Rates Drop Further – Fixed Income Overview

Fed Chair Jerome Powell communicated that the reduction in the Fed Funds rate was not going to be a series of reductions, but rather a wait and see approach contingent on economic progress over the next few months. The Fed’s reduction to the Fed Funds rate was the first since 2008 when the financial crisis had begun. The Fed Funds …

Low Rates & Improved Earnings Send Stocks To Highs In July – Equity Overview

While stocks were driven by a Fed rate cut expectation in July, earnings also became a focal point as economic weakness abroad and a strong dollar have created a challenge for earnings of U.S. multinational firms. U.S. corporate earnings have proven to be more resilient than expected as earnings beat expectations for a swath of companies in the equity indices. …

Low Rates & Improved Earnings Send Stocks To Highs In July – Equity Overview

While stocks were driven by a Fed rate cut expectation in July, earnings also became a focal point as economic weakness abroad and a strong dollar have created a challenge for earnings of U.S. multinational firms. U.S. corporate earnings have proven to be more resilient than expected as earnings beat expectations for a swath of companies in the equity indices. …

Debt Limit Gets Put On Suspension – Fiscal Policy Overview

Formally known as the statutory debt limit, the United States debt ceiling or debt limit is a legislative restriction on the amount of national debt that can be issued by the Treasury. The debt limit has been raised 79 times since its creation in 1917, with 17 of these increases occurring over the past 20 years. The debt ceiling may …

How Tart Cherries Became The Latest Trade Battle – Trade Policy Update

Apart from high-tech components and mass produced gadgets from China, tart cherries imported from Turkey are encroaching on U.S. cherry farmers in Michigan and Washington. The U.S. cherry industry petitioned the U.S. Commerce Department to impose tariffs on the import of tart cherries from Turkey. The complaint claims that cherry exporters are being subsidized by the Turkish government to dump …

Social Security Scams

An increase in fraudulent calls from people claiming to be from the Social Security Administration have taken different forms with the intent to obtain sensitive information. Individuals are receiving phone calls displaying the Social Security Administration’s (SSA)  phone number on caller ID. The callers are reportedly attempting to obtain personal information, including Social Security numbers. If you receive this type …

Mortgage Rates Drop But Homes Are Still Expensive – Housing Market Review

Falling interest rates have prompted an increase in mortgage activity as the cost to borrow for home buyers has become less expensive. Mortgage rates fell in late July to the lowest levels since late 2016, with the average on a 30-year fixed rate conforming loan falling to 3.75%, down from 4.94% in November 2018. The challenge for many homebuyers has …

Some States Growing Faster Than Rest of the Country – Domestic Economy

Economic growth across the country varies by several factors, including demographics, education, weather, and industry. The first quarter of 2019 saw an increase in GDP of 3.2% nationwide, yet certain states realized a much stronger growth than others.  West Virginia topped every other state in the first quarter, with a 5.2% growth rate. Texas, New Mexico and Utah also saw …

Macro Economic Overview – July 2019

Stocks and bonds rose in June as lower rates drove equities higher and international diplomatic tensions elevated bond prices. Indications by the Fed that there may be a rate cut later in the year helped sustain stock prices near record levels. The G20 met in Osaka, Japan, at the end of June where trade tensions between the U.S. and China …

What Expenses Seniors Have After Retirement – Consumer Demographics

Demographics play a significant role in how much we spend and how we spend it.  Spending is primarily dictated by age where different needs and life essentials change and evolve as consumers grow older. The challenge for many retirees now is the fact that we are all living longer, with U.S. life expectancy of 78.7 years as of 2018. As …

Good News, You May Not Need As Much For Retirement – Financial Planning

As retirement becomes more of a reality for more Americans, the anticipated expenses associated with retiring can actually be less than when still working. Lifestyle changes and adjustments automatically occur once we retire. Such changes include not filling up at the corner gas station twice a week to get into the office, or perhaps not spending hundreds of dollars each …

IRS Scams – Consumer Awareness

Identity theft and stolen funds are becoming a growing risk as thieves have devised clever methods of masking IRS communications. Various government entities have identified some of the most prevalent scams. Refund Scam Fraudulent emails, appearing to come from the IRS, notify you that you are eligible for a tax refund, but need to provide sensitive bank details in order …

When It’s Time To Stop Driving – Retirement Facts

As senior drivers end up driving well into their 70s, 80s, and even 90s, the need for safety awareness and heighten caution is critical. The Centers for Disease Control and Prevention found that all adults age differently, with some losing essential motor skills sooner than others. Losing one’s privilege to drive can affect an adult’s sense of dignity, including a …

Stocks Rebound In June – Equity Overview

Stocks and bonds registered the first half of the year with formidable gains propelled by an expected rate cut by the Fed later in the year. It was the best first half of the year since 1997 for equities, with the Dow Jones Industrial Index, S&P 500 Index, and the Nasdaq nearing new highs. Equities were also driven higher in …

The Country’s Busiest Airports – Travel & Leisure

The summer months tend to see the heaviest travel of airline passengers across the country, with summer traditionally the most profitable season for airlines when flights are full due to increased demand. It is expected that a record 257 million Americans will travel by plane this summer. As both business and leisure travel have been increasing domestically and internationally, U.S. …

Yields Drop Further In June – Fixed Income Update

The 10-year Treasury bond yield dropped below 2% for the first time since November 2016. The 10-year Treasury continues to trade at a lower yield than the 3-month Treasury bill, signaling an inversion, which is when shorter term maturity bonds yield more than longer term bonds. Rates concurrently dropped in Europe, India and Australia as central banks maintained stimulus efforts …

