ARTICLES

An Alternative To Money Market Funds

November 2024

MARKET OVERVIEW
October is behind us and what an amazing month it was!! The Dow Jones Industrial Average (DJIA), the S&P 500 and Nasdaq all reached all time highs during October. As of October 31, the DJIA was up 10.81%, the S&P 500 was up 19.62% and the Nasdaq was up 20.54%.

Some items of note: Boeing and its union leaders have reached a tentative agreement to end the strike with a vote set for Monday, Nov 4. Qualcomm and Intel have reportedly been in deep acquisition talks, Comcast is considering splitting off its cable tv units, Exxon and Chevron both reported strong quarterly earnings with Exxon increasing its quarterly dividend to 99c/share, Volkswagen and Ford joined the list of automakers who announced reductions in their EV production, AT&T and Corning have agreed to expand their relationship for producing fiber, the New York Stock Exchange is considering a plan to expand the trading day up to 22 hours per day, Southwest Airlines reached a settlement with the activist investor Elliott Investment Mgmt. while Uber and Expedia have held takeover talks. Finally, Nvidia and Sherwin Williams will join the DJIA replacing Intel and Dow Chemical effective before the start of trading November 8.

ECONOMIC SUMMARY
Friday’s Nonfarm Payroll Report was surprisingly weak as only 12,000 jobs were added, well below forecast. In addition, the payroll gains for the previous two months were revised lower by 112,000 jobs. The unemployment rate held steady at 4.1% while the U-6 rate also held steady at 7.7%. Average hourly earnings rose by 4% last month.The November nonfarm payroll report will be released on December 6, the final report for 2024.

FEDERAL RESERVE
The Fed announced a 50 basis point cut in its base lending rate on September 18, surprising many analysts who expected a 25 basis point cut. This cut takes the range down to the level of 4.75% - 5%. The Fed will meet again November 6-7 with a rate cut of 25 basis points expected. It will hold its final meeting on December 17-18.

STOCKS TO WATCH
It is no secret that China’s economy is experiencing many problems. For example, Estee Lauder announced last week it was pulling guidance for 2025, slashed its quarterly dividend from 66c to 35c. Its share price has taken a drubbing during 2024 due to weakness in China and other Asian markets. Its 52 week high of $159.75 was reached on February 5 while its 52 week low $63.36 was reached last Thursday, October 31.

Recently, both Reuters and CNBC reported that major airlines around the world are now cutting service to China or eliminating service altogether. Virgin Atlantic and Scandinavian Airlines are among the airlines that have eliminated service to China. Chinese consumers have also been
cutting back spending, especially on travel out of China. This low demand  has also had an impact on Chinese airlines. In fact, China Southern, China’s largest airline, lost $4.8 billion in 2022 according to CNBC. It will likely be a while before China's economy recovers.

My weekly radio show is now on holiday and should return soon on WWPR 1490 AM. My prior radio shows and columns are available on our website (www.amescapmgmt.com).

If you are unhappy with the returns now offered by money market funds feel free to contact us.

Disclaimer

The material contained in this website is for your private information. We are not soliciting any action upon it. The opinions expressed here are our present opinions only. The material is based upon information which we consider to be reliable. No representations are being made that it is accurate and complete and thus should not be relied upon as such. Past performance is neither an indication nor guarantee of future performance.