MidSouth Week in Review
September 16, 2022

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

For the week, the S&P declined 4.8%.  The 5-year government bond yield rose to 3.66% from below 3% recently.  Economists predict a 75 basis points Fed hike next week.  U.S. household wealth declined $50 trillion at the end of last year to $143.8 trillion.  Consumer prices rose 8.3% in August.  The budget deficit rose 29% in August to $220 billion.  Mortgage apps dropped 1.2% last week to the lowest level in 22 years.  Average mortgage rates hit 6% for the first time since 2008.  FedEx declined 25% today after the company said a global slowdown accelerated at the end of August and predicted it would worsen in the November quarter.  Sources:  Wall Street Journal and New York Times

September – is the worst month of the year for Wall Street.  Going back to 1928, the month has averaged a 1.1% loss for the S&P.  Last year the S&P fell 4.8% in September.  Month-to-date the S&P is down 2.0% this September – FactSet

Juries Scare Me – I don’t want to put my faith in twelve people who weren’t smart enough to get out of jury duty – Monica Piper

Investment Advice – “If you expect to continue to purchase stocks throughout your life, you should welcome price declines as a way to add stocks more cheaply to your portfolio” – Warren Buffett

Covid – 85% of those who have died from Covid were 65+.  Covid is on pace to be the third-leading cause of death, trailing only breast disease and cancer – Wall Street Journal

Fed Funds Rate Hikes – is expected to be a 0.75 to 1.00-point rate hike later this month.  Further steep increases are increasingly likely.  Inflation is far from over – The Kiplinger Letter ….. The average rate on savings accounts was just 0.13% in August.  However, smaller banks and online-only banks are paying considerably more.  The current return on the 1-year Treasury bonds is 4% - Buzz

Wholesale Gas – was 50.5 cents in March of 2020 before rising to $4.205 in June of this year.  Wholesale gas is currently $2.42 – Buzz ….. Gas prices may soon rise because Biden’s one-million-barrel-a-day release from the nation’s emergency reserves is set to end in October – Treasurer Secretary Janet Yellen

Hair Loss – A treatment that actually works, only costs pennies a day.  The secret is minoxidil, that cost only pennies a day.  Rather than applying the drug directly to the scalp, doctors have been prescribing minoxidil in very low-dose pills – New York Times

The S&P 500 – is up 1374% since 1993 despite four market crashes – Jay Kumar

Weed – For the National Institute of Health’s annual survey of drug use, 43% of respondents ages 19 to 30 said they used marijuana 20 or more times in the past year, up from 29% in 2011, and 11% said they were daily users, up from 6%.

Consumer Spending – Percentage change from June 2021 to June 2022 – Cosmetics +17%, grocery stores +14%, pet supplies +11%, entertainment +8%, software/electronic stores -8%, Fuel -4%, retail apparel -2% - McKinsey & Co.

Living to 100 – Men 70+ have  a 5.7% chance of living to 100 vs. 9.9% for women.  About 85% of centenarians live in cities where they get better access to health care.  87% of them communicate daily with a friend or family member – New England Centenarian Study

Ouch! – Argentina’s central bank just raised their benchmark interest rate to 75%, a day after their inflation rate hit 80%+ - Reuters

Social Security – The Social Security Administration has projected the 2023 cost-of-living adjustment to be 11.4% if inflation continues at its current pace – CRFB

Working Income – In 1915 the average family income was $687 a year or $13.21 per week…..When I was 16, I worked as a sackboy making 55 cents an hour.  My first job out of college was as a systems analyst making $450 per month.  My 14-year-old granddaughter, Frances McAleer, worked in Nantucket in August at a restaurant and made more than $450 per month – Buzz

Gasoline Prices – are down for 13 weeks in a row.  In California, the average price of gas is $5.41 a gallon, which is 46% higher than the national average.  About 6% of gas stations in the U.S. have gas under $3 a gallon and are mainly located in the South – OPIS

IRS Tax Audits – dropped from 0.9% in 2010 to 0.2% in 2020.  But the decline is poised to rebound because recent legislation has allocated billions of dollars to the IRS – Choice Tax Solutions

The World’s Richest People – Elon Musk $245B, Jeff Bezos $153B, Bill Gates $115B, Larry Page $99B, Warren Buffett $99B, Sergey Brin $94B, Larry Ellison $94B.  One person from France and two from India also made the top ten list – The HUSTLE

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.