W.P. "Bill" Atkinson, III

Certified Financial Planner TM / Attorney

Access Financial Resources, Inc.

3621 NW 63rd Street, Suite A1

Oklahoma City, OK  73116

(405) 848-9826

www.afradvice.com / bill@apaplans.com

July 2024
Market Update
(all values as of 10.31.2025)

Stock Indices:

Dow Jones 47,562
S&P 500 6,840
Nasdaq 23,724

Bond Sector Yields:

2 Yr Treasury 3.60%
10 Yr Treasury 4.11%
10 Yr Municipal 2.73%
High Yield 6.53%

YTD Market Returns:

Dow Jones 11.80%
S&P 500 16.30%
Nasdaq 22.86%
MSCI-EAFE 23.69%
MSCI-Europe 25.44%
MSCI-Pacific 25.83%
MSCI-Emg Mkt 30.32%
 
US Agg Bond 6.80%
US Corp Bond 7.29%
US Gov’t Bond 6.51%

Commodity Prices:

Gold 4,013
Silver 48.25
Oil (WTI) 60.88

Currencies:

Dollar / Euro 1.15
Dollar / Pound 1.31
Yen / Dollar 153.64
Canadian /Dollar 0.71

Macro Overview

Markets were influenced by election dynamics and economic data in June as equities and bonds responded to uncertainty surrounding the direction of future fiscal policy and when the Fed might commence its rate reduction initiative.

Equity indices ended the second quarter mixed as the S&P 500 Index and the Nasdaq Composite Index outperformed the Dow Jones Industrial Index. Technology related companies advanced during the quarter while energy and industrial companies lagged.

Big banks underwent a stress test, which is imposed by the Federal Reserve to determine financial viability as well as the ability for banks to withstand severe economic and financial shocks. All 31 banks tested remained above their minimum capital requirements during the hypothetical severe recession scenario, and are considered well-positioned to weather a severe recession and continue lending.

The most recent employment report showed that the unemployment rate rose to 4.1%, incentivizing the Federal Reserve to consider lowering rates sooner rather than later. Companies have been slowing their rate of hiring as well as increasing layoffs across various industries. Economists view these dynamics as indicative of decelerating economic activity. Some analysts expect the Fed to initiate rate reductions as early as September should economic data continue to substantiate slowing growth trends.

European central bankers, academics, financial market representatives, and journalists met in Sintra, Portugal in early July to exchange views on current policy issues and discuss long-term economic perspectives affecting European countries and the EU. Primary topics included continued inflationary pressures throughout Europe, the ongoing conflict with the Russian invasion of Ukraine, and employment challenges for the region. Subdued economic activity and slowing industrial production were part of the discussions, as Industrial production in the EU dropped by 5.4% between February 2023 and February 2024. The significant year-over-year decrease indicates a slowdown in industrial activity throughout Europe.

Financing costs for new autos remained relatively high in June, even though auto prices have been dropping. The typical monthly payment for a new auto loan set a record high of $740 this quarter, thus reducing consumer demand even as the average price on autos continue to drop due to easing supply chains and ample inventory.

Technology is advancing as companies are reconfiguring their computing infrastructure from information retrieval to an A.I. approach. The changes and advancement are anticipated to take years and are expected to affect nearly every sector and industry.

A model used by the Federal Reserve in valuing residential home values found that homes are now 25% overvalued, just below the 28% peak in 2007. Using the Labor Department’s measure of rent, home prices are 19% overvalued using private measures of market rents. The Fed also follows the S&P CoreLogic Case-Shiller U.S. national home price index, which is up 51% since the end of 2019. (Sources: U.S. Treasury, Federal Reserve, S&P, Eurostat, Labor Dept., ECB, Dow Jones, Nasdaq, Case-Schiller)

 
average amount for a new car loan has fallen to $38,739

Stock Indices Not In Sync – Domestic Equity Overview

The second quarter saw varying performance across the S&P 500 Index, as certain sectors outperformed while others underperformed. Technologies, utilities and communication services saw the largest gains for the quarter, while materials, industrials and energy experienced pullbacks. The S&P 500 Index was up 4.28% for the second quarter, while the Dow Jones Industrial Average posted a -1.73% decrease, and the Nasdaq Composite Index was up 8.5% for the quarter.

Various analysts are identifying a growing disparity among the major equity indices, indicating a market with narrow performance in just a few sectors, rather than broadly covering multiple sectors.

Sources: S&P, Dow Jones, Nasdaq, Bloomberg

Rates Start To Stabilize – Fixed Income Update

As recent economic data revealed a slowing economic environment in the second quarter, rates have begun to stabilize pointing to a downward trend over the next few months. The yield on the benchmark 10 year Treasury bond rose to 4.36% at the end of the second quarter ending June 28th, up slightly from 4.33% at the beginning of the quarter on April 1st. Even though rates have begun to stabilize, consumer loan rates are still elevated and hindering consumers from buying homes to cars.

Source: U.S. Treasury

Average Auto Loan Amounts Head Lower – Consumer Finance

As auto sales have decreased over the past few months, so have the prices paid for automobiles and light trucks. Recent data compiled by the Federal Reserve Bank of St. Louis show that the average amount financed for a new car loan has fallen to $38,739, down from $40,155 in September 2022.

