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What Happened Last Week and What It Means to You: Week Ending March 1, 2024

The ISM manufacturing PMI unexpectedly moved deeper into contraction territory last month…Dragged lower by inventories and employment.

What does it mean – While we saw a slight lift in January and saw the reading come in close to 50, which would reflect growth (above 50 represents expansion or growth in the sector) for the first time in over a year. Yet, the trend reversed as inventory buildup continues to plague manufacturing and slowdown in hiring in the manufacturing sector. Here is a look at a couple of key charts.


It’s hard to see a strong recovery when inventories outstrip new orders further slowing employment in the manufacturing sector.



Manufacturing…It’s all about China. Or China’s lack of respect for patent laws and the rule of law.

What does it mean – While China has been the biggest benefactor of the U.S companies offshoring manufacturing for the last 30 plus years, its lack of integrity and forced IP sharing is now coming home to roost. Large multi nationals are struggling as they have finally figured out they have been duped by the Chinese. They literally funded their competition and willfully handed over their intellectual property. Trading their shareholders value for the promise of access to the Chinese markets.


Small manufacturing benefitting…Small and midsized manufacturing benefiting from companies looking to move away from the China risk.

What does it mean – Small and mid-size manufacturing firms here in the U.S. are seeing new orders while the large firms struggle with dependence on China. Why such a disconnect? The ISM data tends to concentrate on larger multinationals, while S&P Global surveys encompass a more representative mix of companies across various sizes.

Amid slower growth in China and Europe, large multinationals are encountering more obstacles compared to domestic industrial companies. Shares of small- and mid-cap industrials have outpaced both their benchmarks and larger-cap counterparts. The ISM manufacturing PMI weakness, therefore, is not representative of the broader US economic activity as small manufacturers are benefiting from the continued relationship large companies are dealing with inside of China. Until they can disconnect or eliminate much of the dependency on China mid and small manufacturing companies will gain more traction. China’s global initiatives and policies have ultimately wreaked havoc on manufacturing here and abroad.


It would not be a Friday…Without the Department of Energy (DOE) and this administration issuing another rule or regulation to squeeze the American taxpayer and consumer.

What does it mean – Biden administration finalized regulations for residential clothes washers and dryers on Thursday. O.H. Skinner, the executive director of the Alliance for Consumers, is quoted as saying, “Another day, another regulation from the Biden administration to remove products from the shelves and limit what people can buy in the name of their ideological goals. At this point, consumers have gotten the message: if it moves or has a motor and it is in your house, Biden would like it to cost more and probably be less effective.”

Get ready folks. If these policies continue to stand, and congress continues to allow an unelected bureaucracy to create, implement, and oversee regulations, your cost of government will continue to grow unchecked, and you will be subsidizing the world as no other country is doing more to transfer wealth and punishing the consumer and taxpayer like this administration. It will hurt business from the manufacturer, distributor, maintenance company, and the ultimate user, you. This is inflationary!!!


Durable goods orders drop…Durable goods orders dropped sharply in January.

What does it mean – Transportation, or more specifically the aircraft orders saw the largest decline. Excluding transportation orders, the overall numbers still came in negative. Moreover, capital goods orders are now lagging shipments, signaling weaker demand.


Inflation…In the latest PCE inflation report we saw the CPI and PPI increase and accelerate in January.

What does it mean – Like we have been saying for months. Don’t bet on a rate cut anytime soon. The experts are now saying it may come at the end of June. While the government “bean counters” think they have it right, the reality is that the longer that rates stay the same, go higher, or fall at a slower pace than they want, the cost to carry the massive U.S. debt becomes more expensive and will be like an anvil tied to the neck of a deep-sea diver. The diver only has so much oxygen in the tank. Margaret Thatcher was right, “The problem with socialism is that you eventually run out of other people’s money.”

Yet, with numbers like this and the massive spending bills and continued executive orders to transfer your taxes and our nation’s wealth to illegal aliens and folks residing in massive homeless shelters reflecting the 2020’s version of the “Great Depression”, government or socialism is growing out of control. If we as a nation stay on the same tract, you can expect more inflation, more debt and less of your hard-earned money in your account as our fiscal policy has evolved in one that values transfer payments (wealth redistribution) over wealth creation.

The reality is the federal government spending is way too high. Our elected officials and our citizenry do not seem to care or are addicted to the “free handouts” and false sense of security that a bigger government will solve more problems and cost you less. Nothing is free.

Unfortunately, apathy and lack of knowledge by our citizens of what governments responsibility is and is not have allowed bureaucracy to run amuck while our elected officials are fixated on the next election instead of protecting your constitutional rights.

What amazes me is the strides in new technologies like Artificial Intelligence (AI), that is raising productivity and creating new frontiers and advances in many industries, yet we allow the pundits to vilify or belittle the success of those who take the risk to invest in these technologies. Yet, history has shown that a huge and ever-growing government acts like a ball and chain on the very benefits that private industry and private investors create, develop, maintain and inspire.

Below are two great charts by First Trust highlighting the issue and the sheer size and growth of transfer payments otherwise known as welfare and social spending.



At the moment, the markets are ignoring several massive head winds that include the following: the compounding and increasing American and global debt, massive government spending, constantly growing bureaucracies, and increased regulations that lead to higher costs of capital and ultimately slower growth. The markets and industry experts are assuming a soft landing with lower interest rates. Yet, as valuable economic growth is undermined by the above issues, the less likely we will see the necessary growth to reverse the trend or lower rates due to massive government spending and the sheer increase in government regulations and cost of capital.

As Smokey the Bear use to say, “Only you can prevent wildfires.” Get informed and stop the insanity.

Here is the great news. We are a constitutional republic. Our constitution works when we have a well informed and educated and motivated citizenry. If you would like a copy of our constitution, I will get you one. Make sure your elected officials adhere to the very government they swore to protect. Their power is on loan by, us, “we the people”. Make them earn it every election.


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.

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.