What The U.S. Imports From Mexico – Trade Overview

The administration has proposed tariffs up to 25% on imported products from Mexico in order to stem illegal immigration from the country. Some argue that imposing such a tariff would make certain imported products more expensive for American consumers. The U.S. imported $93 billion worth of vehicles from Mexico in 2018, with auto parts accounting for the single largest type …

Here’s What The U.S. Buys The Most Of From China – Trade Overview

In the past twenty-plus years, China has evolved from a heavy equipment machinery exporter to a prominent leader in technology product exports. Large international conglomerates have established an enormous manufacturing presence throughout China, utilizing its cheap labor and quick turnaround times. China’s manufacturing plants are among the most modern in the world, producing large capacities almost entirely for export. As …

Equities Give Up Early Gains – Equity Market Update

In stark contrast to the strong performance during the first four months of 2019, U.S. equities faltered in May as continued trade disputes hindered economic growth expectations. All sectors of the S&P 500 Index fell in May, with the exception of Real Estate. Technology and financial stocks experienced the brunt of the pullback in May. May was the worst month …

Rates Drop Rapidly Amid Inverted Yield Curve – Fixed Income Update

Markets tend to look at the yield curve in order to find clues as to what the expectations are about future economic growth and inflation. The yield curve is essentially the current yield on government Treasury bonds from 3-month maturities to 30-year maturities. At the end of May, the 1, 2, 3, 6 month and 1-year notes all yielded more …

Changes Proposed For 401k Plans & IRAs – Retirement Planning

This past month the House of Representatives passed the SECURE Act, which will introduce various changes to retirement plans including IRAs and 401k plans. The act was approved by the House in May and is expected to be approved by the Senate and become law relatively soon. One of the most significant revisions to IRAs introduced by the legislation is …

Cost of Raising Kids – Financial Planning

Since 1960, the U.S. Department of Agriculture (USDA) has provided estimates of expenditures related to raising a child from birth to age 17. Related expenses range from food and housing to education and medical care. The USDA closely follows and identifies the various incomes for families, as well as the number of children in families. What it has determined over …

Breaking Down Trash – Environmental Fact

As an abundance of trash is generated every day, more of an effort is being made to collect and recycle as much trash as possible. Several nations worldwide have had growing success in collecting and recycling their trash over the past few years. Switzerland currently recycles over 50% of its trash with Austria, Germany, Netherlands and Norway recycling over 40% …

USPS Considers 5 Day Delivery Due To Low First Class Volume – Government

For years, Americans have relied on the United States Postal Service (USPS) to deliver mail six days a week, Monday through Saturday. Due to financial constraints because of a continued decline in mail volume, Saturday deliveries may be eliminated by the USPS in order to reduce costs. The USPS remains an integral part of the economy and the country’s infrastructure …

Unemployment Falls to 50 year low at 3.6% – Labor Market Update

A tight labor market with a voracious demand for skilled workers has brought the unemployment rate down to a 50 year low. The 3.6% rate is the lowest on record since 1969, when U.S. companies were eagerly hiring workers and paying higher wages. Yet this time it has been different as noted by the Department of Labor, whereas higher wages …

Deciding When To Take Social Security – Retirement Planning – June 2019

Deciding when to take Social Security benefits is one of the most important decisions one will make for retirement. You may either base the decision strictly on monetary benefits, or your decision may be more personally based. The important question is when to start taking benefits, at age 62 or postponing benefits until age 66, or even later. The answer …

How New Rules Benefit 529 College Savings Plans

The Tax Cuts and Jobs Act includes a provision to now allow 529 Plans to be used for private elementary and high school expenses, rather than just college related expenses. The new rules are a treat for both parents and grandparents looking for a better way to pay for private educational costs. Prior to the Tax Cuts and Jobs Act, …

529 College Savings Plans As An Estate Tool

Named after the IRS Code it falls under, Section 529 plans have amassed over $282 billion in assets since their inception in 1997. Their popularity soared over the years as parents and grandparents realized their favorable tax benefits while also saving for college expenses. Section 529 plans were initially intended to provide parents of young children the ability to save …

Rates Remain Stable – Fixed Income Update

Rates stabilized in April as government and corporate sectors saw a gradual increase in yields. Analysts and economists view a slight increase in rates following a sharp decrease in yields, as a form of stabilization in the fixed income markets. The Fed consoled markets with a hold-and-wait stance as it announced no change in short-term rates. Deflation and stagnate growth …

Technology & Financials Lead In April – Equity Update

Domestic and foreign equity indices rose in April as rates stabilized and earnings for most companies were as expected or better. Some analysts were perplexed as the leading sectors in April were information technologies and financials, contributing over half of the S&P 500 Index 4.05% return for April. Earnings and optimism surrounding the trade discussions helped elevate shares across all …

45% of Americans Pay No Federal Income Tax – Fiscal Policy

Disparity of income has been a preponderate subject for politicians and activist groups for sometime, yet in the end, it’s those that earn the higher incomes that pay for the majority of taxes. An estimated 76.4 million Americans, identified as households, paid no federal income tax for tax 2018. The non-partisan, non-profit tax group known as The Tax Policy Center …

How To Check On Your Refund Status – Tax Planning

According to the IRS, as of April 19th, the agency had issued over 95 million tax refunds worth more than $260 billion. The average refund so far through mid-April is $2,863, slightly less than the average refund from last year. The majority of taxpayers getting a refund are doing so through direct deposit, which accounts for almost 88% of refunds …

