Weekly Market Update by Retirement Lifestyle Advocates

Interesting Parallel

         Bravos Research published this chart on “X.” It’s an overlay of a price chart of the Dow Jones Industrial Average at the present time with a Dow Jones Industrials price chart from the 1920s.

         The research firm noted that the 1920s saw the greatest rally in stocks ever, at least to that point.  That huge rise in stocks was followed by the worst crash in history.

         While that fact alone doesn’t mean a crash is imminent, stocks are beginning 2025 looking weaker, and the bull market that we’ve experienced since the stock market bottom in 2009 has been historic.

         At the market low in 2009, the Dow Jones Industrial Average stood at about 10,500.  Today, the Dow is at about 42,000.  That’s an increase of just about exactly 400%!

         By contrast, the Dow rose about five-fold from trough to peak in the 1920’s.

Judge Rules ESG Investing Focus Violates Fiduciary Duty

         A federal judge has ruled that American Airlines breached its fiduciary duty to employees by hiring the investment firm Blackrock to manage part of the retirement plan for the company’s employees. 

         While Blackrock was not a defendant in the case, the investment firm was front and center during court proceedings.  Blackrock CEO Larry Fink was quoted during court proceedings.  Mr. Fink, in 2018, stated “that companies must contribute to society…or risk losing the support of the world’s largest asset manager.”  (Source:  https://www.zerohedge.com/markets/judge-american-airlines-esg-tainted-401k-breaches-fiduciary-duty-workers)

         ESG is an acronym standing for environmental, social, and governance goals like fighting climate change or promoting diversity in the workforce.

         The judge in the case, Reed O’Connor, noted that ‘Blackrock’s ESG influence is evident throughout the administration of the plan.  By focusing on non-pecuniary interests, ESG investments often underperform traditional investments by approximately 10%.

         We’ll have to see if more lawsuits are brought by plan participants where sponsoring employers take an ESG focus in the investment management of employee retirement plans.  401(k) plans at 60% of Fortune 100 companies contain Blackrock investments.

More Inflation Coming?  Money Supply Expanding

         Money supply growth year-over-year grew for the fourth consecutive month during the month of November.  (Source:  https://www.zerohedge.com/markets/judge-american-airlines-esg-tainted-401k-breaches-fiduciary-duty-workers)

         That’s the first time that money supply has grown for four consecutive months since October 2022. 

         Year-over-year, during the month of November, money supply grew by 2.3%, which is a 27-month high.

Government Bond Auction a Flop

         US Treasuries continue their meltdown as rates continue to rise.  The 10-year US Treasury auction conducted last week saw the yield on 10-year US Treasury notes rise to the highest level since August of 2007 at the time of the financial crisis.  (Source:  https://www.zerohedge.com/markets/ugly-tailing-10y-auction-flops-despite-highest-yield-2007)

         Perhaps the reckless spending of the US Government is now seeing consequences as the US Government attempts to sell and refinance debt.  As I have been noting here, since the Federal Reserve began to cut the Fed Funds rate in September, the Fed has cut the overnight lending rate by a full percentage point.

         Over that same time frame, the interest rate on the 10-year US Treasury note has risen about 1%.

Permanent Daylight Savings Time?

         A bipartisan bill was introduced in the US Senate last week to make Daylight Savings Time permanent.

         The bill, which was actually reintroduced after not getting traction before, would have the United States permanently adopt daylight savings time, ending the twice yearly ritual of “springing ahead” and “falling back”.

         Senator Rick Scott of Florida and another 15 Senators are sponsoring the Sunshine Protection Act.  (Source:  https://www.theepochtimes.com/health/senators-introduce-lock-the-clock-bill-to-make-daylight-saving-time-permanent-5788680)

         The American Academy of Sleep Medicine opposes permanent daylight savings time, arguing that standard time should be permanent instead since it is better for health and safety.

         The Academy states that standard time more closely aligns with the body’s natural sleep rhythms, and daylight savings time harms sleep-wake patterns.   

         Opposing the Academy’s position are organizations citing studies that conclude daylight savings time reduces crime and leads to fewer car accidents.

         Retailers are also in favor of permanent daylight savings time, stating that it creates more after-work shoppers.

         I, for one, would welcome the change.

         This week’s RLA radio program features an interview with Michal Oliver, founder of Momentum Structural Analysis.  Michael has developed an uncannily accurate method of evaluating and forecasting where markets will go in the future.   The interview is posted and available now by clicking on the "Podcast" tab at the top of this page.

"You can make a lot of money in this game.  Just ask both my ex-wives.  Both of them are so rich that neither of their husbands works.”

                                                               -Lee Trevino