MidSouth Week in Review
July 1, 2022

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

The decline in the stock market during the first half of the year (-20.6%) is the worst since 1970.  For the week, the S&P declined 2.3%. The small cap Russell 2000 was down 23.9% year-to-date through 6/30, it’s worst ever since the index’s 12/31/78 inception.  The number of NASDAQ stocks down 50% has hit a record.  The inflation rate was 6.3% in May and unchanged vs. April.  Bitcoin dipped below $19,000.  IPO activity is less than 6% of last year’s pace.  Wholesale gas dipped from its June high of $4.31 to $3.49.  Inflation has not been this high since 1970.  Consumer confidence flipped to its lowest level in 16 months.  Consumer sentiment fell to its lowest point on record.  Sources:  Wall Street Journal and New York Times

The markets will be closed Monday in observance of Independence Day.  Have a good long weekend. 

0% Cap Gains Rates – If your taxable income is less than $41,678 or $55,800 for head-of-household or $83,350 on joint returns – Kiplinger Tax Letter

Let Me Know – In 1974, I was a retail stockbroker and the market had just declined 48.5%.  Everyone was fully invested and no one had any more money to invest.  The secretaries were making more than most of us brokers.  The typical saying in the office was: If you turn down a job, let me know! – Buzz

Series I Bonds – through mid-June, the government sold $14.4 billion of the bonds.  More than 1.5 million accounts have been opened since November vs. less than 1 million that existed prior – Wall Street Journal ….. Both stocks and bonds were down in 1Q.  This has only happened three times since 1976 – Hemanth Kumar

Home Showings – when a potential buyer takes a private home tour with an agent, were down 24% in May vs. last year.  The home affordability index has declined from 210 in 2013 to 180 in 2021 to 115 currently.  The cost of principal and interest has risen for home owners from 14% in 2020 to 23% currently – National Association of Realtors ….. In the span of a few weeks, real estate agents have gone from managing bidding wars to watching properties sit without offers.  The culprit is rising mortgage rates, which have spiked to the highest level since the 2008 housing crisis.  We’ve reached a point where people can’t afford a house - Redfin

Firearm Deaths – Suicides accounted for 24,000 of the 45,222 firearm deaths in the U.S. in 2020 – Center for Gun Violence Solutions

Nursing Homes – face alarming shortages causing many to cut back on new admissions.  87% face moderate-to-high staffing shortages – American Health Care Association

Inflation - is the worst since 1987 and it hasn't peaked yet.  The situation will likely worsen until September, which we think will top out around 9% by late summer – The Kiplinger Letter

July 4 – Three presidents died on this day:  Thomas Jefferson, John Adams and James Monroe.  Calvin Coolidge was born on July 4 – Ledger

Strange – On Wednesday, both the warmest and coldest locations were in California - Centro (110°) and Bodie Park (26°).  The high in Minneapolis was 91° vs. only 72° in Mexico City – USA TODAY

Charitable Giving – in 2021, the wealthiest 1.4% of the country comprised 86% of charitable donations.  Giving is highest among those in their 60s and 70s – Philanthropy Roundtable

Grocery Prices – were 12% higher last month than they were a year earlier – Bureau of Labor Statistics

Rural Counties – within commuting distances of big cities drew in nearly 6 new residents for every 1,000 people already living there from mid-2020 through mid-2021.  The population of the Nashville area had good growth during the period but the population in the city declined by 1% - Buzz

Houses – The average rate on 30-year fixed mortgages has doubled in six months from 3% to 6.28%.  This is likely to drive down home prices by 15 to 20% - Moody’s Analytics

Pregnancies – About 1 in 5 pregnancies in the U.S. ended in abortion in 2020.  There were 930,000 abortions that year, up from 862,000 in 2017 – AP

NYC Wealthy – The top 1% of earners who make more than $804,000 a year, contributed 41% of the city’s personal income taxes.  About a third of those who moved from Manhattan had an average income of $214,300 – New York Times

Used Cars – while CarMax sold 11% fewer used cars in the recent quarter ending May 31, consumers had to shell out $6,311 more in vehicle purchases on average vs. a year earlier.  This was the 2^nd consecutive quarter of declining unit sales.  As of mid-June, new-vehicle inventory was down 70% vs. 2019.  The average price of E-cars rose 22% in May vs. a year earlier – Wall Street Journal ….. Tesla this year has increased prices three times for its top-selling model Y, adding a total of about 9% to the sticker price – New York Times ….. Car dealers face another year with little to sell.  Those that have new cars may try to sell them at $10,000 or more above the sticker price – USA TODAY ….. The average monthly car payment hit $712 in May.  New cars are 26% more expensive than before the pandemic and 19% more than last year – Jalopnik

Elvis – owned more than 260 cars in his lifetime.  The movie about him that was recently released is very good and well done.  https://youtu.be/3GNmMP6FUT8

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.