Oil & Retirees Drive Population Growth – Demographics

Recently released Census data revealed that the fastest growing cities in terms of population growth have been driven by the oil industry and retirees. The Census report documented population growth from July 2017 to July 2018, identifying ten of the fastest growing cities nationwide. Half of the fastest growing cities are being driven by retirees migrating in and the other …

Social Security Falls Short On Projections – Retirement Planning

A U.S. Government report compiled and released by the Government Accountability Office (GAO) found that 48 percent of individuals 55 and older had no retirement savings whatsoever. Statistics like this are where the concept of Social Security originated from. The establishment of Social Security occurred on August 14, 1935, when President Roosevelt signed the Social Security Act into law. Since …

Macro Economic Overview – May 2019

Macro Overview – May 2019 Tranquility that fell upon markets as volatility receded in April was interrupted by a return of uncertainty surrounding trade negotiations between China and the United States. Incomplete trade discussions with China are still a threat to global markets as an agreement regarding tariffs and intellectual property rights has yet to be finalized. U.S. government revenues …

EU Data Reveals European Slow Down – European Region Update

Industrial production among the 28 countries comprising the European Union (EU) has been steadily falling over the past year. Factors affecting the slowdown include the persistent Brexit dilemma, slowing demand from China, and weakening consumer demand throughout the EU. Of the 28 member countries, Ireland, Portugal and Germany were among the countries with the largest decreases in industrial production. Smaller …

What To Keep & What To Toss – Tax & Finance

As we make our way through the piles and files of receipts and statements left over from tax time, disposing of some of these obstacles is a thought. It is always suggested to carefully shred documents containing any critically sensitive information. The idea is to toss out what you don’t need anymore, yet keep what you might need for taxes …

What Britain Leaving The EU Means – Brexit Overview

Turbulent and politically charged challenges between the British government and Parliament have resulted in numerous failures to finally execute Britain’s departure from the EU, known as Brexit. The significance of Britain exiting the EU may eventually be substantial as other countries may decide to cast similar votes whether or not to leave the EU. Several of the existing members are …

How Student Debt Affects Credit Scores – College Planning

As the cost of education has risen over the years, so has the reliance on student debt in order to help finance such expenses. The concern is that more and more students are graduating from college with large amounts of student debt and with no job intact. The Fair Credit Reporting Act (FCRA) recognizes student debt as any other type …

Workforce Getting Older – Labor Demographics

Demographics drive the domestic labor force, propelled by both young and unskilled workers to older more seasoned individuals. For decades, the baby boom generation commanded the nation’s workforce, representing the single largest age group to hold jobs across all industries and sectors. As those same workers have aged, a younger generation has assumed some of the gaps left by retiring …

Why We’re Using More Energy – Domestic Energy Market

Contrary to what we hear about conservative practices with energy consumption, energy use in American homes has actually increased over the past 30 years. Data compiled by the U.S. Energy Department identified various reasons as to why we’re using more energy, primarily electricity. Data from the Energy Department revealed a sharp rise in electricity usage for households in 2018, elevating …

Fertility Rates Around The World – International Demographics

Prosperity and growth of a country is contingent on the health and expansion of its population. A measure of growth which eventually leads to a population demanding food, clothing, medicine, and other necessary goods is the fertility rate. Most of the highest fertility rates in the world are found in emerging regions of Africa and the Middle East, where mothers …

Worldwide Debt On The Rise – International Finance

Corporate debt worldwide has become a growing concern among central bankers and international finance managers. The extended period of ultra low interest rates following the monetary stimulus programs of central banks worldwide allowed companies from all over the globe to issue debt very inexpensively. Now with monetary policy on reversal from a decade of stimulus, the cost of debt will …

Macro Overview – April 2019

A change in the Federal Reserve’s stance on the direction of interest rates helped buoy equity and bond prices higher in March, allowing U.S. equity indices to post the strongest first quarter in nearly ten years. The Federal Reserve scaled back its growth expectations for the U.S. economy and announced that it would hold rates steady with no additional rate …

Europe Buys More From China Than It Does From The U.S. – International Trade

Europe Buys More From China Than It Does From The U.S. – International Trade Over the years, Chinese exports have inundated not only the United States, but the European Union (EU) as well. Similar to the trade imbalances with the U.S., the EU also has trade imbalances with China. China has become a significant influence on the EU and its …

2018 Saw An Increase In Striking Workers – Labor Market Overview

2018 Saw An Increase In Striking Workers – Labor Market Overview As occupations and trades evolved over the decades in the United States, so have the workers that have been on strike. The Bureau of Labor Statistics monitors and tracks the number of idle workers on strike nationwide, known as work stoppages. For over 200 years, strikes in the United …

Consumers Opt For Auto Loans Rather Than Mortgages – Consumer Credit

Consumers Opt For Auto Loans Rather Than Mortgages – Consumer Credit Data released by the Federal Reserve Bank of New York found that Americans have been borrowing more for automobiles and less for homes. While new mortgages fell to their lowest levels since 2014, car loans have been steadily increasing. A weakening housing sector along with tepid wage growth has …

Global Uncertainty Drives Demand For U.S. Treasuries – Fiscal Policy

Global Uncertainty Drives Demand For U.S. Treasuries – Fiscal Policy – March 2019 The prospect of an increasing deficit has led to an increase in debt issuance by the Treasury due to an expected shortfall of tax revenue. The Treasury issues debt in order to fund the ongoing operations of the U.S. government. Some of the recent tax measures passed …

