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What Happened Last Week and What It Means to You: March 2, 2023

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Week Ending February 24, 2023

The January PCE inflation measure topped expectations…particularly the core index. US inflation continues to run hot.

What does it mean – With food and energy continuing to hit consumers wallets, inflation rates are not nearly low enough to suggest the Fed would even be thinking about cutting rates this year. Food index increased 0.5% month-over-month and was up 10.1% year-over-year. The energy index increased 2.0% month-over-month and was up 8.7% year-over-year.

Treasury yields jumped…Check this chart out.

What does it mean – Due to the inflation numbers expect rates to rise and a bit more pain in the bond market.

New home sales decrease…According to the census bureau the median sales price of new homes decreased 0.7% yr/yr to $427,500 while the average sales price dropped 5.4% to $474,400.

What does it mean – By region, month-over-month/year-over-year volume gets crushed out west. The only positive is the South…hmmm. Northeast (-19.4%/-13.8%);

Midwest (-6.9%/-34.3%); South (+17.1%/-2.2%); and West (-7.3%/-46.9%).

 

Manufacturing activity contracted in January…For the third straight month manufacturing contracted.

What does it mean – The cumulative effect of rate hikes around the globe is adversely impacting demand, evidenced by the fifth straight contraction in the new orders index.

 

Deutsche Bank’s model shows a 90% chance of recession over the next 12 months…However, only 12% of the Russel 3000 companies have mentioned “recession” on earnings calls. This is down from its peak in Q4 of 2022.

What does it mean – The silence is deafening. According to Deutch Bank, the possibility of a recession is up to 90%. I guess if you don’t say the “R” word, it won’t happen. Or is there a possibility that companies are seeing something that the Fed and Wall Street do not see? Or, has corporate America learned that big government needs big business and corporate America has learned that with a bit of pain it can rely heavily on its partner in dependency – the government. I believe “Big Business expects Big Government” to do whatever it takes to protect their mutual interests. And that is not always the taxpayer or the American entrepreneur. Remember “TO BIG TO FAIL.”

Labor Secretary Marty Walsh resigned…The day after the jobs number was released the Labor Secretary, Marty Walsh, resigned and decided the NHL labor union was safer than the swamp.

What does it mean – Remember three weeks ago (2/3/23) we reported that the Philadelphia Fed’s own numbers questioned the integrity of the Federal Bureau of Labor Statistics (BLS). That the Philadelphia Fed found that using data on 33 states plus the District of Columbia from the Quarterly Census on Employment and Wages show that payroll gains were officially reported in Q2 were significantly overstated. Instead of 1.05 million jobs, the US only added 10,500. That’s a downward revision of 99%. This week Moody’s says the real numbers just released is less than half what was reported. No wonder Marty Walsh resigned. How long can you keep telling the American people to stop believing their lying eyes?

Is there any integrity in DC? Along with the myriad of other issues misreported or labeled misinformation, including China and the latest information confirming the origin of COVID, Vaccines and the hiding of data by big pharma, CDC, NIH, and the FDA, business closures, the border, illegal immigration, and the many reports from government agencies, it is no wonder the trust in government is at an all-time low. The numbers do not jive with what you are seeing. Inflation is out of control, we give billions to Ukraine and let our own citizens suffer in East Palestine, Ohio. It is now crystal clear why President Biden went to Ukraine right after he authorizes a blank check for $500 million and three days later Janet Yellen takes a trip to Ukraine and promises an additional $10 billion for pension plans and infrastructure. I doubt Russia is quaking in their boots while President Biden wastes your tax dollars funding Ukrainian pensions. Hold them accountable at www.americanmadepromise.com

Let’s roll America!!

Doug De Groote, CFP®, MBA, CTC
Managing Director

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

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Jeannie Ewing-Nicholson

Operations Manager

Jeannie started her career in the Financial Services industry in 1994 with Oppenheimer & Company. As part of the De Groote Financial Group, Jeannie is responsible for the operational needs of the firm including cash management and account administration. With her upbeat attitude and attention to detail, Jeannie provides an efficient streamlines experience to ensure clients meet their goals. Jeannie enjoys travel, outdoor activities, Pilates, and is a football and basketball fan. She resides in Westlake Village with her husband, daughter and son.

