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Catherine Bennett

Insurance When You Marry After 40

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With people marrying later in life these days, coverage has become even more important.

 

When you marry, you buy life insurance. Right? You buy it out of consideration for your spouse, and also realize that in the event of either your untimely death or your spouse’s untimely death, your household could be left with one income to shoulder expenses that may not lessen.

These days, people are marrying later in life. Take first marriages, for example. A recent study by the Pew Research Center says the median age for marriage in America is now 30 for men and 28 for women, compared to respective median ages of 23 and 21 in 1968. Today, 16% of us are waiting until at least our late forties to marry.1,2

Maybe you are marrying after age forty, or thinking about it. That might call for other insurance considerations besides having life insurance policy. Whether you are marrying for the first time or the second, third, or fourth time, your earnings and net worth may be much greater than they were ten, twenty, or thirty years ago, and you also may have some age-linked or business-linked insurance priorities.

These are worth discussing on your way to marrying. Are you and your spouse set to run a business or professional practice? Is there a significant occurrence of dementia in your family history, or your spouse’s family history? How about a particular, severe illness? These questions may seem tough to mull over as you approach the big day, but being pragmatic now might be wise for the years ahead.

Some of us will live very long lives, and possibly need assisted living someday. Marrying at mid-life or later means giving serious thought not just to life insurance, but also to ways to insure extended care. The Social Security Administration projects that today, the average 65-year-old man will probably live to age 83; the average 65-year-old woman will probably live to age 85. Advances in health care may mean even longer lifespans for those who turn 65 ten or twenty years from now. A percentage of us may be so “above average” that we live past 100, and that percentage may grow with scientific breakthroughs.3

Extended care coverage, or coverage that offers the potential to keep a household can be important in the marriage. It may be smart to have a life insurance trust created for the benefit of one spouse, or have one spouse own a particular policy.

Using a life insurance trust involves a complex set of tax rules and regulations. Before moving forward with a life insurance trust, consider working with a professional who is familiar with the rules and regulations.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Now is not too soon to think about these matters. Looking into these different insurance coverages could be a very kind thing to do for your future spouse, yourself, and your marriage.

……….

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Investment advice offered through American Wealth Management (“AWM”), a SEC-registered investment adviser. Certain personnel of AWM may also be registered representatives of M.S. Howells & Co. (“MSH”), Member FINRA/SIPC, a registered broker-dealer, and therefore, may offer securities through MSH. AWM and MSH are not affiliated entities.

Citations

1. Pew Research Center, May 27, 2020
2. Good Morning America, May 24, 2021
3. NerdWallet, November 6, 2020

March 13, 2017 – Weekly American Wealth Review

By Weekly Newsletter

Weekly Letter

The state of Missouri is commonly known as the “Show-Me” state a nickname that is said to have come from a speech given in 1899 by Missouri’s U.S. Congressman Willard Duncan Vandiver. During his speech, he said, “I come from a state that raises corn and cotton and cockleburs and Democrats, and frothy eloquence neither convinces nor satisfies me. I am from Missouri. You have to show me.”

This past week marked the beginning of the Trump administration’s rollout of the American Health Care Act, which if eventually passed will replace the Patient Protection and Affordable Care Act, also known as Obamacare. The choppiness in the broad market this past week, almost appeared to be a reflection of the back and forth goings on in congress over the proposed healthcare bill. With the U.S. stock market riding high on campaign promises of major reform to both healthcare and tax laws, investors will be watching closely in the coming weeks to see how well congress can work together to pass a health care bill that will benefit the majority of Americans.

Like Missourian’s, investors are at the point of saying to congress, “You have to show me.” Should congress lack the will to work together on health care reform, this would cause a significant erosion in investor confidence and lower expectations that congress can pass a meaningful tax reform bill later this year. As of Thursday’s market close, investors appear to be in favor of the new health care bill, with the Dow Jones U.S. Healthcare Index up 0.11 percent over the past five trading days, versus the S&P 500 which has slipped 0.71 percent over the same period.

