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Special Announcement, Feb 25th – WVRC will be moving its Thursday lunch meeting to a Tuesday dinner meeting, to welcome the RIPE to our Club. It will be designed more as a social event with spouses and significant others. More info is forthcoming. Our evening will begin at 5 PM, include boatloads of appetizers chosen by our President, and plans are to invite several other Rotary Clubs to join us. RSVPs will be required, and Club members may do so by calling or texting Barbara at (323) 365-0938.
Finance Panel – A year in Review
The first annual finance panel was on Dec 14th, 1989. At that time, the Dow was trading at 2,700 points, prime was 10.5%. Today the Dow was trading over 44,000 points and prime is at 7.5%.
This past year in 2024 the Dow soared up by 12.5%.
The S&P 500 recorded numerous record closes. Inflation dropped. It was the best consecutive year-to-year since 1997 and 1998. Bitcoin more than doubled, hitting over $100,000 for the first time. Interest rates may remain higher. The yield on the 10-year Treasury Note went from 3.86% to 4.57% at year end. Top tech companies known as “The Magnificent Seven” accounted for more than 50% of stock increases. NVIDIA alone was 20% of that. Stocks rallied after the election on hopes for tax cuts and looser regulations. But the markets may have a bumpy ride in 2025.
- The annualized Dow average increase over six years was 11.3%.
- The S&P 500 average increase over six years was 15.3%.
- The NASDAQ average increase was 19.5%.
- In January the Dow went up an additional 4%.
- In January the NASDAQ was up1.6%.
- One-year Treasury in January was down 17 basis points.
- In 2024 the yield curve was no longer inverted, signaling a recession is unlikely.
- Gold closed at over $2,300 per ounce.
The big questions include if the economy experience a slow-down, will the housing market suffer due to continued high mortgage rates, will the Trump 2017 tax cuts be extended, will the wars in the Ukraine and Gaza be resolved, will life return to normal, and is there a God?
Revisiting Past Forecasts from 2024
The Club predicted the Dow would end the year at an increase of 12%. The actual increase was 13%.
The Nasdaq ended up 28.6%. The Club had predicted 15% increase, and the advisors forecasted 10%
The One-year Treasury was down 63 basis points. The Club predicted a reduction of 25 bpts, and the advisors predicted a reduction of 93 basis points.
The 10-year Treasury ended the year up by 71 basis points. The Club predicted it would be down by 75 basis points, and the advisors predicted it would end up 10 basis points.
In January 2024, the advisors selected a portfolio including aerospace firms and John Deere. If you made an investment in their predictions, your portfolio would show a 12.2% gain.
Club Forecasting for 2025
For 2025 – a poll taken of WVRC Club members the Dow will climb 10% higher. The Club says the S&P will also climb up 10%. And the Nasdaq will rise by 12.5%.
One-year Treasury – The Club members forecasts rates stay the same.
10-year Treasury – The Club forecasts the 10-year Treasury will end the year at 4.55%, which is basically the same as the start of the year.
Panel Forecasting for 2025
Our four esteemed Club panel members (who shall remain nameless) offered their forecasts and review for the coming year. Each one is highly respected in their area of finance.
Panel Member One – he forecasts two separate 25 percent reductions in the federal funds rate this year. For 10-year Treasuries, he forecasts they will be down to 4.25%. He believes the Dow will be up by 15%, the S&P up by 12% and the NASDAQ up by a whopping 32% by the end of the year. Trump is going to extend income tax cuts from 2017 and eliminate taxes on tips and social security, as part of his promise during the election. All of that is good for the financial community and finance industry. He also recommends Goldman Sachs (GS) as a stock pick.
Panel Member Two – She likes Brian Wesbury from First Trust as her favorite economist and refers us over to a Jan 6th article. He takes forecasts with a grain of salt. Her predictions for 2025 include a Dow ending at 50,250, an increase of 12.2% But would not be surprised at a temporary dip of 15% during the year. The S&P ending at 6,700 up about 12%, and the NASDAQ up at end of year by 14% at 22,450. One-year Treasury closing at 3.75%, and the 10-year Treasury closing at 4.25%. She also suggested a possible market correction of 10%. Stocks that will benefit because of Trump are in the energy sector, particularly fossil fuels like Exxon (XOM) or Chevron (CVX), but she recommends Fidelity Select Energy Portfolio (FSENX). Dividends are at 1.4%. It has done very well over the past 12 months with an increase of 11.8% and is expected to go higher this year.
Panel Member Three - He believes there is a good possibility that there will only be one rate reduction this year. Plus, lots of pressure from the White House. Look out below. He sees this year is going to be a tough one. The big question is on tariffs. He suggests getting invested and staying invested. “One thing I know is that I don’t know what is going to happen”. One-year Treasury 4.50%, 10-year Treasury closing at 4.75%. The Dow is up 2%, the S&P remains even, and the NASDAQ will be down 5%. His equity recommendation is based on Trump and the stock energy sector; stock EOG Resources (EOG) currently trading at $128/ share. Now only 10x earnings.
Panel Member Four - per ChatGPT recommends Trump Media (DJT) and likes the energy sector but picked service companies serving the energy companies. He picked the New York Times (NYT) because it covers Trump’s activities, which can only result this year in increased readership. And he chose Union Pacific (UNP) and Qualcomm (QCOM) as stocks to look at. One-year Treasury will be down 1/4 pt, the S&P 500 up 12%, the NASDAQ up 17.5% and Dow up 10%. The 10-year Treasury went down by 1/4 pt as well. “Buy low and sell high”. (music to my ears)
President Ben asked our Club about extending meeting, since there was so much interest, and it continues to be one of our most popular meetings each year.
Phil Gabriel had a question on goods such as building materials needed to rebuild the burnt-out homes. There was a suggestion to look at Lowe’s or Ace Hardware or Home Depot (HD)
PPx2 Chris “the man” Gaynor questioned how you advise in the current circumstances, with so much uncertainty. Someone suggested talking to lots of people and always analyzing with six-year averages in mind. Stay invested.
Grant Giddens (special guest) had a question about who is making the money in energy with more products on the market, which lowers prices.
Another question came up about the prospect of a U.S. Sovereign Wealth Fund – the speakers responded they were not sure about it yet. It’s too early to tell.
Bill Roen announced that the UCLA women’s baseball team is number one now. Bill has vouchers for certain games for anyone interested.
PP Steve Scherer encouraged everyone to consider a career in investment counseling.
Our meeting ended and we all thanked PP Steve Scherer and our panel members for an enlightened afternoon, sharing their thoughts about the largest economy in the history of the world.
Respectfully submitted,
PP Mark Rogo, a huge fan of PP X2 Diane Good and
PP Tom Barron
PS: Congratulations to our very own PP Marsha Hunt who has recently been elected as President of the Rotary Ukraine/USA Inter Country Committee!! Look for future updates on how Rotary Ukraine/USA are working together towards PEACE.
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