Less Cheese Exports Affect U.S. Dairies – Agricultural Trade

Less Cheese Exports Affects U.S. Dairies – Agricultural Trade U.S. dairies are among the largest producers of cheese in the world, producing from cheddar to mozzarella. The global cheese market is currently made up of over 21 million tons of cheese production coming from countries all over the world. Cheese comes in various forms, as large uncut blocks to small …

OPEC Weakens Further – Oil Industry Focus

OPEC Weakens Further – Oil Industry Focus – March 2019 The once almighty oil cartel known as OPEC (Organization of the Petroleum Exporting Countries), has weaken to the point that its members have lost confidence in the organization’s ability to manage and control oil prices as it has done for decades. Recent political events for certain OPEC members have further …

How A Government Shutdown May Affect The Economy – Fiscal Policy

The partial shutdown of the federal government came to a temporary end on January 25th, 35 days after it had begun on December 22, 2018. The administration agreed to reopen federal offices and agencies for three weeks, while negotiations continue with House and Senate leaders in Washington. The restoration of normal operations are scheduled until February 15th, when the deadline …

China Trade Deficit Reaches Largest Ever In 2018

China’s trade deficit with the U.S. rose to the largest difference ever in the last quarter of 2018 as ongoing trade disputes continue. In October 2018 alone, U.S. exports to China were valued at $9.13 billion versus imports from China were valued at $52.23 billion, resulting in a $43 billion trade deficit for the month. Over the past twenty-five years, …

Upcoming Debt Ceiling Issue – Fiscal Policy

A recurring debate is once again about to emerge as a political challenge surrounding government debt continues. On February 9, 2018, the President signed a bill suspending the debt ceiling until March 1, 2019. On that date, the revised debt limit will be whatever total federal debt currently is. The debt ceiling on February 9, 2018 was $20.456 trillion. Formally …

Equities Have Best January Since 1989 – Equity Market Update

Equity markets rebounded in January erasing volatility residue from the end of 2018. Earnings released during the month were mixed but yielded optimism for various sectors and industries. January results posted the best beginning of any year since 1989, a dramatic reversal from what was the worst December since 1931. Major stock indices experienced among the most dramatic daily point …

Rates Head Lower While Fed Holds Steady – Fixed Income Update

Overall bond prices rose in January as the prospect of the Fed raising rates in 2019 considerably lessened. The Fed announced that it would refrain from its previous strategy of increasing short-term rates as well as hold off on shrinking its balance sheet. Both monetary tactics are expected to keep interest rates at current levels, without any additional increases just …

IRS Waives Penalty For Not Withholding Enough – Tax Planning

The Tax Cuts and Jobs Act which was enacted in December 2017, brought about a host of changes for taxpayers. Among the changes was the amount of withholdings as calculated by revised tax tables. The IRS announced that it is waiving the estimated tax penalty for various taxpayers whose 2018 federal income withholding and estimated tax payments fell short of …

Emerging Markets Drive Global Growth – International Review

Each year, the World Bank conducts an extensive survey of developed and emerging market countries in order to better determine where global growth might be heading. In its most recent study released in January, the World Bank identified various factors that led to less growth estimates across global economies. The World Bank identified softened international commerce and continued trade tensions …

Macro Economic Overview – February 2019

A resilient U.S. economy drove equity markets to the best January in 30 years, propelling stock indices to new year gains which had not been seen since January 1989. Job and wage growth skirted the government shutdown as the number of employed increased in January along with rising wages. The unemployment rate ticked up to 4.0% in January due to …

Which States Are Seeing The Most Population Growth – Demographics – January 2019

Various factors have made some states more attractive than others, influencing the migration of citizens from state to state. Weather, taxes, jobs and housing affordability are among the primary factors incentivizing people to move from one state to another. The U.S. Census Bureau tracks population growth and declines for the 50 states, which individual states carefully monitor in order to …

Tax Rule Changes For 2019 – Tax Planning – January 2019

Tax Rule Changes For 2019 – Tax Planning Various changes are effective for the 2019 tax year beginning January 1, 2019. The changes affect most every tax payer both as an employee and self employed business owners. A provision in the tax code known as indexing will affect 2019 Tax Brackets & Rates, which is essentially an inflation adjusted modification …

Credit Score Calculations Will Change In 2019 – Financial Planning – January 2019

Credit Score Calculations Will Change In 2019 – Financial Planning In response to pressure from regulators and the banking industry, credit reporting firms will offer modified credit scores starting in 2019. The modifications include the calculation of utility and cellphone bills that millions of Americans pay every month. Banks have argued that a large group of consumers nationwide just don’t …

The Common Occurrence Of Government Shutdowns – Fiscal Policy – January 2019

The Common Occurrence Of Government Shutdowns – Fiscal Policy Government shutdowns have been a common occurrence over the years under most every president. The length of the shutdowns have varied from 2 days in 1981 under President Reagan to 21 days in 1996 under President Clinton. A shutdown occurs when Congress fails to pass or the President refuses to sign …

U.S. Became Net Oil Exporter In 2018 – Oil Industry Overview – January 2019

U.S. Became Net Oil Exporter In 2018 – Oil Industry Overview December marked the first time ever that the U.S. exported more crude oil and fuel than it imported, a result of ambitious U.S. production and the lifting of a decades old ban on U.S. oil exports in December 2015. Early in 2018, the International Energy Association (IEA) projected that …

Short Term Bond Rates Rise – Fixed Income Review – January 2019

Short Term Bond Rates Rise – Fixed Income Review Shorter term bond yields rose closer to longer term bond yields, thus further flattening the Treasury bond yield curve, an economic gauge closely followed by market analysts. The benchmark 10-year Treasury Bond ended the year at 2.69%, down from a mid-year high of 3.24% it reached in November. The Fed indicated …