Health care companies only make up approximately 14 percent of the Standard and Poor’s 500, so the success or failure of congress to agree on a new health care bill will only directly impact a slice of the companies that make up the U.S. economy. Of course, most if not all American companies will be impacted in some way by any new healthcare law.

Though Washington D.C. is having more of an impact on the stock market lately than the Federal Reserve, this week’s FOMC meeting seems to be having an impact on the bond market lately. Currently, the Fed Fund Futures were predicting a 100 percent probability of a rate increase at the conclusion of the Fed meeting this Wednesday, and a 47.6 percent probability of another rate increase at their June meeting.

Recently bond investors have become increasingly nervous, such that over the past two weeks the ICE U.S. Treasury 7-10 Year Bond index has declined 1.73 percent, and the ICE U.S. Treasury 20+ Year Bond index has fallen 3.17 percent over the same period.

However, the fact that the stock market is holding together as well as it is in the face of rising short-term and long-term interest rates is a good sign. It also means that investors will be looking for positive news from both economic reports and from Washington, that suggests the U.S economy can continue to grow in a higher rate environment.

Sincerely,
Laif E. Meidell, CMT

Happy St. Patrick’s Day! We hope you have a great week,
Pat Meidell, Laif Meidell and Heidi Foster

Weekly Economic Update

COMPANIES HIRED READILY IN FEBRUARY

U.S. firms added 235,000 net new jobs last month, and the latest Department of Labor employment report showed the largest growth occurring in the construction and education/health care sectors. The DoL also revised January’s job gains upward by 11,000 to 238,000. Payroll expansion has averaged 209,000 per month since December. The headline (U-3) jobless rate ticked down 0.1% to 4.7%, and the total (U-6) jobless rate, counting the underemployed, fell 0.2% to 9.2%.1

FED FUTURES MARKET: MARCH RATE HIKE A GIVEN

The CME Group’s FedWatch Tool, which tracks the prices of 30-day Fed Fund futures to get a bead on traders’ reactions to potential monetary policy moves, put the chance of a March 15 quarter-point interest rate hike at 93% Friday. The odds of another quarter-point move in June were put at 51%.2

OIL SLUMPS 9.1% IN A WEEK

During March 6-10, WTI crude had its worst week since November, retreating to a Friday close of $48.49 on the NYMEX. News of rising output and plentiful stateside inventory hurt prices. In other oil news, a billion-barrel crude reserve was just found in the Alaskan interior – the largest such discovery since the 1980s.3,4

STOCKS RETREAT, BUT JUST SLIGHTLY

As the bull market turned eight years old, the S&P 500 turned a bit south, losing 0.44% in five days. At the closing bell Friday, it stood at 2,372.60. The Nasdaq Composite also fell for the week, declining 0.15% to 5,861.73. The Dow Jones Industrial Average gave back 0.49% in the same interval, settling at 20,902.98 Friday.5

THIS WEEK

Monday, Del Taco and Jamba report Q4 results. The February PPI arrives Tuesday, along with earnings from Bon-Ton Stores, DSW, and Hostess Brands. Wednesday, investors worldwide react to the Federal Reserve’s latest monetary policy statement, plus the February CPI, February retail sales figures and earnings news from GUESS, Jabil Circuit, Oracle, and Williams-Sonoma. On Thursday, Wall Street reviews initial jobless claims, and the Census Bureau’s report on February construction activity; investors also consider earnings from Adobe Systems and Dollar General. The preliminary March University of Michigan consumer sentiment index appears Friday, complementing the Fed’s report on February industrial output and Q4 results from Tiffany & Co.

Meidell: Investors’ eyes on health care debate

By Published Articles

The state of Missouri is commonly known as the “Show-Me” state, a nickname that is said to have come from a speech given in 1899 by Missouri’s U.S. Congressman Willard Duncan Vandiver. During his speech, he said, “I come from a state that raises corn and cotton and cockleburs and Democrats, and frothy eloquence neither convinces nor satisfies me. I am from Missouri. You have to show me.”