Automobile dealerships nationwide have been accumulating larger inventories of cars and trucks, which they haven’t been able to sell as quickly as before. The disruption of supply chains and availability of auto components during the pandemic elevated prices for new and used cars very quickly amongst an environment of dismal supply.

Now with supply chains restored and product supply back on track, demand has weakened, leaving large inventories and falling prices. Even though prices have fallen, consumers are still seeing larger than average auto payments due to high interest rates. Unless rates drop, consumers may continue to hesitate buying automobiles while dealers continue to amass inventories of unsold cars.

Source: Federal Reserve Bank of St. Louis

 
Building Credit When You Have None
Building Credit When You Have None
The company “Current” stands out in the financial technology landscape with its innovative banking and credit-building approach. One of its most notable features is the Build Card, a secured credit card designed to help users establish or improve their credit scores. Here’s a closer look at how Current’s credit-building feature works and why it’s a valuable tool for many consumers (especially young people with no credit history).
What is the Build Card? The Build Card is a secured credit card that does not require a traditional credit check or history for application. Instead, it operates by using funds that users add to their Current account. This innovative approach allows individuals with limited or poor credit histories to access credit and begin building a favorable credit record.
Financial Advisor Websites Marketing: Learn How To Increase Your Sales
How Does It Work?
  1. Adding Funds: Users add money to their Current account. This balance is used to spend with the Build Card. Unlike traditional secured cards, there is no need to transfer funds separately to the card itself; the available balance in the Current account updates automatically.
  2. Making Purchases: Users can use the Build Card for everyday transactions, whether at a point-of-sale terminal, online, or at ATMs. Each transaction helps build the user’s credit history as payments are reported to TransUnion, one of the major credit bureaus.
  3. Tracking and Managing: The Current app provides tools to track spending and manage balances. Users can enable features like AutoPay to ensure they never miss a payment, which is crucial for maintaining a good credit score.
  4. Building Credit: Consistent use and timely payments help build a positive credit history. The impact is gradual, but over time, responsible use of the Build Card can significantly improve a user’s credit score.
Advantages Over Traditional Secured Cards
Current’s Build Card could be an excellent option for young folks looking to establish their credit or those who rebuild their credit. Its unique approach of integrating spending and credit management within a single app provides convenience and ease of use. Using the Build Card, users can pave the way for better financial opportunities, such as qualifying for loans and lower interest rates.

 

 
Tipping Guidelines in Light of Inflation

China Is Exporting More & Making Cheap Products Cheaper – Global Trade Update

China is flooding global markets, including the U.S., with cheap exports across various industries including steel, electric vehicles, solar panels, computer chips, and other manufactured goods. China’s factories are producing far more goods than its domestic market can absorb, leading to a glut of excess supply being exported at low prices to foreign markets such the U.S. and Europe. This overcapacity issue spans multiple sectors including steel, cars, solar panels, computer chips, and other manufactured products where China has rapidly expanded production capabilities.

China’s global trade surplus in goods has soared to around $900 billion in 2022, more than double the pre-pandemic level, indicating the scale of oversupply. Factors including China’s slowing economy, protracted property slump, and shift in consumer spending patterns have exacerbated the overcapacity problem. The U.S., European Union and other trading partners accuse China of unfair trade practices such as subsidies, intellectual property theft, and forced technology transfers that have enabled the overcapacity trend. China’s government has been subsidizing Chinese companies in order to export more competitively and aggressively.

The current U.S. administration announced major tariff hikes on $18 billion worth of Chinese imports including electric vehicles, solar cells, semiconductors, and some medical supplies to counter the inflow of subsidized Chinese products. The prior administration imposed tariffs of 25% on $300 billion worth of Chinese goods in order to stem the import of such products from China. (Sources: IMF, whitehouse.gov)

Some Tipping Guidelines in Light of Inflation
With inflation affecting the cost of living and consumer habits, tipping practices are also evolving. Based on insights from recent articles, here are some  essential tips to help you navigate tipping in today’s economic climate:
1. Don’t Tip Before Receiving Service or Food – It’s crucial to wait until you’ve received the service or food before tipping. Pre-tipping at the register can lead to subpar service since the incentive for providing excellent service is reduced once the tip is already given. Assess the quality of the service or food first, and then tip appropriately based on your experience. As inflation tightens budgets, it’s more important than ever to tip based on the quality of service received. This ensures that your tips are a genuine reward for excellent service rather than a mandatory expense.
2. Be Aware of Digital Tipping Norms – Digital payment platforms often suggest tipping percentages, which can sometimes be much higher than customary rates. While these suggestions are “convenient,” they are not obligatory even if eyes are upon you at the time. Use them as a guideline, but feel free to tip according to your satisfaction with the service and your financial situation.
3. Understand When It’s Appropriate to Skip Tipping – According to etiquette experts, there are situations where it’s acceptable not to tip. For instance, if a service charge is already included in your bill or if you receive poor service. Additionally, tipping for services like takeout or counter service, which weren’t traditionally tipped, can be skipped.
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