Global Equity Markets Decline – Equity Review

Global Equity Markets Decline – Equity Review Volatility throughout the trading year kept stock valuations tough to determine. A popular process that analysts use to value stocks is based on Price Earnings (PE) ratios, calculated by dividing the current market price of a stock by its earnings per share. PE ratios for stocks began the year above 20 for all …

Macro Economic Overview – January 2019

January 2019 Macro Overview Weariness among investors escalated towards the end of 2018 as uncertainty surrounding trade, the Federal Reserve, a government shutdown, and global economic growth lingered into the new year. Even during the turbulent year of 2018, the U.S. economy continues its resilience into 2019, with unemployment at its lowest level in 49 years, wage growth reaching levels …

Tax Breaks For Family Caregivers – Tax Planning

As the number of elderly has grown nationwide, so has the need for caregivers. The baby boom generation, the largest demographical segment of the U.S. population at 74 million, are now entering their late 60s and early 70s. Many are still very capable of caring for themselves, but others are in need of assistance as they progress into their senior …

Timely Year End Tax Actions – Tax Planning

The alteration in the standard deduction and how taxpayers have been accustomed to using it may be the single most important factor for tax planning into 2019. The increase in the standard deduction is designed to simplify taxes for millions of tax payers. So rather than itemizing deductions, some taxpayers will instead just take the standard deduction, which has increased …

Oil Prices Take A Large Drop – Commodities Update

Global oil prices declined sharply in November, with the domestic benchmark (WTI) falling 22% for the month, the single largest monthly drop in 10 years. The steep drop in price is a result of increased production by U.S. producers as well as Saudi Arabia, Russia, and OPEC. The recent price decline is of grave concern to OPEC, Russia, and Saudi …

Rates Fall In November – Fixed Income Update – December 2018

The recent trend in rising rates slowed in November as expectations intensified that the Fed may not raise as ambitiously in 2019 as initially projected. The yield on the 10-year Treasury bond fell from 3.24% at the beginning of the month to 3.01% at month’s end. The drop in rates may be interpreted by equity markets as either positive or …

Year End Volatility For Equities – Global Equity Market Overview

Major U.S. equity indices stabilized in November as markets reassessed October’s pullback. The Dow Jones Industrial and S&P 500 indices made up of larger cap stocks rebounded over 1.5% in November, outpacing the tech heavy Nasdaq index for the month. Emerging market equities rebounded in November as the dollar’s rise slowed and investors found value in various developing economies. Ongoing …

Insurance Losses By State Are Adding Up – Insurance Sector Review

As natural disasters mount from wild fires in California to hurricanes and flooding in Texas, Florida and the East coast, insurance claims are in the billions of dollars and growing. Most major insurance companies offer and issue various types of insurance, including liability, fire, flood, earthquake and homeowners. As claims increase with one or two of the coverage segments, coverage …

Used Car Sales Are Heading Higher – Consumer Behavior

Over the past few months, the demand for used automobiles has been rising, with the difference in prices between new autos and used autos the largest it has been in years. Consequently, as the demand for used cars has increased, so have used car prices, as tracked by the Federal Reserve Bank of St. Louis. Even with the recent price …

Macro Overview – December 2018

The Group of Twenty (G20) summit in Argentina produced two significant trade deals for the United States, a revised trade agreement with Canada and Mexico as well as a trade tariff truce with China. The trade arrangements were initially received positively by global financial markets alleviating months of uncertainty surrounding trade and international commerce. Skepticism surrounding the trade truce with …

Yields On A Rise – Fixed Income Overview Update

Yields rose across all fixed income sectors in October, with the benchmark 10-year U.S. Treasury yield rising from 2.99% to 3.23% mid-month. Even with the current rise in rates, yields are still below historical averages. Some analysts are expecting a slow and moderate rise in rates over the next few months as the Fed orchestrates its monetary policy strategy. There …

China Not Placing Tariffs On Imported Oil From U.S. – International Trade

Part of the tariffs imposed by China on U.S. goods from the United States included crude oil when first announced in June. The Chinese have since reconsidered the tariff and have left it off the initial list of $16 billion worth of U.S. imports. As reliance on imported oil has dramatically fallen for the United States, the reliance has increased …

The Dollar’s Supremacy – Currency Update

Some believe that the dollar’s rise may continue as investors seek stability in the world’s healthiest economy. U.S. capital markets remain the largest and most liquid of all financial markets globally, attracting international investors. The Trade Weighted U.S. Dollar Index, as compiled and tracked by the Federal Reserve, has seen a consistent and steady increase since the beginning of the …

Historically Volatile October Did It Again – Domestic Equity Markets Update

Stocks in all categories suffered in October as the month saw declines across all major indices. The initial imposition of tariffs hit U.S. company earnings in October as well with rising material costs hindering profits. Aluminum, steel and smaller components were among the items affecting manufacturing costs the most. Several U.S. companies plan to increase prices on their products in …

Social Security Payments Increasing By 2.8% – Retirement Planning

Social Security recipients are due to receive the largest increase in benefits in seven years. But for many recipients, the increase in payments will go towards higher Medicare costs. As of September 2018, over 67.6 million Americans currently receive Social Security benefit payments, with 46.3 million aged 65 or older. The Social Security Administration announced a 2.8% increase in benefit …

Mortgage Rates Rise To Seven Year High – Housing Market Review

Thirty-year mortgage rates have surged to the highest levels in seven years, increasing borrowing costs at a time when the housing market is slowing and prices have been falling. The 4.86% conforming rate at the end of October was the highest rate since April 2011, according to data from Freddie Mac. The average 15-year conforming mortgage rate climbed to 4.29% …