This past week marked the beginning of the Republican rollout of the American Health Care Act, which if eventually passed will replace the Patient Protection and Affordable Care Act, also known as Obamacare. The choppiness in the broad market this past week almost appeared to be a reflection of the back-and-forth going on in Congress over the proposed health care bill. With the U.S. stock market riding high on campaign promises of major reform to both health care and tax laws, investors will be watching closely in the coming weeks to see how well Congress can work together to pass a health care bill that will benefit the majority of Americans.

Like Missourians, investors are at the point of saying to Congress: “You have to show me.” Should Congress lack the will to work together on health care reform, this would cause significant erosion in investor confidence and lower expectations that lawmakers can pass a meaningful tax reform bill later this year. As of Thursday’s market close, investors appeared to be in favor of the new health care bill, with the Dow Jones U.S. Healthcare index up 0.11 percent over the past five trading days, versus the Standard & Poor’s 500 index, which has slipped 0.71 percent over the same period.

Health care companies only make up approximately 14 percent of the S&P 500, so the success or failure of Congress to agree on a new health care bill will only directly impact a slice of the companies that make up the U.S. economy. Of course, most, if not all, American companies will be impacted in some way by any new health care law.

Though Washington, D.C., is having more of an impact on the stock market lately than the Federal Reserve, next week’s FOMC meeting seems to be having an impact on the bond market lately. As of Thursday’s close, the Fed fund futures were predicting a 100 percent probability of a rate increase at the conclusion of the Fed meeting this Wednesday, and a 47.6 percent probability of another rate increase at its June meeting.

Recently bond investors have become increasingly nervous, such that over the past two weeks the ICE U.S. Treasury 7-10 Year Bond index has declined 1.73 percent, and the ICE U.S. Treasury 20+ Year Bond index has fallen 3.17 percent over the same period.

However, the fact that the stock market is holding together as well as it is in the face of rising short term and long term interest rates is a good sign. It also means that investors will be looking for positive news from both economic reports and from Washington, that suggests the U.S economy can continue to grow in a higher rate environment.

Meidell: A pro-growth agenda is a powerful thing

By Published Articles

Whether you loved or hated President Trump’s speech to Congress on Tuesday evening, it’s clear that the U.S. stock market went from nearly flatlining on Tuesday to receiving a huge adrenaline shot on Wednesday, lifting the major market averages to new all-time highs, and the Dow Jones Industrial Average by more than 300 points to close above 21,000 for the first time in history. Over that past two decades, large swings in the stock market were more likely to have been associated with comments or actions from a central banker, and not from a sitting president. We have to go back to President Bill Clinton’s term in office to find a time where the stock market was making new highs driven in part by a pro-growth presidential agenda.

It used to be that investors turned to central bankers like the Federal Reserve or the European Central Bank for direction on the economy and how to allocate their capital within the financial markets. Over the past two decades, from Federal Reserve Chairman Alan Greenspan to Chairman Ben Bernanke, and now Chairwoman Janet Yellen, investors have tried to follow the money in order to ride the coattails of the central bank where possible. I say used to because that’s the way it was up until last week just before President Donald Trump spoke to Congress on Tuesday. In fact, following Monday’s close of this past week it was beginning to appear as though the stock market’s recent advance was likely running out of steam, particularly after posting a gain for the 12th consecutive day in a row, an event that has only taken place two other times in the last 120 years (there has never been a 13-day streak).

To be fair, Trump’s comments shouldn’t get all the credit for the market’s oversized rally on Wednesday, but it clearly lit the fuse. Don’t forget there were a fair number of investors early in the week who thought the market was going lower, at least for a few days, and had started to short the market in hopes of making some money on the way down. Some of these investors likely decided to reverse their short position, creating what is called a short covering rally. Additionally, in a report earlier this year, Aldridge and Krawciw estimated that in 2016 the daily trading volume on the stocks exchanges by computers, also referred to as algorithmic trading, accounted for 10 to 40 percent of the daily volume here in the U.S. This means that some of Wednesday’s rally, and Thursday’s decline, can also be attributed to computer programs trying to make a buck, and not just enthusiastic investors.

