Published on: July 21, 2023

NetWorth Radio Advance Report - July 24, 2023

In this NetWorth Radio Advance Report, Spencer McGowan, President of McGowanGroup Asset Management, delivers financial news and intelligence with insights you can act on for July 24, 2023.

Advance Report

Radio Show

Q: What are some of the factors that contributed to the Dow Jones Industrial Average topping 35,000 this week for the first time since April of 2022?
A: Microsoft hit an all-time high at the release of their Alternative Intelligence (AI) subscription plan, Johnson and Johnson rallied after reporting their latest earnings & money flows appeared stronger for Value stocks over Growth stocks.
Q: What does the Federal Reserve think will happen between now and 2026?
A: Projections for 2026 include a Federal Funds Rate at 2.5% instead of the current rate over 5% & recent Inflation projections decline to 2%.
Q: What is significant for investors about Carvana’s 31% stock price spike this week?
A: Retained losses since 2016 are over $30 per share and projected to continue.

 

Headline Round Up

*Dallas Offices Downsizing?
*”Big Short” Investor, Steve Eisman, Predicts Stock Market Will Continue to Rally Assuming Economy Stays Fine.
*Investors Bailing on Cathie Wood’s ARK Innovation Exchange Traded Fund (ETF). Average Investor Down 21% Annualized from Inception Based Upon Dollar Weighted Returns.
*After Tax Retirement Catch Up Contributions for High Earners Sunset in January. What does this mean for savers?
*Goldman Sachs Earnings Fall 58% Due to Real Estate and Consumer Losses in Q2. Profitability also fell to 4%.
*Crowdfunding Real Estate Funds Vanished According to Bankruptcy Court Papers!
*Current Pay Raises Top Inflation Finally After 2 Years & Yet Producer Prices Rise Only 1/10%.
*Chinese Junk Bonds Plummet While Defaults Mount in Worst 3 Day Slide Since November.
*AT&T Hits 31 Year Low Over Lead Encased Telecom Cable Clean Up Costs.
*Ford Slashes F-150 Electric Prices! Ford is on track to lose over $3 Billion in Electric Vehicle (EV) Effort.
*Mexico’s PEMEX a “Hotbed of Bribery.”
*FINALLY! Tesla’s Cyber Truck, Made in Austin, is Here!
*Innovator Equity Defined Protection ETF Provides “100% Downside Protection.” What could possibly go wrong?
*OPEC Predicts Tighter Oil Market for 2024.
*Citigroup’s Ed Morse Sees $90 Ceiling Per Barrel Oil with $70 Floor.
*Criminal Gender Pay Gap? Embezzler Samuel Bankman-Fried Got $2.2 Billion While Girlfriend Caroline Ellison Just $6 Million?
*No Incentive For Efficiency: Government Offices Only 50% Attended?
*Magnolia Arkansas Could Become the Epicenter of the Lithium Boom?
*Canada Goes Nuclear!

 

Dow Jones Industrial Average (07/21/2021 – 07/21/2023)

– Courtesy of Bloomberg LP

Standard & Poor’s 500 Index – Quarterly Earnings Analysis By Sector (05/16/2023 – 08/15/2023)

– Courtesy of Bloomberg LP

Invesco QQQ Trust Series 1 (07/21/2021 – 07/21/2023)

– Courtesy of Bloomberg LP

Department of Energy – Total Change in Cushing, OK Crude Oil Inventories Data (07/20/2022 – 07/20/2023)

– Courtesy of Bloomberg LP

Standard & Poor’s Case-Shiller Dallas Home Price Index, Non Seasonally Adjusted (07/21/2020 – 04/30/2023)

– Courtesy of Bloomberg LP

Carvana, Co. (01/01/2016 – 07/21/2023)

– Courtesy of Bloomberg LP

 

Profit Report

Has your current advisor actually read your Trust and Will?

 

McGowanGroup Wealth Management
Q3 2023 Client Update

Disinflation and Possible Financial Outcomes Through 2026?
At this writing, Inflation has plummeted from 9.1% annually to 3% according to the Consumer Prince Index (CPI) annual measure. According to the Federal Reserve most recent projections, by 2026 the Federal Funds Rate is likely to be near 2%. So far, Gross Domestic Product (GDP) economic growth has remained healthy, near 2%, despite prevalent headlines of a “Looming Recession.”
A Potential Magic Carpet Ride for High Cash Flow Assets?
In previous Disinflation cycles, after reaching the peak Federal Funds Rate to control inflation, the Federal Reserve begins to return interest rates to normal. Net present value of future cash flows is higher when the competing discount rate is lowered. After 18 months of pressure on investment asset prices, the path to normal cash rates of 2-3% instead of over 5%, is likely to bring higher values for high cash flow assets including:
• Discounted Global High Yield Bond Funds
• Energy Infrastructure Assets
• Dividend Companies
Perspective Reversal of Prior Investor Pessimism?
Cautious optimism appears to have contributed to the legendary successes of Warren Buffet and Sir John Templeton. The negative equity market forecasts in late 2022, including economic contraction, so far have been proven wrong. Investors who enjoyed positive outcomes in the first half of 2023 appear to have shifted into a more optimistic perspective for now.

Research Round Up!

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*AllianceBernstein: Nasdaq Rebalancing July 24th, What’s The Big Risk to Big Tech 7?
*Nuveen: Tightening Cycle Over.
*Calamos: Why Bullish on Energy?
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