Macro Overview / November 2018

Historically volatile October was validated once again by dramatic price swings for both stocks and bonds. Among the catalysts behind the volatility were rising rates, a strong dollar, tariffs, and waning benefits stemming from the tax cuts. Markets are transitioning from a deflationary environment to an inflationary environment, returning to levels that the Fed classifies as normalized. Rising rates are …

Products Exempted From New Tariffs ..For Now – Trade Policy

Of the 5,745 products that have been tagged with tariffs as they arrive in the U.S. from China, a handful have been omitted from tariffs. Among the exempted products are ibuprofen, barite, fluorine salts, and smartwatches. As newly imposed tariffs became effective in late September, numerous industries and companies have realized how vulnerable the U.S. is to various products and …

Household Equity Rising as Mortgage Debt Falling – Housing Market Overview

Following the debacle of the housing crisis from ten years ago, homeowners have become less ambitious and more conservative. Equity levels in homes across the country have respectfully increased past mortgage debt levels over the past few months. The latest data from the Fed shows that household equity is now approaching $16 trillion, exceeding the level of mortgage debt standing …

Larger Increase in Benefits Than Income – Labor Market Review

As companies struggle to keep existing qualified workers as well as attract and hire new workers, the task of keeping labor costs minimized becomes an increasing challenge. Rather than paying higher wages, some employers are compensating their employees with enriched benefits. The Department of Labor monitors not only how much companies pay their employees, but the breakdown of how companies …

Senior Bankruptcy – Retirement Planning

The rate at which seniors file for bankruptcy has more than tripled since 1991 amid reductions in retirement and benefit payments. Of the people that are filing for bankruptcy each year, 12.2% are aged 65-74 versus 2.1% for the same age group in 1991. Adding to financial burdens, the age at which full benefits are paid by Social Security has …

When Taxes Replaced Tariffs – Historical Note

As a young country, the first of tariffs enacted to protect American business interests was the Tariff Act of 1789. The act was written to raise funds for the newly established government, reduce debt from the Revolutionary War, and protect U.S. companies from unfair foreign competition. At the time, Congress passed tariff amounts from 5% to as high 50%. For …

International Markets Struggle – International Equities

European markets reacted to a possible impasse regarding negotiations surrounding the exit of Britain from the EU, also known as Brexit. Six months remain before the formal separation between the two occurs. Developed and emerging market equity indices are having a tough time keeping up with U.S. equities, with most major international indices posting negative returns for the year. Emerging …

Rates On The Rise – Fixed Income Update

The Fed announced its third rate hike for the year, indicating another rate increase anticipated in December and three more to follow in 2019. The Fed’s key policy rate, the Federal Funds Rate, now stands at a range of 2% – 2.25%, the highest in ten years. Borrowing rates are gradually increasing in various consumer sectors including autos, appliances, and …

Economic Data Influences Stocks – U.S. Equity Update

Major equity indices all posted gains for the third quarter, with the S&P 500 advancing 7.2%, the Dow Jones Index gaining 9%, and the Nasdaq rising 7.1%. It was the single best quarter for stocks since 2013, buoyed by recent corporate tax cuts, improving earnings, and stable economic growth. A notable shift occurred in the third quarter as equities surpassed …

Macro Overview / October 2018

The Fed raised rates for the third time this year, signaling it was on track for further hikes over the next few months. Rates moved higher across the fixed income spectrum, with the 10-year Treasury bond piercing the 3% mark, a level last reached in May of this year. The Federal Reserve also revised its estimates for GDP growth from …

Yields Continue To Flatten – Fixed Income Update

– September 2018 A flattening Treasury yield curve remained a focal topic among fixed income analysts in August. The shrinking spread, or difference, between the yield on the 2-year Treasury note and the 10-year Treasury bond reached levels not seen since 2007. The interpretation is that longer term economic growth is expected to be muted, which is reflected in the …

Leading Scams Targeting Seniors – Retirement Planning

– September 2018 The National Council on Aging estimates that nearly 1 in 10 Americans over the age of 60 experiences some form of financial elder abuse. IRS Scams Callers claiming to be IRS agents often call unsuspecting seniors at home, accusing them of owing back taxes and having to pay immediately. The IRS impersonators threaten to foreclose on homes, …

Trade & Currency Concerns – International Update

– September 2018 Currency and debt concerns among emerging markets drove global volatility upward. Fiscal turmoil with Turkey and Argentina spread to other emerging economies as the fear of contagion rose. A stronger U.S. dollar in addition to tariff tensions added to the uncertainty as emerging market currencies fell versus the dollar. Russia, considered an emerging market, was also affected …

Federal Government Revenue Heading Higher – Fiscal Policy Overview

– September 2018 The Congressional Budget Office (CBO) released its summary of the most recent federal budget as of July. The deficit of the first 10 months of the fiscal year 2018 reached 682 billion dollars, up $116 billion from a year earlier. Federal spending increased by $143 billion, attributable to increases in Medicare, Medicaid, and Social Security expenditures. What …

Households Holding Less Debt – Consumer Behavior

– September 2018 The New York Federal Reserve Bank compiles data on how much debt and what type of debt households have. The most recent release of debt data shows that household debt as a percentage of disposable income fell to the lowest levels since 2002. Debt payments include loans on autos, mortgages, education, and credit card balances. The data …

