Monthly Economic Update December 2015

December 2015 THE MONTH IN BRIEF While the Russell 2000 and Nasdaq Composite advanced significantly in November, the S&P 500 did not – the broad U.S. benchmark rose a mere 0.05%. Terrorists took hundreds of lives in France, Lebanon, Nigeria, Mali and Tunisia during the month, and the fear in the wake of those attacks was felt in the investment markets. Federal Reserve policy minutes contained strong hints that the central bank could raise interest rates in December, a signal investors accepted without disillusionment. Oil, gold and many other major commodities retreated. Key consumer confidence, consumer spending and manufacturing indicators

Economic Update

CONSUMER SPENDING IMPROVES 0.3% This November increase matched the forecast of economists polled by, and it was a nice change after a flat October reading (revised down from an initially reported 0.1% gain). Consumer incomes also rose 0.3% in November. (1) HOUSEHOLD OPTIMISM INCREASES IN DECEMBER At mid-month, the preliminary University of Michigan consumer sentiment index presented a reading of 91.8. Last week, it rose slightly to 92.6. Analysts surveyed by expected a final December reading of 92.0. (1) RULE CHANGES HAMPER EXISTING HOME SALES New mortgage disclosure rules instituted by the federal government delayed some closings in

Economic Update

TIGHTENING BEGINS As anticipated, the Federal Reserve raised the benchmark interest rate by 0.25% last week. The Federal Open Market Committee voted 10-0 to make the move. Its latest dot-plot forecast projects four rate hikes during 2016, which would put the federal funds rate above 1% by the end of next year. The Fed also adjusted the discount rate charged to commercial banks, raising it a quarter-point to 1.0%. (1,2) ANOTHER TOUGH WEEK FOR OIL Baker Hughes data showed a gain in the number of active U.S. oil rigs last week, the first since mid-November. Light sweet crude slipped 0.6%

Retirement Newsletter

MONTHLY NEWS AND INFORMATION FOR CURRENT AND FUTURE RETIREES ARE YOU GOING TO RETIRE NEXT YEAR? If you are (and even if your retirement is a few years away), you should know the essential steps to take as you make the transition. Think about your workplace retirement plan – your last opportunities to contribute to it are coming up, and you must decide when you want to roll it over. If you are retiring in your fifties – whether from a civil service or private sector job – you may benefit from leaving the money in the plan a few

Weekly Market Commentary 12/28/2015

The Markets It was a short week, but it wasn’t quiet. Oil prices moved higher, according to The Wall Street Journal, after the U.S. Energy Information Administration reported crude-oil inventories fell unexpectedly last year. Analysts had predicted oil supplies would rise. One expert cited by The Wall Street Journal suggested the stockpile decline and subsequent oil price rally owed much to Gulf Coast refiners reducing inventories “to mitigate state ad valorem taxes on year-end crude stocks.” If that’s the case, the oil price increase may not be sustained. Regardless, improving oil prices gave U.S. stock markets a boost. In particular,

Weekly Market Commentary 12/21/2015.

The Markets After a level of hype that would have exhausted even the most dedicated Star Wars fans, the Federal Reserve finally began to tighten monetary policy last week, raising the funds rate from 0.25 percent to 0.50 percent. Although financial markets appeared sanguine when the rate hike was announced, the calm dissipated quickly. The Standard & Poor’s 500, Dow Jones Industrial, and NASDAQ indices finished the week lower. International markets fared better. Most finished the week higher. The last five times the Fed has begun to raise rates, the U.S. dollar has remained stable and stock prices have risen,

Interst Rate Hike

As the central bank starts tightening, some positives & negatives may emerge. Economists widely expect the Federal Reserve to raise interest rates this month. Additional incremental rate hikes may follow in 2016. If you are retired (or soon will be), you will want to consider what gradually higher interest rates could mean for you financially. Some of the effects are already being felt. Glancing at Freddie Mac’s weekly surveys, average interest rates for fixed-rate home loans climbed about 0.2% between October 8 and December 10 on assumptions of the federal funds rate rising. (Bond market behavior influences these rates as

Weekly Market Commentary

The Markets It’s not like it’s a surprise! Last week, investors didn’t appear to be thrilled with the possibility the Federal Reserve might raise rates this week. They also weren’t too impressed by another drop in oil prices. There was red ink everywhere as markets from Australia to Hong Kong, across the Eurozone, and throughout the Americas moved lower last week. Bloomberg reported there was a 74 percent probability of a Fed rate hike at the December Federal Open Market Committee meeting. The Wall Street Journal’s survey of business and academic economists put the chance at 97 percent. More than

Weekly Market Commentary 12/7/2015.

The Markets Anyone looking at U.S. stock market performance last week might assume it was a pretty quiet week. They would be wrong. It was a very bouncy week. U.S. stock markets moved lower on Monday, rebounded on Tuesday, and then appeared to suffer a one-two punch mid-week that knocked indices lower. On Wednesday, the benchmark U.S. oil price sank below $40 a barrel as supply continued to exceed demand, according to The Wall Street Journal (WSJ). Analysts had expected stockpiles of crude oil, gasoline, and other fuels to decline. Instead, stores increased to more than 1.3 billion barrels. The