The point is not to diminish the impact of Trump’s comments on the stock market, but to keep a sober view of the short-term nature of some market rallies. In a larger context, what we are likely seeing, and maybe relearning, is that a pro-growth economic agenda is a powerful thing and should not be underestimated, if it can be supported by Congress later this year. This is a time when patience is a virtue. The problem some investors may have, particularly those who support the president, is becoming overly aggressive with their portfolio at a time in their life when they should be reducing their risk.

Looking ahead, the stock market still has to maneuver past the March FOMC meeting to be held on March 14 and 15. Like a 5-year-old on Christmas Eve, investors tend to get a little anxious just before the Fed’s interest rate announcement. Give that Yellen has left the door open for an interest rate increase this month, this time shouldn’t be any different.

February 28, 2017 – Weekly American Wealth Review

By Weekly Newsletter

Weekly Letter

Not many anticipated the stock market rally that began here in the U.S. following the Presidential election last November. If anything, the prevailing expectation by investors was more of the same slow growth economy and choppy stock market like we had seen the past couple of year under President Obama. To be fair, as President Obama’s term was coming to an end, the U.S. economy was beginning to see some green shoots of new growth, such the 2016 third quarter GDP reading of 3.5 percent, though this fell back to 1.9 percent in the fourth quarter of last year.

Unlike President Obama who took over the leadership of our country at one of the worst economic times in history, now known as “the great recession”, President Trump is taking the reins at a point of relative economic stability, but which lacks the growth necessary to provide jobs to the many Americans who would like to work but are still unemployed. Under the Obama administration the Federal Reserve responded to the economic crisis with three separate stimulus programs that essentially lifted the stock market up while keeping interest rates low. This allowed the economy and corporate profits to improve over time and justify stock valuations.

During their service as head of the Federal Reserve both Mr. Greenspan and Mr. Bernanke testified before congress that monetary policy wasn’t enough to reignite the economy, but that it also took fiscal policy from the legislative and executive branches of government to provide a more sustainable growth trajectory to the economy. At the time, the legislative branch didn’t have the will to craft such a plan. Today however, the Trump administration is promising to outline their fiscal stimulus plan in the coming weeks, the centerpiece of which includes an ambitious overhaul to the U.S. tax code. Though the plan has its skeptics, the administration is hopeful their fiscal stimulus package can be passed by August of this year, resulting in a more normalized economic growth rate of 3.0 percent or greater going forward.

Just like a sail boat using the wind to power its voyage, stock investors are attempting to get in front of this new source of stimulus, in hopes it will power their portfolios higher. When and if it occurs, the Trump tax plan could be a significant boom to the U.S. economy and the stock market, just as it was during the Regan years. However, the next several months will likely be a challenge for those investors who were hoping for an easy ride.

From election day (Nov. 8th) through last Thursday the Standard and Poor’s 500 had gained 10.48 percent, a respectable return in a little less than four months. As of Thursday, the Dow Jones Industrial Average had closed higher 10 days in a row, an accomplishment that suggests the advance is due at least for a pause. Though the stock market trends are pointing higher, without any new reason to reignite investor’s enthusiasm, the major market averages are more likely to consolidate their gains for a period before heading much higher.

Also on investors minds lately is the growing likelihood that interest rates are headed higher in the coming months. Recent comments by Federal Reserve President Janet Yellen have left the door open for a rate increase at the next FOMC meeting in March. However, as of Thursday, the Fed Fund Futures are projecting only a 38 percent probability of an increase at the March meeting, versus a 62.7 percent probability of an increase when they meet in May. Currently, U.S. Treasury bond prices are in a trading range, as bond investors attempt to navigate between a stock market that may be headed for a period of weakness and higher interest rates in the near future.