Equities Maintain Their Resilience – U.S. Equity Markets

– September 2018 A persistent trade dispute between the United States and China has been lingering over the financial markets for some time now. Helping to buoy domestic markets are strong corporate earnings and improving economic data. Earnings from U.S. companies this quarter are being considered the healthiest since the third quarter of 2009 during the financial crisis. Some U.S. …

Emerging Market Currencies Experience Volatility

– September 2018 Currency valuations across the emerging markets are being affected by recent financial turmoil in Turkey and Argentina. The Turkish currency, the lira, has fallen over 40% year to date versus the U.S. dollar. The Turkish lira has been the hardest hit so far this year of all of the emerging market currencies. Emerging market currencies, as tracked …

Wireless Rates Are Due To Climb – Consumer Expenditures

– September 2018 Cell phone bills are rising across the country as providers eliminate promotions and consolidate operations. The announcement of recent mega mergers in the industry has reduced the number of providers and lessened competition, leading to increased rates for customers. As tracked by the Labor Department’s Consumer Price Index (CPI), the cost of cell phone service is a …

Macro Economic Overview – September 2018

Trade and tariffs continued at the forefront of discussions among the U.S. and international trading partners. Topics at hand included the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO), and protecting U.S. intellectual property rights internationally. Emerging market currencies were rattled worldwide as turmoil with Argentina and Turkey spilled over into the broader markets. Contagion concerns spread …

New Rules Benefit 529 College Savings Plans As An Estate Tool

The Tax Cuts and Jobs Act includes a provision to now allow 529 Plans to be used for private elementary and high school expenses, rather than just college related expenses. The new rules are a treat for both parents and grandparents looking for a better way to pay for private educational costs. Until now, the only plan that allowed for …

Macro Overview 2-1-2108

The rally in stocks that began following the election in 2016 propelled through 2017 as optimism and expectations that growth oriented policies and tax cuts would materialize. Political turmoil was not a deterrent for the markets, as major U.S. equity indices finished the year at near record levels. The Tax Cut & Jobs Act was signed into law by the …

Deficit History & Tax Cuts – Fiscal Policy

The passage of the Tax Cuts & Jobs Act has prompted a flurry of analysis and criticism surrounding the affects on the Federal deficit due to lower tax revenue. Critics claim that the loss of tax revenue due to tax cuts will eventually lead to an increase in the Federal deficit unless economic growth is achieved. The affect on individuals …

Equity Overview – Global Stock Update

Global markets accelerated throughout 2017, marking new highs and sending broader market indices higher. The election prompted rally in domestic stocks continued on in 2017 as optimism and expectations that growth oriented policies and tax cuts would fuel earnings appreciation. International markets excelled in 2017 as both developing and emerging stocks were boosted by expanding economies throughout Europe and Asia. …

Bitcoin & The Greater Fool Theory – Consumer Behavior

A Bitcoin exchange in South Korea went out of business in December after it was hacked by cyber thieves that stole roughly 20% of it’s clients holdings, validating that cyber currency exchanges are still extremely susceptible to losses. Unlike a bond, stock or real estate, a cryptocurrency offers no intrinsic value, such as cash flow and earnings. Instead, the value …

The New Tax Bill – Fiscal Policy Review

Both individual taxpayers and companies will see broad changes for deductions and tax rates. The emphasis of the tax bill, known formally as the Tax Cuts & Jobs Act, is to stimulate economic activity via new and higher paying jobs. This is why many of the changes directly benefit large and small businesses in order to encourage hiring. Some of …

Car Prices Are Falling – Auto Industry

Seven consecutive years of increasing U.S. auto sales have put a glut of vehicles on U.S. highways. In addition, a significant number of those sales were with a lease, leading to a rising tide of cars flowing back into the market as lease terms expired.  As automakers have added manufacturing capacity, they have also been aggressive in offering larger incentives on new vehicles in …

Consumers Are Spending More & Saving Less – Consumer Behavior

Recent government data reveals that Americans have been supporting their spending with their savings. The increase in spending is also recognized by economists as a sign of optimism and consumer confidence. Commerce Department data show that consumers have been spending more, as measured by the Personal Consumption Expenditures (PCE), and saving less, as measured by the savings rate, which fell to a ten-year low …

Social Security Payments Increasing By 2% – Retirement Planning

Social Security recipients are due to receive the largest increase in benefits in six years. But for many recipients, the increase in payments will go towards higher Medicare costs. The Social Security Administration announced a 2% increase in benefit payments effective in late December 2017 for disability beneficiaries and in January 2018 for retired beneficiaries. The 2% increase is the …

Macro Overview November 2017

An improving economic environment and earnings optimism propelled markets higher, along with prospects that there might be some agreement on tax reform in Washington. The House of Representatives released a draft of tax policy proposals known as The Tax Cuts & Jobs Act. The prospect of lower taxes for corporations and individuals are part of the proposals while also targeting …

Shorter Settlement For Stocks & Bonds – Financial Planning

Commencing September 5, 2017, the settlement period for most security transactions will be shorten to two days, from three days. The two-day settlement date applies to most security transactions, including stocks, bonds, municipal securities, mutual funds traded through a brokerage firm, and limited partnerships that trade on an exchange. Government securities and stock options will continue to settle on the …

More Homes For Sale, Less Homes Sold – Housing Market Update

Dynamics within the housing market are a result of wages, consumer sentiment, interest rates, and the economic environment. Over the past year, the number of homes for sale and the number of homes sold has diverged. The U.S. Department of Housing and Urban Development carefully tracks all home listings and sales on a monthly basis. The most recent data available …

