, while down substantially from a couple of years ago, remains too high.
The Federal Reserve still expects to start easing this year, but not yet.
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Market Minute with McGarel
How fast the world can change. Not long ago, in a world of extremely low and even negative interest rates around the globe, stocks flourished as investors claimed “there is no alternative” (the “TINA” acronym) to equities.
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Market Minute with McGarel
By almost any account, the S&P 500 Index year-to-date performance has been incredibly narrow and concentrated. Just seven companies account for the entire 10% return. The other 493 companies combined are delivering a slightly negative return. Stunning.
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Jobs With Little Growth Means Less Productivity
We have used the word “unprecedented” to talk about the economy during and after COVID. We have never before locked down economic activity, while printing trillions of new dollars to help finance trillions of extra government borrowing to pay people not to work. But now, it’s all over…the Federal Reserve has lifted rates, M2 is falling, and we’ve stopped paying people not to work.
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How to Lose Reserve Currency Status
History is full of economic and societal collapses. The Incan and Roman societies disappeared, the Ottoman Empire fell apart, the United Kingdom saw the pound lose its reserve currency status. So, anyone who says the US, and the dollar, couldn’t face the same fate doesn’t pay attention to history.
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RUSSIA AND CHINA MAY TRY USING THEIR NATURAL RESOURCES TO BACK THEIR MONEY: End of the U.S. Dollar Monopoly?
China and Russia have announced they, along with Brazil, India and South Africa, are “working to develop a new global reserve currency” to compete with the U.S. dollar.
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