Sincerely,
Laif E. Meidell, CMT

We hope you have a great week,
Pat Meidell, Laif Meidell and Heidi Foster

Weekly Economic Update

A LITTLE LESS OPTIMISM AMONG CONSUMERS

February’s final University of Michigan consumer sentiment index came in at 96.3, down from its January mark of 98.5, but well above the 91.7 reading of a year earlier. Despite the descent, the index just had its best three months since early 2004.1FED

MINUTES SUGGEST RATE MOVE MAY BE NEAR

At the last Federal Reserve policy meeting, “many participants” in the Federal Open Market Committee felt it “might be appropriate to raise the federal funds rate again fairly soon” if inflation and hiring data are strong enough. Even with that language appearing in the latest FOMC minutes, the CME Group’s FedWatch Tool forecasts just a 22% chance of a quarter-point hike when the FOMC convenes in March.2,3

HOME SALES IMPROVED AT START OF 2017

According to reports from the Census Bureau and National Association of Realtors, new home sales advanced 3.7% in January, while existing home sales rose 3.3%. Tight inventory notwithstanding, new home purchases were up 5.5% from January 2016; resales were up 3.8% year-over-year.4

DOW EXTENDS ITS NOTEWORTHY WIN STREAK

Friday, the Dow Jones Industrial Average recorded its eleventh straight daily gain. The last time that happened? 1992. For the week, it rose 0.95% to 20,821.76. The Nasdaq Composite improved 0.11% in four trading days to 5,845.31; the S&P 500, 0.69% to 2,367.34. The S&P and Dow ended the week at all-time highs.5,6

THIS WEEK

Monday offers reports on January durable goods orders and pending home sales, and earnings from Frontier Communications, Hertz Global Holdings, Horizon Pharma, and Priceline Group. The Conference Board’s February consumer confidence index appears Tuesday, plus the second estimate of Q4 GDP and earnings news from Acadia Pharmaceuticals, AutoZone, Big 5, Domino’s, La Quinta Holdings, Palo Alto Networks, Ross Stores, SeaWorld Entertainment, Sempra Energy, Target, and Universal Health Services. On Wednesday, investors consider the latest ISM factory PMI, January’s PCE price index, January consumer spending, a new Federal Reserve Beige Book, and earnings from American Eagle Outfitters, Best Buy, Broadcom, Dollar Tree, Icahn Enterprises, Lowe’s, Monster Beverage, Office Depot, and Shake Shack. Thursday brings a new Challenger job-cut report, new initial claims numbers, and earnings from Abercrombie & Fitch, Autodesk, Barnes & Noble, Costco, Kroger, Staples, and Wingstop. Friday, Fed chair Janet Yellen speaks on the economic outlook in Chicago, ISM issues its latest non-manufacturing PMI, and Big Lots reports Q4 results. (The Department of Labor’s February jobs report arrives on March 10.)

February 21, 2017 – Weekly American Wealth Review

By Weekly Newsletter

Weekly Letter

After the long holiday weekend, investors appeared to return to the markets with renewed optimism on Tuesday. U.S. stocks gapped higher at the opening bell, following the pre-market release of better than expected earnings news from a few of the U.S.’s top retailers. Within the first half hour of the trading day, investors received an additional boost of confidence as the February PMI Manufacturing Index flash reported a reading of 54.3. Any reading of 50 or above signifies expansion in the manufacturing sector, so even though the February reading was slightly below the prior month’s reading of 55.1, it still signifies a decent rate of growth. The Flash report is usually released about a week prior to the final report and gives investors some heads up on what to expect for the current month.

All the major market averages closed at new all-time highs on Tuesday with the Standard and Poor’s 500 rising 0.60 percent and the Nasdaq Composite gaining 0.47 percent. More importantly, Tuesday’s rally was broad based, with the Russell 2000 Small Cap Index leading the way higher, up 0.78 percent on the day.

In some ways, the stock market’s advance looks completely healthy, such as the resent highs in the New York Stock Exchange’s advance decline line. However, for some subsets of the market such as small companies, other indicators are beginning to show that that number of small company stocks participating in the recent rally is beginning to decline. This means that fewer companies are lifting the indexes, and just one sign that a rally is running out of steam.

Another indication that the recent rally in long in the tooth is the recent outperformance of two typically defensive sectors. On Tuesday, the Dow Jones U.S. Real Estate Index rose 1.26 percent and the Dow Jones U.S. Utilities Index gained 1.01 percent on the day.

We will continue to watch and see what happens with the various government and economic announcements in the next couple of weeks.