Costliest Hurricanes – Historical Note

As flood waters recede in Texas, Hurricane Harvey is on track to be one of the costliest natural disasters in U.S. history. Not since Hurricane Katrina, which ravaged Louisiana in 2005, and Gustav & Ike in 2008, have insurance companies been levied with billions of dollars in settlement claims. Fortunately, nearly nine years absent of a significant natural disaster has …

What To Do After A Major Credit Data Breach – Consumer Awareness

Be Proactive: Request A Copy Of Your Credit Report Now! Consider Freezing Your Credit: Only If You’re Not Applying For Credit Soon Subscribe To A Credit Monitoring Service: Most Are Monthly Subscriptions There are three major credit reporting companies in the United States: Equifax, Transunion, and Experian. Even though the three are distinct entities, they all perform very similar functions.This …

Recent Fed Rate Hikes In Question – Monetary Policy

Over the past 27 years, the Federal Reserve has raised it key rate, the Federal Funds Rate, 35 times, each to slow down inflationary pressures and to curtail elevating price levels. The Fed increased rates aggressively and consistently in 1994 to hold off a rapidly expanding economy, lifting rates six times for the year. A decade later, the Fed raised …

Macro Overview – July 2017

International markets reacted in June as central banks throughout Europe and Asia signaled that monetary stimulus efforts were slowly being dispatched. The news propped up European currencies including the euro, pound, and Swiss franc as anticipated higher rates tend to bode well for currencies. Central banks from around the world are slowly curtailing stimulus efforts and starting the process of …

Chinese Stocks Get Inducted – International Update

The European Central Bank (ECB) hinted that it might start curtailing its stimulus program as accelerating growth takes hold throughout Europe. The news drove European bond prices lower and yields higher, simultaneously lifting the euro. China was inducted into the MSCI Emerging Markets Index, a long awaited move by Chinese companies and international investors. MSCI, a U.S. company providing key …

Equity Overview – Global Equity Overview

The equity markets started to experience what stock analysts call a sector rotation, when one or several sectors fall out of favor leading to funds flowing to other sectors. This past month technology stocks fell as markets perceived that the sector may have become overvalued. As this occurred, banking and financial sector stocks rose, as favorable regulatory related news lifted …

Americans Are Working More & Sleeping Less – Demographics

The Department of Labor in June released a survey, called the American Time Use Survey, on how much time Americans spend working, sleeping, and a host of other activities. Nearly 10,500 people were surveyed by the Labor Department nationwide for this latest report. The survey found that Americans spent just over 4.5 hours each weekday working in 2016, an increase …

The Evolution of Bitcoin – Market Fact

An emerging form of digital currency has received tremendous media coverage this past month, Bitcoin, which is essentially virtual money that is traded digitally by exchanges. Bitcoins can only be purchased and sold with legitimate currency, such as dollars or euros, making it available worldwide. The total estimated value of Bitcoins worldwide as of May 30, 2017, is over 36 …

Fixed Income Update – Global Bond Markets

Analysts believe that demographical factors are increasingly influencing the direction of fixed income markets. Even after the fed raised rates this past quarter, along with a series of rate increase expectations, bond yields have reversed and headed lower. The 10-year U.S. Treasury Bond yield fell in April to 2.29%, levels last reached in November 2016. Volume of investment grade bonds …

A Brief History of Tax Cuts – Historical Note

For nearly a hundred years, tax cuts have been a centerpiece of political strife among politicians, with both parties at times lobbying for lower tax rates. An accepted belief has been that lower taxes widen the Federal deficit and provide no economic expansion. Contrary to this belief, prior tax cuts enacted by various presidential administrations actually yielded economic growth and …

Macro Overview – May 2017

Fiscal policy has taken center stage as President Trump’s tax proposals will begin a drawn out process for legislative approval. Individuals, small businesses, and large corporations are expected to benefit from the various proposals. Geopolitical risks weighed on global financial markets during early April as investors sought fixed income. Regardless, global equity markets achieved higher levels as confidence returned. French …

Oil Imports Into The U.S. Slowing – Commodities

For decades, the United States has relied on oil and petroleum imports in order to meet demand. Following the second world war, demand for gasoline and petroleum in the U.S. rose dramatically as economic growth and automobiles drove demand up. The Arab Oil Embargo of 1973-1974 tested the United States and its tolerance for reliance on the valuable commodity. As …

Brexit Is Finally Underway – Euro Region Update

Ever since British voters decided to have Britain exit the European Union (EU) in June 2016, the process and timeline of the exit have been in question. This past month, British Prime Minister Theresa May triggered Article 50 which begins a two year period of negotiations with the EU on exiting the union and establishing remediary trade arrangements with applicable …

Auto Sales May Have Peaked – Industry Overview

Low interest rates and aggressive leasing programs have made some fairly expensive cars affordable. Rather than struggling to get approved for a new home loan or refinance, Americans have instead financed cars, where getting a loan approval has been easier. The abundance of attractive loans has helped elevate auto sales throughout the country over the past few years. Recent auto …

Household Debt On The Rise Again – Consumer Finance

According to data from the Federal Reserve Bank of New York, total household debt climbed to $12.58 trillion at the end of 2016, an increase of $460 billion for the year, making it the largest increase in almost a decade. The current amounts are almost equal to the debt levels Americans had in 2008, when total consumer debt reached a …

Macro Overview – April 2017

Equity markets advanced during the first quarter as improving economic data supported gradually rising earnings. A steady and predictable path of anticipated rate increases this year by the Federal Reserve was well received by financial markets. Domestic equity indices ended positive for the first quarter of 2017. The Dow Jones Industrial Index was up 4.6%, the S&P 500 Index returned …