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WMP Weekly Commentary - DECEMBER 4, 2023

| December 04, 2023

The Markets

We’re cycling along.

It’s easy to forget that economic activity tends to move in cycles. A full cycle, known as the business cycle, typically includes four stages:

  • Contraction occurs when economic growth slows as an economy produces fewer goods and services. Economic contractions often include recessions. As productivity contracts, it can negatively affect the profitability of companies, as well as the number of jobs available and the income security of workers. The United States economy contracted during the first two quarters of 2022
  • Trough is the stage at which economic growth hits bottom for the cycle. It occurs before an expansion begins. The month following a trough is the first month of an expansion. 
  • Expansion occurs when an economy produces more goods and services. The United States economy has been expanding since mid-year 2022. Productivity, as measured by gross domestic product, grew 5.2 percent year-over-year in the third quarter of this year.
  • Peak is the stage at which economic growth reaches its highest point for the cycle, just before a contraction begins. The month following a peak is the first month of a contraction. 

“It might be tempting to think the stages of the business cycle are like the cycles on your dishwasher – regular cycles that occur in predictable patterns: The rinse cycle always begins after the wash cycle has completed, and each rinse always lasts the same length of time…But there is nothing ‘regular’ about the business cycle,” wrote Scott A. Wolla in the St. Louis Federal Reserve’s Page One Economics® blog.

At the start of the fourth quarter, the United States was in the late cycle stage of expansion, according to Fidelity Insights.That doesn’t necessarily mean we’re heading into a contraction, though. Expansions usually end when the economy experiences a shock of some kind, reported Wolla.

“Economists suggest that shocks that cause recessions might include financial market disruptions, international disturbances, technology shocks, energy price shocks, and actions taken by monetary policymakers to restrain inflation.”

Major U.S. stock indices finished last week higher, reported Barron’s, and U.S. Treasury yields moved lower as investors embraced the idea that rate cuts may be ahead in 2024.


Data as of 12/1/23

1-Week

YTD

1-Year

3-Year

5-Year

10-Year

Standard & Poor's 500 Index

0.8%

19.7%

12.7%

7.9%

10.5%

9.9%

Dow Jones Global ex-U.S. Index

0.6

7.6

4.7

-1.3

2.3

1.3

10-year Treasury Note (yield only)

4.2

N/A

3.5

0.9

3.0

2.8

Gold (per ounce)

2.2

12.9

13.4

4.2

10.7

5.2

Bloomberg Commodity Index

0.1

-10.1

-12.6

10.8

4.1

-2.0

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

THE WORD OF THE YEAR IS HERE! Last week, the Merriam Webster Dictionary unveiled its 2023 Word of the Year, as well as other words that gained attention as the dictionary’s 2023 data was analyzed. Some of the words that stood out were:

 Rizz was the most frequently looked up word after it was added to the dictionary in September. It’s slang that describes someone’s ability to flirt with, or charm, a person they are romantically interested in. Rizz can be a noun or a verb, and it might be derived from “charisma.”

 Deepfake also gained interest from the public in 2023. A deepfake is “an image or recording that has been convincingly altered and manipulated to misrepresent someone as doing or saying something that was not actually done or said,” explained Merriam Webster.

 EGOT came to the fore after Viola Davis won a Grammy for the audiobook of her memoir. EGOT describes a person who has won an Emmy, a Grammy, an Oscar and a Tony. The word has been in the dictionary as a noun since 2019, although it may also become a verb after Davis exclaimed, “I just EGOT!”

 Doppelgänger, which means two people who look extremely similar, gained notoriety for several reasons in 2023. In one case, two minor league baseball players, who share the same name, also resemble each other. The pair are mistaken for one another so often, they took a DNA test to find out whether they’re related. They’re not. They’re just doppelgängers.