Sincerely,
Laif E. Meidell, CMT

We hope you have a great week,
Pat Meidell, Laif Meidell and Heidi Foster

Weekly Economic Update

RETAIL SALES ROSE 0.4% IN JANUARY

Consumer spending on household electronics and appliances powered this gain. Analysts polled by Reuters had expected a 0.1% advance. Core retail purchases also rose 0.4% last month. The Department of Commerce revised the December increase for retail sales upward to 1.0%. Across the 12 months ending in January, retail sales advanced 5.6%.1

INFLATION PRESSURE MOUNTS

In January, the headline Consumer Price Index climbed 0.6%. That was its greatest monthly gain in four years, and it took annualized inflation to a 4-year high of 2.5%. Producer prices also jumped 0.6% in January, in the largest monthly increase seen since September 2012; that development left them up 1.6% year-over-year.1,2

BUILDING PERMITS UP, HOUSING STARTS DOWN

Unsurprisingly, groundbreaking declined in January. The Census Bureau recorded a 2.6% fall for housing starts in the winter weather. The rate of permits issued for future projects, however, increased by 4.6%.3

FURTHER GAINS IN A BULLISH FEBRUARY

The S&P 500 pulled off another weekly advance, adding 1.51% from February 13-17 on its way to a Friday settlement of 2,351.16. Its 5-day performance actually lagged both the Dow and the Nasdaq: the blue chips gained 1.75%, to 20,624.05, as the broad tech sector benchmark rose 1.82%, to 5,838.58.4

THIS WEEK

Monday is Presidents Day, so U.S. stock and bond markets are closed; America’s Car-Mart and Dillard’s report Q4 results. Tuesday, Advance Auto Parts, Cracker Barrel, HealthSouth, Home Depot, Kaiser Aluminum, La-Z-Boy, Macy’s, Medtronic, Newmont Mining, Nautilus, Papa John’s, Red Robin, and Walmart all join the earnings parade. On Wednesday, earnings from Cheesecake Factory, Chico’s FAS, DISH Network, Fitbit, Garmin, Green Dot, HP, Jack-in-the-Box, L Brands, Popeyes, Public Storage, Six Flags Entertainment, Square, Sunoco, Tesla, TJX, Toll Brothers, Transocean, and Weibo complement minutes from February’s Federal Reserve policy meeting and January existing home sales numbers. A new initial claims report arrives Thursday, along with earnings from AMC Networks, Baidu, Chesapeake Energy, Gap, Herbalife, Hewlett Packard Enterprise, Hormel Foods, iHeartMedia, Intuit, Kohl’s, Live Nation, Mitel, Nordstrom, Pinnacle Foods, Sears Holdings, Sprouts, and Toro. Friday, earnings from Berkshire Hathaway, Boise Cascade, Foot Locker, JCPenney, Magellan Health, and Revlon emerge, plus the final February University of Michigan consumer sentiment index and the January new home sales report.

Meidell: S&P 500’s value — a cool $20 trillion

By Published Articles

The big news Monday was the value of stocks listed on the Standard and Poor’s 500 surpassing $20 trillion for the first time, due to expectations of rising U.S. economic growth and improving corporate profits.

The major market averages continued their assent Monday, led by the Dow Jones Industrial Average, up 142 points or 0.7 percent. Though larger-company stocks received the largest boost from Monday’s rally, the advance was still broad-based, with the Russell 2000 small-company index gaining 0.25 percent and closing at an all-time high. Both the Standard and Poor’s 500 and the Nasdaq Composite rose 0.52 percent. Monday’s gains are a continuation of the rally that began Thursday after President Trump said he would unveil a “phenomenal” business tax package very soon.

According to Credit Suisse, smaller companies like those that make up the Russell 2000 have less access to international tax loopholes. As a result, smaller companies typically have to pay a 32 percent effective tax rate, versus the larger companies that make up the S&P 500 (a roughly 26 percent rate). For this reason, may investors believe smaller companies will benefit more if President Trump is successful in convincing congress to lower the corporate tax rate from 35 percent, the highest rate of any developed nation.

Investors appear to be anticipating the U.S. economy heating up in the coming months by how they are investing today. The top-performing sectors Monday were led by the Dow Jones U.S. Basic Materials index, up 1 percent, followed by the Dow Jones U.S. Financial index gaining 0.92 percent. These sectors appear to be anticipating inflation, which includes not only rising commodity prices, but rising interest rates, as well.

