Economic Update

BREXIT VOTE BATTERS GLOBAL MARKETS The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessions with losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2 A GAIN FOR EXISTING HOME SALES IN MAY Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million

Weekly Market Commentary 6-27-2016

The Markets Surprise! Britain is leaving the European Union (EU) after 40 years of membership. Last Thursday, almost three-fourths of voters in Britain – about 30 million people, according to the BBC – cast ballots to determine whether the United Kingdom would remain in the EU. By a slim margin, the British people opted out. Early Friday, Reuters reported on the immediate and potential repercussions of the decision: “Britain has voted to leave the European Union, forcing the resignation of Prime Minister David Cameron and dealing the biggest blow since World War II to the European project of forging greater

brexit

A worldwide selloff occurs after the United Kingdom votes to leave the European Union. A wave of anxiety hit Wall Street Friday morning. Thursday night, the United Kingdom elected to become the first nation state to leave the European Union. The “Brexit” can potentially be finalized as soon as the summer of 2018.1 Voters in England, Scotland, Wales, and Northern Ireland were posed a simple question: “Should the United Kingdom remain a member of the European Union or leave the European Union?” Seventy-two percent of the U.K. electorate went to the polls to answer the question, and in the final

Brexit

Investors worldwide are concerned about the possibility of a “Brexit”: the potential exit of “Britain” (to be precise, the United Kingdom) from the European Union. A Brexit would represent a significant crack in the foundation of the EU. Economists believe it might produce a recession in the U.K., and when one economy slumps, there are always regional and international consequences.1 Right now, Wall Street has its eyes on a date: June 23. On that day, U.K. voters will head to the polls for a referendum on whether or not to leave the EU. A June 15 poll in The Times

MONTHLY NEWS AND INFORMATION FOR CURRENT AND FUTURE RETIREES RETIRING WITH A COMFORTABLE LEVEL OF INCOME In retirement, your level of income directly affects your quality of life. How can you effectively give yourself more spending power? From a portfolio standpoint, you can focus on income-producing investments. When you start planning for retirement, you invest with an emphasis on growth. As you transition to retirement, growth remains important – but you also need to seek investments that can potentially create ongoing income streams. In addition, you can plan to make your portfolio more tax-efficient. Too many investors pay too little

Economic Update

RETAIL SALES RISE another HALF-PERCENT This healthy May increase follows the 1.3% gain recorded by the Department of Commerce for April, and offers more evidence that the economy has rebounded from a sluggish first quarter. Core retail sales (minus auto and gasoline purchases) were up 0.4% last month.1 INFLATION CONTINUES TO FIRM According to the Bureau of Labor Statistics, consumer prices rose 0.2% in May while producer prices advanced 0.4%. While a drop in food prices tempered the gain in the Consumer Price Index, the core CPI (which strips out energy and food costs) was up 2.2% in a year,

The Markets The world’s stock markets took it on the chin last week. A one-two punch was delivered with the Federal Open Market Committee (FOMC) meeting leading and concerns Britain will leave the European Union following. On Wednesday, the Federal Reserve confirmed what many had suspected. There would be no June rate hike. There was unexpected news, too. The Fed lowered its projections for U.S. growth to 2 percent through 2018. Barron’s reported the stance of various committee members had shifted from the previous meeting: “At this week’s confab, there were seven projections for two increases, to 0.875 percent, and

Weekly Market Commentary 6-13-2016

The Markets The British may be leaving. The British may be leaving. Last week, the interest rate on 10-year U.S. Treasuries dropped to levels last seen in 2013. Why, you may ask, would bond yields move lower when Federal Reserve policy is to push interest rates higher? The answer can be found across the pond. On June 23, the United Kingdom, a.k.a. Britain, will vote on whether the country should remain in the European Union (EU) or leave. The New York Times reported: “The economic effect of an exit would depend on what settlement is negotiated, especially on whether Britain

