MidSouth Week in Review
June 3, 2022

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

During the holiday shortened week, the S&P declined 1.2%.  Crude hit its highest level since March and wholesale gas soared to $4.30 from its $3.00 April low.  Three-quarters of Fortune 500 CEOs say they expect a recession to begin by the end of 2023.  Mortgage rates dropped for the third straight week.  The unemployment rate hit 3.6%, which is just barely above a 50-year low.  Copper, which is an indirect play on electric cars, jumped from its $4.05 May low to $4.58 today. Lumber declined from its March high of 1365 to 620 today.  Economic confidence fell in May to its lowest level since early 2009, when the great recession was ending.  Sources:  Wall Street Journal and New York Times

BuzzBits

June – The sixth month has a stormy history for the stock market, especially in a mid-term election year.  In mid-term years, such as 2022, June has been the worst performer since 1950 – Chief Investment Officer

The Rich – When asked how he made his fortune in the market, Bernard Baruch replied, “by merely selling at the top or buying at the top.”

Small-Caps – Since its 2022 closing low on May 11, the Russell 2000 gained 8% while the S&P added only 4.2% - Wall Street Journal

Ouch! -Approximately 36% of Americans who make at least $250,000 per year say they’re living paycheck to paycheck, which Bloomberg suggests underscores how inflation is taking a bigger bite out of Americans’ budgets at all ends of the pay spectrum ….. Income of $250,000 places one in the top 5% of earners in the country – ZeroHedge …..The IRS is taking steps to increase its audit rate of higher income taxpayers after sharp criticism in Congress over its lagging audit numbers – Financial Planning

Gunmen – Six of the nine deadliest mass shootings in the U.S. since 2018 were by people 21 or younger vs. before 2000 when most shootings were initiated by men in their mid-20s to 40s – New York Times ….. Since the Texas school shooting, there have been 20 shootings in which at least four people were hurt or killed – New York Times

Tech Giants – Apple, Amazon, Microsoft, Tesla, Google and Facebook swelled so big in recent years that they accounted for 28% of the S&P gains.  Those six firms plus Netflix and Nvidia are now responsible for 46% of the benchmark’s total 2022 losses – Wall Street Journal

Gas – The average family is now spending $5,000 a year on gasoline vs. $2,800 a year ago – CNBC

Lime and Bird – were riding high in 2019.  Now the scooter companies are having tough times.  Bird has laid off 30% as both companies have seen their active users drop over 70% - The Hustle

Top Gun: Maverick – featuring Tom Cruise and Val Kilmer, opened to a blockbuster $156 million in the U.S. and Canada over the long weekend, a box-office record for the holiday.  An Elvis movie is coming out the last week of June and appears to be a great movie, based on the previews – Buzz

Housing – The average rate on 30-year mortgages has risen to 5.55% vs. 3.1% at the end of December.  According to a recent survey of builders, buyers traffic fell sharply in May and is now below levels right before the pandemic – Wall Street Journal ….. Sales of U.S. homes plunged 16.6% in April, the biggest decline in nine years.

Walking – After 15 years, those who walked an average of at least 7,000 steps per day had a 50% lower risk of premature death vs. those who walked fewer than 7,000 steps daily – Kaber’s Dasgupta, MD., McGill U. ….. Studies show that the extra walking can lower  blood pressure, the No. 1 risk factor for heart attacks and strokes – Bottom Line Health

Younger People – A recent survey of 20,000 people by Deloitte who were born between 1983 and 2003 reveals deep insecurity about their finances.  About 30% say they doubt they will be able to retire comfortably, and 50% say they live paycheck to paycheck, with nothing set aside for emergencies.

Ride Share Apps – Because of labor laws, competition, and a surge in vehicles and pump prices and a shortage of help, prices have surged.  Nationally, average ride-hauling prices in April was up nearly 39% vs. 2019 – YipitData

Treasuries – There was a net inflow of $20 billion in the four weeks for mutual funds and ETFs that focus on purchasing Treasuries, the highest four-week total in 29 years – Bloomberg

Car Insurance – rates are rising as much as 20% as insurers seek increases for which they believe will be more inflation.  During the 1Q, All-State increased their rates 9.3% - Wall Street Journal

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