 While all of these words gained attention in 2023, the editors at Merriam Webster chose authentic as the word of the year. “A high-volume lookup most years, authentic saw a substantial increase in 2023, driven by stories and conversations about AI, celebrity culture, identity, and social media. Authentic has a number of meanings including ‘not false or imitation,’ a synonym of real and actual; and also ‘true to one’s own personality, spirit, or character.’ Although clearly a desirable quality, authentic is hard to define and subject to debate – two reasons it sends many people to the dictionary.”

 

Weekly Focus – Think About It

“I would define, in brief, the poetry of words as The Rhythmical Creation of Beauty.”

—Edgar Allan Poe, author

 

Recipe of The Week

 

Chicken Pot Pie

 By Ina Garten

Serves: 6 to 8

 Ingredients                   

  • 3 whole (6 split) chicken breasts, bone-in, skin-on
  • 3 tablespoons good olive oil
  • Kosher salt and freshly ground black pepper
  • 5 cups chicken stock, preferably homemade
  • 2 chicken bouillon cubes
  • 12 tablespoons (1½ sticks) unsalted butter
  • 2 cups chopped yellow onions (2 onions)
  • ¾ cup all-purpose flour
  • ¼ cup heavy cream
  • 2 cups medium-diced carrots (4 carrots), blanched for 2 minutes
  • 1 (10-ounce) package frozen peas (2 cups) (not defrosted)
  • 1½ cups frozen small whole onions (not defrosted)
  • ½ cup minced fresh parsley
  • 1 sheet frozen puff pastry, defrosted in the fridge
  • 1 egg mixed with 1 tablespoon water, for egg wash

Directions

  1. Preheat the oven to 375 degrees.
  2. Place the chicken breasts on a sheet pan and rub them with olive oil. Sprinkle generously with salt and pepper and roast for 35 to 40 minutes, until cooked through. Set aside until cool enough to handle. Separate the meat and discard the bones and skin. Dice the chicken into ¾ inch cubes. You will have 4 to 6 cups of diced chicken. 
  3. In a small saucepan, heat the chicken stock and dissolve the bouillon cubes in the stock. In a large pot or Dutch oven, melt the butter and sauté the onions over medium-low heat for 10 to 15 minutes, until translucent. Add the flour and cook over low heat, stirring constantly, for 2 minutes. Add the hot chicken stock mixture and simmer over low heat for one minute, stirring constantly, until thick. Add 2 teaspoons salt, ½ teaspoon pepper, and the cream.  Stir in the chicken, carrots, peas, onions, and parsley. Spoon into a 10 x 13 x 2-inch oval or rectangular baking dish and place the dish on a sheet pan lined with aluminum foil. 
  4. Unfold a sheet of puff pastry on top of the chicken and vegetable mixture and cut the pastry to fit the dish. Cut 3 slits in the pastry to allow steam to escape. Brush the pastry with the egg wash and bake for 30 to 40 minutes, until the pastry is browned and the stew is bubbly and hot. Serve hot.

Best regards,

Wealth Managing Partners, Inc.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Wealth Managing Partners, Inc., are not affiliated. #5508660.39-12042023

 * These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.

* Consult your financial professional before making any investment decision.

Sources:

https://research.stlouisfed.org/publications/page1-econ/2023/03/01/all-about-the-business-cycle-where-do-recessions-come-from

https://www.bea.gov/sites/default/files/2023-11/gdp3q23_2nd.pdf

https://institutional.fidelity.com/app/item/RD_13569_40890.html

https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go tohttps://resources.carsongroup.com/hubfs/WMC-Source/2023/12-04-2023_Barrons_Data_4.pdf)

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2023

https://www.reuters.com/markets/us/futures-muted-traders-gear-up-powells-remarks-2023-12-01/

https://www.merriam-webster.com/wordplay/word-of-the-year

https://www.latimes.com/entertainment-arts/music/story/2023-02-05/grammys-2023-viola-davis-egot-winner

https://www.foxsports.com.au/baseball/doppelgangers-with-same-name-took-dna-test-to-see-if-they-were-related/news-story/bc30dadc4e48b4f0f24c284c5c920aa7

https://www.brainyquote.com/topics/define-quotes

https://barefootcontessa.com/recipes/chicken-pot-pie