This week in the market produced a mix of data points painting opposing pictures. Consumer sentiment, which is measured by The University of Michigan’s Index of Consumer Sentiment, is up somewhat with the September level at 69, up from 67.91. This is the most positive reading since May. Expectations for personal finances and the economy were up even as unemployment rate data weighed on survey-takers.
As far as employment numbers go, youth unemployment is not really working for anyone (pun intended), as the US unemployment rate for 16 to 24-year-olds leapt up to 9.7% in August – the worst reading since June of 20212. This rate has increased by over 3 percentage points in the last 18 months. This is the type of data that usually precedes an economic slump. It’s noteworthy that nearly 16% of 18 to 24-year-olds are neither employed nor enrolled in a school. (So, if you happen to see any 18 to 24-year-olds lounging nearby, please tell them to get off their butts and do something …). Overall, the unemployment for the entire country is 4.2%. That’s close to a 3-year high.
After the interest rate cut, we’ve seen certain more economically sensitive sectors rally in the market. Real Estate Investment Trusts, or REITS, saw a huge surge in buying as they are debt dependent, so any decrease in financing costs due to interest rate cuts benefits them enormously. Because of this, our Investment Committee this week added a REIT to our Monthly Cashflow Equity ETF Portfolio as the yield was good and the prospects are improving for it in a lower interest rate environment. We also increased the allocations to option income-based ETFs that have performed well in the same portfolio.
Other sectors that are seeing very positive price action include utilities and non-oil commodity stocks. Due to performance of some stocks surpassing 20% over a 3-month time frame, we’ve decided to go ahead and rebalance the Christian Values Income Portfolio to take profits on a pretty good run for many of those stocks over the last few months.
If you or anyone you know would like to try to Align their Wealth with their Faith, please ask us about our Christian Values Portfolios and ask us for a copy of our paper on the topic. We always want to make sure your investments with us at The Wealth Training Academy reflect not just the risk you want to take in the market, but your values as well. We remain your financial planning servants. If there is anything you need, whether it be more income, an alignment of your values and your investments, or simply someone to listen to your inflation frustrations, please call us!
Sources:
1Surveys of consumers, University of Michigan, http://www.sca.isr.umich.edu/?os=vb_&ref=app
2The Kobeissi Letter: @KobeissiLetter