This week the top-performing commodities were led by the S&P GSCI Unleaded Gasoline index, up a staggering 16.54 percent over the past five trading days, followed by the S&P GSCI Wheat index, higher by 10.53 percent.

February 13, 2017 – Weekly American Wealth Review

By Weekly Newsletter

Weekly Letter

The big news on Monday was the value of stocks listed on the Standard and Poor’s 500 surpassing $20 trillion for the first time, due to expectations of rising U.S. economic growth and improving corporate profits.

The major market averages continued their assent on Monday led by the Dow Jones Industrial Average up 142 points or 0.70 percent on the day. Though larger company stocks received the largest boost from Monday’s rally, the advance was still broad based with the Russell 2000 small company index gaining 0.25 percent and closing at a new all-time high. Both the Standard and Poor’s 500 and the Nasdaq Composite rose 0.52 percent on the day. Monday’s gains are a continuation of the rally that began last Thursday after President Trump said he would unveil a “phenomenal” business tax package very soon.

According to Credit Suisse, smaller companies like those that make up the Russell 2000 have less access to international tax loopholes. As a result, smaller companies typically have to pay a 32 percent effective tax rate, versus the larger companies that make up the S&P 500 and pay a roughly 26 percent rate. For this reason, many investors believe smaller companies will benefit more if President Trump is successful in convincing congress to lower the corporate tax rate from 35 percent, the highest rate of any developed nation.

Investors appear to be anticipating the U.S. economy heating up in the coming months by how they are investing today. The top performing sectors on Monday were led by the Dow Jones U.S. Basic Materials index up 1.00 percent, followed by the Dow Jones U.S. Financial index gaining 0.92 percent on the day. These sectors appear to be anticipating inflation which includes not only rising commodity prices, but rising interest rates as well.

We will be watching to see what happens with the various tax announcements in the next couple of weeks.

Sincerely,
Laif E. Meidell, CMT

Happy Valentine’s Day! We hope you have a great week,
Pat Meidell, Laif Meidell and Heidi Foster

Weekly Economic Update

CONSUMER SENTIMENT SLIPS A BIT

The University of Michigan’s preliminary February index of consumer sentiment came in at a reading of 95.7 Friday, compared with a final January mark of 98.5 (which was a 13-year peak). Economists polled by Bloomberg had expected a slight decline to 98.0. While this was the index’s lowest level in three months, it still topped many of the monthly readings from 2016.1HOW IS

EARNINGS SEASON GOING?

Nearly two-thirds of S&P 500 members have issued Q4 results so far. As Zacks Investment Research noted Wednesday, more than 69% of these S&P components have beaten earnings-per-share estimates; more than 54% have surpassed revenue forecasts. Total Q4 earnings for S&P firms are projected to rise 7.3% over Q4 2015, the strongest annual earnings growth since Q4 2014.2

GOLD GAINS AS OIL WAVERS

Gold futures advanced 1.12% on the COMEX during a choppy week to a Friday settlement of $1,233.30. Light sweet crude for March delivery dipped at midweek, but then rebounded, settling at $53.81 Friday for a 5-day retreat of just 0.09%.3

STOCKS PUSH HIGHER

Wall Street rallied strongly Friday after President Trump (and the White House) mentioned an upcoming outline for business and individual income tax reform. For the week, the S&P 500 gained 0.81% to 2,316.10; the Nasdaq, 1.19% to 5,734.13; and the Dow, 0.99% to 20,269.37.4,5