Mary-Ellen Lykken

Executive Assistant

Mary-Ellen, Executive Assistant at DFG, keeps the office running smoothly by providing administrative support and assisting with scheduling and organization. With a background in human resource and office management, Mary-Ellen comes from the non-profit and services industries.

Outside of the office, Mary-Ellen is committed to the advancement of independence and productivity for those with disabilities. By telling her story of the challenges and joys of raising a child with complicated disabilities, she hopes to help others navigate similar circumstances.

She is happiest when visiting her two grown sons. Otherwise, you can find her competing on the pickleball courts.

Sara Mariniello

Operations Manager

Sara is new to the financial industry only starting in 2022 when she was hired at De Groote Financial. As Operations Manager, Sara is responsible for all the paperwork surrounding opening accounts and investment paperwork and is also responsible for much of the client communication. Sara has her bachelor’s in science and nursing from Concordia University, Texas and worked as nurse for over a year prior to moving back to California. She loves all things sports and church related and is likely spending every free moment with her Husband visiting family in Texas and New Jersey.

Fadi Ahmed

Chief Operations Officer and Chief Compliance Officer

Fadi works with clients to ensure an exceptional experience. He coordinates and assures the planning process and wealth management tools are at your fingertips to provide the clarity you deserve and the transparency and access to all your accounts. Fadi ensures the data and information is reflective in our planning software. All changes and updates flow through his desk and he coordinates those changes with the rest of our team.

Andrew Krout

Wealth Advisor, Co-Chief Investment Officer

Andrew Krout is a Wealth Advisor at De Groote Financial Group, LLC. He also serves as a Co-Chief Investment Officer for the firm, focused on wealth management.

Previously, Andrew served as CIO with Kelly Financial in Boston Massachusetts since 2013. He is a licensed investment advisor representative and insurance producer. He graduated from Saint Francis University with a bachelor’s degree in both finance and accounting. He is a candidate for CERTIFIED FINANCIAL PLANNER™ designation. Andrew holds life insurance licenses in Massachusetts, New Hampshire and Connecticut.

Andrew is passionate about serving his clients and investment management and how to apply news and current events to investment decisions. He played Division 1 golf in college, and still enjoys playing and watching the sport in his free time.

David Darst

Co-Chief Information Officer

David Martin Darst, CFA is an Investment Advisor to DeGroote Financial Group, specializing in asset allocation and product selection. Previously, David served for 17 years as a Managing Director and Chief Investment Strategist at Morgan Stanley Wealth Management, with the responsibility for Asset Allocation and Investment Strategy. He joined Morgan Stanley in 1996 from Goldman Sachs, where he held Senior Management Posts within the Equities Division and earlier, for six years as Resident Manager of their Private Bank in Zurich.

David is the author of 13 books, including bestsellers The Art of Asset Allocation, 2nd Edition (McGraw-Hill), and The Little Book that Still Saves Your Assets (John Wiley & Sons). He also appears as a frequent guest on CNBC, Bloomberg, FOX, PBS, and others, and has contributed articles across a variety of publications.

David graduated with a BA in Economics from Yale University, and earned his MBA from Harvard Business School. He has lectured extensively at Wharton, Columbia, INSEAD, and New York University Business Schools, and for nine years, David served as a visiting member at Yale College, Yale School of Management, and Harvard Business School. He is a CFA Charterholder and a member of the New York Society of Security Analysts and the CFA Institute. 

Doug De Groote

Managing Director

Doug is a Certified Financial Planner™ (CFP®) with an MBA in Financial Planning, and is an active member of the Financial Planning Association (FPA). Before establishing De Groote Financial Group, Doug founded the United Wealth Management division of United Capital. Prior to that, Doug was a partner at Crowell, Weedon and Co. He regularly contributes to a variety of financial and general media.

Doug’s passion, and what he believes, is that everyone deserves the opportunity; they deserve to have the freedom and responsibility to be pro-active in achieving independence and financial success.

Doug’s life is focused around his family, wife and three children, and making sure they get the foundation that is necessary for them to have the awareness of the opportunities that abound in our great country.

Doug helps increase his client’s awareness and success, to identify and take advantage of opportunities that present themselves and help protect them from some of the pitfalls or obstacles that are thrown in our paths. With regards to their financial circumstances, Doug helps his clients identify their goals, plan for various outcomes and manage their assets to help them make their vision a reality.