SFM Observer - November 2023
Issued: December 5, 2023
The Dow closed the month of November at 35,950 for a huge monthly gain of 2,898 points or 8.8%. October told us the American consumer is slowing down spending so why is the market up so much? Because the market believes inflation is now under control and the Federal Reserve will stop raising interest rates. When the Fed stops raising interest rates, the next move is usually down. This has investors excited for lower interest rates. All the markets had a great month with the S&P 500 up 8.9% and the NASDAQ up 10.7%. The holiday season is upon us and Black Friday sales were a little weaker than last year. This is also good news on the inflation front.
Some interesting events from the month just past:
• Six Flags and Cedar Fair are merging to create an amusement park powerhouse. The combined company will be based in North Carolina and will have 27 major amusement parks and 15 water parks. They will have a facility in 17 different states as well as some parks in Mexico and Canada.
• Carmakers are discounting electric vehicles as they start to pile up on dealer lots. The initial rush of consumers who wanted an electric vehicle have bought one and now mainstream buyers are not willing to pay a premium for an EV. However, hybrids are in great demand because they are cheaper and you don’t have to worry about charging stations. Hybrids combine an electric motor with an internal combustion engine so they run on both electricity and gasoline.
• A recent study on the nation’s housing puts NH fourth on the list of states with the biggest housing shortage. According to the report, NH needs 31,000 additional housing units. The pandemic brought many new households to NH whom no longer need to commute every day.
• Amazon has just about everything and next year you will be able to buy a new car on Amazon and have it delivered! Amazon is teaming up with Hyundai to offer car shopping on its site. You can search local inventory, set up financing and pick up your new ride at the dealer or have it delivered. Believe it or not you used to be able to buy a house kit from Sears a hundred years ago. They would ship it to your lot and you put it together.
• An investing legend has left this world. Charlie Munger, Warren Buffett’s partner passed away suddenly at the age of 99. He worked right up to his passing and told people working kept him alive and motivated. He was a very bright and knowledgeable investor that grew up in the Great Depression and saw many investment fads come and go. He was a quick wit and an interesting person to listen to.
Thank you for reading this issue of the SFM OBSERVER.
Happy holidays to all,
Glenn Sweeney CFA