THIS WEEK

On Monday, Noble Energy, Rent-A-Center, and Snyder’s-Lance offer earnings news. Tuesday, Federal Reserve chair Janet Yellen begins two days of testifying to Congress on monetary policy; the January PPI also arrives, plus earnings from Agilent Technologies, AIG, Devon Energy, Dr. Pepper Snapple, Express Scripts, Molson Coors, and T-Mobile. Reports on January retail sales and industrial output appear Wednesday, along with the January CPI and earnings announcements from Analog Devices, Applied Materials, Avis Budget Group, CBS, Choice Hotels, Cisco, Denny’s, GoDaddy, Groupon, Hilton Worldwide Holdings, Huntsman, Kraft Heinz, Marathon Oil, Marriott International, NetApp, NetEase, PepsiCo, TiVo, TripAdvisor, and Wyndham Worldwide. Thursday offers fresh data on building permits, housing starts, and initial claims; investors also review earnings from Avon, Boise Cascade, Cabela’s, Dean Foods, DISH Network, Duke Energy, Hyatt, and Waste Management. Bloomin’ Brands, Campbell Soup, Deere, Fluor, J.M. Smucker, and Spectra Energy announce earnings Friday.

Meidell: Market takes cues from Washington

By Published Articles

After reporting on the stock market the past few weeks, I am beginning to get a sense of how our local meteorologist growing up must have felt, having to report the weather in a coastal town in south central California where the local temperature never seemed to change by more than a few degrees. With 310 companies that make up the Standard & Poor’s 500 having reported earnings so far, according to FactSet, earnings are now expected to grow by 5.2 percent year over year, which is well above the 3.2 percent rate that analysts had expected at the end of 2016.

However, even with the recent news of above average earnings, the stock market still appears to be a policy driven market. This means that investors are currently content to take their cues primarily from Washington. This might explain why the stock market appears to be going nowhere lately. Just as the recent tug of war going on between the Trump administration and Washington D.C. lawmakers has had the effect of slowing much of what the new Trump administration has tried to move forward, the stock market appears unable to move forward (upward) as well.

On Tuesday, the S&P 500 eked out a gain of 0.02 percent while the Nasdaq Composite rose 0.19 percent. Though the stock market appears to be in a trance lately, one of the bright spots on Tuesday was the technology sector with the Dow Jones U.S. Technology index up 0.49 percent on the day. However, one concern has been the recent underperformance of small companies. The broad stock market performs best when small companies are in the lead, but that hasn’t been the case lately, with Russell 2000 declining 0.44 percent on Tuesday. When small companies under perform, it typically signifies that there is less money sloshing around in the stock market, and an indication that investors are holding on to their dollars a little tighter.

This week’s top performing sectors are led by the Dow Jones U.S. Technology index up 2.35 percent over the past five trading days, followed by the Dow Jones U.S. Healthcare index higher by 1.44 percent over the same period.

Meidell: Major markets stuck in a time correction?

By Published Articles

Though the major market averages briefly closed at all-time highs during January, those rallies ended almost as quickly as they began, leaving the markets with little upward progress. However, all of this waiting and hoping for the stock market to continue higher might be causing some investors to grow impatient. As of Monday’s close, the Standard and Poor’s 500 hadn’t exceeded a daily range of more than 1 percent for 35 consecutive days, making this the longest run of low volatility of this type going back to 1974, according to Thompson Reuters data.

Some believe that stocks can go through both price corrections and time corrections. A price correction is when stocks move for a period of time in the opposite direction of the primary trend. In other words, if the price has been moving higher for a period of time, it typically declines for a short spell, before resuming its trend and moving higher once again. On the other hand, if price has moved too quickly in one direction, it can appear to stall out, as it trades horizontally for a time before once again resuming its primary trend.

With the major market averages so far stubbornly holding on to their gains, the stock market appears to be in a time correction. The major averages were little changed Monday, with the Standard and Poor’s 500 down 0.21 percent and the Nasdaq Composite slipping 0.06 percent.

As we begin the new month, earning season continues. As of Monday, earnings season is a little over halfway completed, with 279 of the companies that make up the S&P 500 having reported their fourth-quarter earnings.

This past week, Philippine President Rodrigo Duterte ordered the closure of 23 mines for environmental reasons. These mines produce mainly nickel and represent roughly 8 percent of the world’s supply. The silvery metal is used primarily in the production of stainless steel, magnets and coins. As speculators rushed back into the nickel market, this week’s top performing commodities were led by the S&P GSCI Nickle index, up 7.96 percent over the past five trading days, followed by the S&P GSCI Palladium index, higher by 4.86 percent.