WEEKLY MARKET RECAP WEEK ENDING FEBRUARY 28, 2025

Given the outsized weighting in the S&P 500 of Technology (32.68%), Consumer Discretionary (10.68%) and Communication Services (9.49%), it would have been nearly impossible for the index to have made gains this past week as all three traded lower.? However, of the other eight sectors, only Utilities lost ground.? In fact, of the companies that comprise the S&P 500, the number of stocks that advanced outpaced those that declined, this even though the broad market shed a little more than one percent.? Given the nearly overwhelming noise coming out of Washington, we continue to believe that the upside is limited until the dust settles a bit.? However, we also think that stocks should be supported from any meaningful downturn because of strong earnings.? Bottom line, the market may continue to churn near these levels.

• Of the four sectors that fell, this week, three (Technology, Consumer Discretionary, Communication Services) were market leaders during 2024, perhaps continuing to signal a broadening out of leadership this year.? Moreover, of the companies that comprise the so-called Magnificent 7 (Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla), only Meta Platforms has risen thus far in 2025.?

• Sometimes it’s never enough as despite posting year/year revenue growth of 78% and earnings growth north of 70%, shares of Nvidia (NVDA) sold off indicating to us that shares of this company as well as the other six that comprise the “Mag 7” may be due for a breather.? That said, we will be looking for opportunities in all of these names should the sell-off worsen appreciably.

• The media is not doing investors any favors as they tend to downplay the benefits of long-term investing, which is somewhat predictable in order to focus on the short-term, which is random, at best.? The result is a heightened level of anxiety for the retail investor and the propensity to make mistakes.

• When Warren Buffett talks, we listen.? Berkshire Hathaway (BRKA/BRKB), the company which Buffett is the Chief Executive Officer (CEO) paid a record $26.8 billion in taxes in 2024.? Buffett, within his letter thanked “Uncle Sam” and went on to add that “someday your nieces and nephews at Berkshire hope to send you even larger payment than we did in 2024.? Spend it wisely.? Take care of the many who, for no fault of their own, get the short straws in life.? They deserve better.? And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.”

• To Our Clients.? After two strong years in for the equity markets, many Non-Qualified Accounts should expect realized capital gains during 2025 when filing their taxes during the spring of 2026 as we continue to trim some winners.? There is a difference between the correct course of action as compared to that which perhaps you wish you had taken with the benefit of hindsight.? Please note that we will attempt to minimize these gains wherever possible.? Any questions, please contact Fagan Associates.

?It’s The Economy…”

• The Bureau of Economic Analysis reported that Personal Income rose 0.9% during January (4.6% y/y), after rising 0.4% in December. Disposable Personal Income(personal income less taxes) rose 0.9% (4.4% y/y), after rising 0.4% during December. Personal Spending(PCE), representingapproximately 70% of economic activity rose 0.2% during January (5.6% y/y) after rising 0.8% during December. The consensus was for the PCE to rise 0.2%. Personal Savings rose to an annualized rate of 4.6% during January from 3.5% during December. The PCE Chain Price Index rose 0.3% in January (2.5% y/y) following a rise of 0.3% during December.? Excluding food and energy, the Core PCE rose 0.3% during January (2.6% y/y), after rising 0.2% during December. (Source, Bureau of Economic Analysis)

• Fourth Quarter Gross Domestic Product (third estimate), as reported by the Commerce Department, a tally of the output of all goods and services in the United States, rose at an unrevised annualized rate of 2.3%, down from 3.1% during Q3 and as compared to 2.5% y/y.? Government Spending rose at an annualized rate of 2.9%, revised up from a previous estimate of 2.5%, down from 5.1% during Q3 and as compared to 3.2% y/y. (Source, U.S. Bureau of Economic Analysis)

• The Census Bureau reported that Sales of New Homesfell 77,000 during January to a Seasonally Adjusted Annualized Rate (SAAR) of 657,000 from 734,000 during December (-1.1% y/y).? Sales of New Homes have fallen by 36.28% from their peak of 1.031 million in October 2020 and 48.63% from the peak in July 2005 of 1,279,000 units.? According to Haver Analytics, “the median sales price of a new homeincreased 7.5% (3.7% y/y) to $446,300 in January after a 4.7% rise to $415,000 in December.? It was just shy of the $460,300 record in October 2022.? The average sales price of a new homeedged 0.1% higher (-3.4% y/y) to $510,000 in January following a 6.5% December increase.? The average price was 5.8% below a high of $541,200 in July 2022.? The number of unsold new homes on the market rose 1.4% (7.4% y/y) to 495,000 in January, after a 0.2% December increase.? The latest was 6.2% above a low of 466,000 in October 2022.? The seasonally adjusted months’ supply of new homes for salerose to 9.0 months in January after falling to 8.0 months in December.”? (Source, U.S. Census Bureau)

• The Conference Board’s Consumer Confidence Index fell to 98.3 (-6.2% y/y) during February from 105.3 in January.? The present situation index fell to 136.5 in February from 139.9 (-7.5% y/y) while the expectations component fell to 72.9 during February from 82.3 during January (-4.5% y/y).

• Mortgage Rates according to the Federal Home Loan Mortgage Corporation (FreddieMac), “mortgage rates decreased to their lowest level in two months.? The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home.”(Source, Federal Home Loan Mortgage Corporation

Upcoming Economic Reports scheduled to be released this week include the following; on Monday, January Construction Spending and the ISM Manufacturing Sector Purchasing Managers Index; on Wednesday, January Factory Orders and the ISM Services Sector Purchasing Managers Index; on Thursday, the Weekly Report of Initial Claims for Unemployment Benefits along with the January Balance of Trade; and, on Friday, February NonFarm Payrolls; February Unemployment and January Consumer Credit. ? Q4-2024 Earnings Season Has Begin To Wind Down.? Nonetheless, several companies of note are scheduled to report, to include –CrowdStrike (CRWD), AutoZone (AZO), Ross Stores (ROST), Best Buy (BBY), Zscaler (ZS), Veeva Systems (VEEV), JD.com (JD), Marvell Technology (MRVL), MongoDB (MDB), Broadcom (AVGO), Costco Wholesale (COST), Kroger (KR).

General Disclosure:

“This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.

Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions.?Past performance results are not indicative of future results.”