Economic Update

A LITTLE LESS OPTIMISM IN EARLY JUNE On Friday, the University of Michigan’s initial June survey of consumer sentiment showed a slight retreat, with the index coming in at 94.3 versus its final May mark of 94.7. The survey’s chief economist, Richard Curtin, noted “consumers rated their current financial situation at the best levels since the 2007 cyclical peak largely due to wage gains” and also had “record low inflation expectations.” On the downside, consumers felt the economy was stronger a year ago.1 YELLEN OFFERS NO HINT OF SPRING RATE HIKE Speaking in Philadelphia last week, Federal Reserve chair Janet

Is Fixed Income safe?

Two studies suggest that the “conventional wisdom” may be flawed. If you move away from equities with age, are you making a mistake? For some time, financial professionals have encouraged investors to lessen their exposure to the stock market as they get older. After all, a 60-year-old has less time to recover from a market downturn than someone decades away from collecting Social Security checks. Is that conventional thinking flawed? It might be. It isn’t simply a matter of looking at the future; you may also want to look at the past. What’s the price of playing not to lose?

Monthly Economic Update June 2016

THE MONTH IN BRIEF Investors did not exactly “sell in May and go away” – the S&P 500 gained 1.53% last month. Oil prices settled into a sweet spot of sorts; they were high enough to soothe analysts, but not so high as to portend gas price spikes for consumers. Fundamental indicators pointed to an economy leaving its first-quarter doldrums behind; the real estate market looked especially hot. Hiring moderated, but retail sales, personal spending, and inflation picked up. It was enough to stir questions about an interest rate hike, and certain Federal Reserve officials publicly entertained that possibility.1 DOMESTIC

The Markets Statistics means never having to say your certain, and that was certainly true last week. The employment report, which was released on Friday, was a bit short on jobs. Analysts had predicted employers would add about 162,000 new jobs during May, according to CNBC. Instead, a paltry 38,000 jobs added to payrolls. The United States Department of Labor focused on the fact the United States has experienced 75 consecutive months of private-sector jobs growth, as well as the significant decline in unemployment. The unemployment rate fell from 5.0 percent to 4.7 percent – but it was largely attributed

Economic Update

MAY SAW WEAKEST JOB GROWTH IN 5+ YEARS Did any economist foresee payrolls expanding by just 38,000 jobs in May? The median forecast compiled by MarketWatch projected a gain of 155,000, not the worst number since September 2010. The Department of Labor reduced March and April payroll gains by 59,000 in its new report, meaning monthly job creation averaged 116,000 in the past three months. As labor force participation declined 0.6% in May, the headline jobless rate fell to 4.7%. Annualized wage growth was at 2.5%.1,2 CONSUMERS FLEX THEIR PURCHASING POWER In better news, personal spending rose 1.0% in April

Economic Update

WILL THE FED MAKE A MOVE IN JUNE? In April, the Consumer Price Index advanced 0.4% – its largest monthly gain since February 2013. While a 10% leap in gasoline prices contributed to that rise, this and other recent signals of economic vigor may be influencing the Federal Reserve. Last week, minutes from the central bank’s April policy meeting showed Fed officials broadly agreeing that an interest rate hike could be appropriate next month if economic indicators strengthened and inflation accelerated. The CPI rose 1.1% in the year ending in April, but the yearly gain for the core CPI was

Weekly Market Commentary 5/23/2016

The Markets A mobile trivia game maker recently assessed the playing habits of Americans and identified the most popular topics by state. As it turns out, Alabamians like college football questions, Alaskans like queries about U.S. states, Rhode Island natives prefer inquiries about the human body, and Wisconsinites love their Green Bay Packers. We think markets, finance, and economics offer fine fodder for quiz trivia. Test your knowledge with these questions about recent and pending market events: What is ‘Brexit?’ The United Kingdom will hold a referendum in June to decide whether it should remain in the European Union. According