MidSouth Week in Review
December 1, 2023

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

The S&P was up 8.9% for the month of November and was up 0.8% for the week.  It logged in its strongest month since 2022, all due to inflation coming down. The 30-year mortgage rate has fallen five times in a row to 7.22%. Gold hit a new recent high of $2090, the highest since May. The Regional Bank Index (KRE) was up 18.5% for the month due to the 10-year Treasury yield dropping from 5% to a new recent low of 4.22%, and was up 5% today.  Sources:  Wall Street Journal and New York Times

Rate Cutting – Investors are increasingly concerned the Fed will cut interest rates in the first half of next year.  Interest rate futures indicate a 60% chance the Fed will lower rates by a quarter percentage by May – SFMA

Bankers – They will lend you their umbrella when the sun is shining but ask for it back the minute it starts raining.

Stock Picks – In general, the factors to seek in stocks next year will be value and of quality PE ratios and a bit above their long-term average now, implying that stocks aren’t super-expensive, but they aren’t a particular bargain now either – The Kiplinger Letter

House Renting – is cheaper than buying for many folks.  Despite the costs of renting and homeownership both increasing after the pandemic, renting is more affordable than owning in most metro areas – The Kiplinger Letter

Interest Rates – We see the Fed cutting rates slowly over 2025 and 2026, taking its benchmark rate to a range of 3.5% - 3.75%, assuming inflation keeps coming down gradually first – Fed Chair Jerome Powell

State Moving – In one March poll, 40% of Americans said they were somewhat or very likely to relocate to a state that better fits their political beliefs – THE WEEK

Small Cap Stocks – have fallen way behind bigger peers by the widest margin since 1998.  Higher rates have hurt smaller companies more than their larger peeps – Wall Street Journal

Record High Home Prices – A shortfall of properties for sale fed into a record high of home prices in September – Wall Street Journal ….. The U.S. is on pace for the lowest home closings since 1999 – Bloomberg

The Worst Mutual Funds of The Decade – 10-year annual returns:  No. 1 – ProFunds Ultra Short -39.4%, Rydex Index -39.2%, ProFunds UltraBear -25.0%

Driverless Vehicles – in San Francisco more than 600 self-driving vehicle accidents were documented from June 2022 to June 2023.  Austin, Texas had 52 incidents from July 8 to October 24.  Silicon Valley introduced robo taxi services in November 2022 – New York Times

The Pandemic – Since it started there has been a massive migration out of California and now to Florida.  While California lost 350k residents, Florida has gained 450k.  Texas has seen a large inflow of residents, adding 310k since the pandemic.  With the rise of remote work, New York has lost over 300k residents.  While the pandemic is over, its impact will be felt for many years to come – The Kobeissi Letter

Alzheimer’s Disease – Of the roughly six million U.S. adults over the age of 60 who have Alzheimer’s disease, almost two-thirds are women.

Grumpy On The Job – Americans, by many measures, are unhappier at work than they have been in years.  Despite wage increases, more paid time off and greater control over where they work, the number of U.S. workers who said they are angry, stressed and disengaged is climbing, according to Gallup’s 2023 workplace report.

Housing Affordability – is at its lowest point in almost two decades.  It has continued to worsen this year as mortgage rates have hovered above 7% since mid-August – The Kiplinger Letter

Most Shorted Stocks – Tesla $16.9 bil, RTX Corp $9.1 bil, Exxon Mobil $3.8 bil, Chapter Comm. $3.5 bil, Chevron $3.5 bil, Airbnb $3.4 bil – Kobeissi Letter

Tips -37% of people say 15% is their standard tip at a sit-down restaurant.  Two percent say they tip nothing – CNBC

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The material was prepared by MidSouth Investment Management LLC, and does not necessarily represent the views of the presenting party, nor their affiliates.  This information has been derived from sources believed to be accurate.  Please note – investing involves risk, and past performance is no guarantee of future results.  The publisher is not engaged in rendering legal, accounting or other professional services.  If assistance is needed, the reader is advised to engage the services of a competent professional.  This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.  This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.  This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.  All economic and performance data is historical and not indicative of future results.  Market indices discussed are unmanaged.  Investors cannot invest in unmanaged indices.