Weekly Market Update by Retirement Lifestyle Advocates

BRICS Expands for Second Consecutive Year

         One year ago, the core BRICS coalition comprised of Brazil, Russia, India, China, and South Africa expanded by four countries when Egypt, Ethiopia, Iran, and the United Arab Emirates joined the anti-US Dollar group.

         Now, effective January 1, 2025, nine new countries will join BRICS.  They include Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Thailand, Uganda, and Uzbekistan.

         BRICS now has about half the world’s population and about 41% of the world's GDP.  (Source:  https://scheerpost.com/2024/12/26/brics-expands-with-9-new-partner-countries-now-its-half-of-world-population-41-of-global-economy/)

         The economic production of BRICS now dwarfs the economic production of the G7, which stands at about 29% of the world's GDP.

         BRICS continues to move toward trade that does not use the US Dollar and the group is continuing to grow and expand its global influence.

China Leads the World in Auto Production

         Last year, global vehicle production reached 93.5 million units.  You might be surprised to learn that the country of China is the world’s largest auto manufacturer – by far.

         The chart below (Source:  https://www.zerohedge.com/economics/china-dominates-worlds-top-car-producer) illustrates.

China produces roughly one-third of all the automobiles manufactured in the world today.  Compare that to roughly 11% for the United States.

Japan trails the United States only slightly, producing 9.6% of all the world’s autos.

G7 member, Germany, produces only 4.4%.  BRICS country India outpaces Germany in auto production by nearly 50%!

Other notable auto producers from the G7 are Canada, Italy, France, and the United Kingdom, combined for about 5.3% of total world auto production.

China produces about 50% more autos than the entire G7 combined. 

Americans Take On Holiday Debt

According to Lending Tree, 36% of American families took on debt to celebrate the holidays.  Those findings were a result of a holiday survey conducted by the organization.  (Source:  https://www.cnbc.com/2024/12/26/36percent-of-american-consumers-took-on-holiday-debt-averaging-1181.html)

Those families who took on debt averaged $1,181 in new liabilities, up from $1,023 in 2023.

Interestingly, half of those who took on debt did not expect to do so.  The reason that these households gave for adding unexpected debt to their personal financial situation was inflation.

S&P 500 Price-to-Book Ratio Now Exceeds the 2000 High

If you’re not familiar with the price-to-book ratio, it is a stock valuation technique that compares a company’s share price to its book value.

To make the price-to-book calculation, one takes the total value of all stock outstanding (market capitalization) and then compares that number to the book value of the company.  The book value of a company is the total value of the company’s assets minus intangible assets and debt.

In other words, a price-to-book value of 1 would have the total stock value of the company and the book value of the company equal.

         The chart on the right (Source:  https://marketsanity.com/sp500-price-to-book-ratio-now-exceeds-march-2000-high/) shows the current price-to-book value of the Standard and Poor’s 500 now exceeds the calendar year 2000 levels.

Mortgage Rates Fell for Three Weeks But Are Now Higher Than One Year Ago

         The average rate on a 30-year mortgage last week rose to the highest level since late November.  (Source:  https://finance.yahoo.com/news/average-rate-30-mortgage-snaps-170103399.html)

         The average rate on a 30-year mortgage rose to 6.72% up from 6.6% last week.  One year ago, the average interest rate on a 30-year mortgage was 6.67%.

         This week’s RLA radio program features a ‘best-of’ interview that I did with the founder of the Financial Survival Network, Mr. Kerry Lutz.  The radio program is posted and available by clicking on the "Podcast" tab at the top of this page.

"New Year’s Resolution: To tolerate fools more gladly, provided this does not encourage them to take up more of my time."

— James Agate