BY PETE BARDUNIAS

In some of the social circles I inhabit, “DEI” can be considered a bad word. This is unfortunate. If we can get past the political machinations, we might well find that 2025 is the year for a big DEI breakthrough in Saratoga County and the greater Capital Region. One of the reasons:   Neurodiversity. A big word which means “individual differences in brain functioning regarded as normal variations within the human population,” according to Webster.

Consider these statistics. One out of every 36 children is estimated to be somewhere on the autism spectrum. One out of every 28 children has an incarcerated parent. One out of every 20 suffer from Fetal Alcohol Spectrum Disorder (FASD), a category which isn’t even considered an “official” disorder, and is totally preventable.  One out of every four women (and one out of seven men) will endure some form of domestic violence in their lifetime, and 22 veterans commit suicide every day. 

Better understanding of how both these biological and societal factors contribute to the emotional stability and mental health across our population can be beneficial. Just think of the statistics mentioned above, and what they might do to inhibit people from reaching their full workplace potential. Think of the impact it can have, if we could resolve them to any great degree. It would be the single biggest workforce development initiative the Capital Region has ever seen. A sensitivity to neurodiversity can help move us in the right direction. It is exciting to see some of this already in action.

 For example, Assemblywoman Mary Beth Walsh promotes ThinkDIFFERENTLY, launched by then-Dutchess County Executive Marc Molinaro in 2015, which advocates consideration for people with sensory, hearing, mobility or visual issues. The Saratoga County Fair turns down the noise for a few hours on one of its days, to provide a more welcoming environment for sensory-impacted guests. At St. Christopher Fitness in the Clifton Park Center Mall, owners Jomilson and Theresa Alvarez provide a smaller space, different, often subdued, lighting, elements of mood, and sensory stimulation to help people with autism or other challenges get their exercise regimen in a comfortable setting.  People who wouldn’t otherwise get to exercise have the chance to do it in a way that suits them.

by Mark Shaw

When it comes to technology the outlook for 2025 is split between compliance and AI utilization. What do we mean by this? We mean if you are in a HIPPA  (Medical Records) medical records or in any line of contracting for the federal government (CMMC) you will be impacted by some new regulations on your business.  You may not even be aware of them. 

For example, passed in the final hours of 2024, companies that fall under the HIPPA guidelines are now required to do two more things to protect their patient data. One they must have their computer systems scanned for vulnerabilities every quarter. This means four times a year you are expected to have a complete scan of your system to understand the current state of your IT health. Secondly you are expected to do annual penetration testing. This is where an outside firm tries to access your systems and data without being given permission. Once completed this report is shared with you and your technology provider to give a list of recommendations on how to remediate any shortcomings.

Interestingly HIPPA was created in 1995 and to date there has been very little “teeth” in the law and many practices are simply just saying “It is not for me, I’m too small, too specialized, not important enough, don’t have enough data to report on” We see this quite regularly.  Medical firms are focused on their main jobs and not the technology side. 

This is expected to no longer be the case. The new guidelines are letting regulators to get tougher on everyone. If you are not considering this and you have a medical practice, you should consider talking to your technology provider today to ensure you meet the requirements.

If you are in any industry touched by federal government, from a direct contractor for services, manufacturing for them or even being janitorial services with clients in the government space, you are being forced to adopt stronger guidelines and comply with the new CMMC rules.  

By Steven Luttman

U.S. homeowners are sitting on approximately $35 trillion dollars of home equity. While rising values have been great for some, simultaneous higher prices and mortgage rates continue to leave many out in the proverbial cold. Should relief come, many expect it would not be in the form of falling prices, but instead in lower borrowing costs. We’ve seen the Federal Reserve lower rates on the short end of the curve with little/no impact to housing, so where else can we look? Spreads.   

When we say ”spread”, we’re not referring to your favorite sports team catching six points determined by Las Vegas against a rival. Instead, it’s the difference between two benchmark rates. From a mortgage loan perspective, the significance of the 10-year U.S. Treasury yield can’t be overstated. On the surface this may not make a lot of sense. According to online lender Homebuyer.com roughly 9 out of 10 applications in 2022 were for a fixed rate mortgage spanning 30 years. With that in mind, why not focus on a 30-year instrument for a true apples to apples comparison? When taking into account refinances along with property sales, the average mortgage lifespan is actually only 8 years long. Turns out your “forever home” is rarely ever that. Keep this in mind when deciding if buying down your mortgage rate is in your best interest.  

Mortgage rates trade above their Treasury counterpart due to several factors. These include servicing costs, secondary market appetite and duration risk. Equally important however, is default. While unfortunate, the chances of a household not making payments (1.73% of mortgages were delinquent as of Q3 2024 according to the Federal Reserve System) does exist. Compare this with U.S. government debt, which is viewed globally as “risk free”. The belief in repayment is in large part why there is a discrepancy.

While a strong correlation in movements between the two does exist, differences do occasionally occur. Economic conditions play a role in the discrepancy. As explained by Grey Gordon, Senior Economist with the Federal Reserve Bank of Richmond in his 2023 research paper “Mortgage Spreads and the Yield Curve”, spreads increase during times of financial uncertainty. The thesis is money flows into long dated government bonds for security, inverting the yield curve. Refinance activity from owners chasing a lower rate shortens expected term duration, causing mortgage prices to become more sensitive to short-term Treasury rates. Ultimately this leads to higher mortgage rates relative to the 10-year Treasury yield and creates wider mortgage spreads. A very complicated way of saying that evidence shows forces push up mortgage rates during times of economic slowdown. 

By Michael Brodt

As I write this final State of the Economy and Markets for 2024, we are just days away from the winter solstice. However, the cooling off of the broader U.S. stock markets has preempted the official start of winter. The Dow Jones Industrial Average recently fell for the 10th straight day—its longest losing streak in 50 years—and on Wednesday, December 18, stocks suffered their worst trading day since August. Wednesday’s drop came in response to the Federal Reserve forecasting more stubborn inflationary pressures and fewer rate cuts in 2025 than had previously been discussed. Over these several days, the Dow dropped 6%, the S&P 500 3.5%, and the Nasdaq 1.8%.

Despite this recent weakness, the broader markets appear to be well on their way to wrapping up a second-consecutive banner year. The three previously mentioned stock indices are each still near their all-time highs reached in early December. With the Nasdaq at nearly 33% for the year—followed by the S&P 500 at 26% and the Dow at 14%—stocks have surpassed the majority of 2024 forecasts. A healthy rally taking place today, December 20, is recouping much of the decline realized on December 18.

A positive takeaway from the Federal Reserve meeting is its projection for stronger economic growth and lower unemployment for 2025 than previously thought. This, followed by real gross domestic product (GDP) growing at an annual rate of 3.1% compared to the previous estimate of 2.8%, indicates that the U.S. economy is in good shape, with no recession in sight as we head into 2025. A strong U.S. economy and increasing corporate earnings could very well set the stage for a continuation of this current bull market, which began in October 2022.

Two impediments to a third-consecutive year of gains for the stock markets would be (a) higher-than-expected inflation, and/or (b) weakness in the narrow group of stocks that continues to fuel a large portion of the market’s gains. While 2024 saw increased participation compared to 2023, artificial intelligence (AI) and the stocks that have come to be known as the Magnificent 7 (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla) led the charge once again.