The Markets – Mid-Term Elections – November to April
On Tuesday the question will be answered. Will the Republicans continue to hold the majority in the Senate and House or will the balance of power shift? History suggests that the Stock Market will do well regardless of the result. Add in the fact that we are now in what is historically the best time for stocks (November thru April), many Investors are certainly hoping for a repeat of the historical trend. As always, time will tell!
Last week was a reversal of the previous couple of weeks as Equities across the globe went higher. For the week, the Dow Jones was up 2.36%, the S&P500 rose 2.44%. The Nasdaq composite was up 2.7% and the small cap Russell 2000 rose 4.35%.
Not to be out done, over the pond the International Markets also rose, exceeding the US. The MSCI EAFE International Index rose 3.36% and the MSCI Emerging Market Stock Index rose 6.09%.
US Government Bonds took it on the chin as the 10-year US Treasury yield closed last Friday @ 3.21%, up from a close of 3.08% the prior week. The Barclays Aggregate Bond Index was down (.73%) for the week.
Last Friday’s employment report showed the US added 250,000 jobs in October. The part of the report that may have contributed to the 10-year jump last week, was Wages that rose 3.1%, the highest in 10 years which may keep the Federal Reserve on close interest rate watch. It will certainly be interesting to see how many additional workers will be added for the upcoming holiday season.
Home in Retirement: A survey of 1,025 retirees indicated that only 46% of retirees own their own home free and clear of any debt. 54% still have a mortgage. (Source: SOA 2017 Risks and Process of Retirement Survey)
US Treasury Securities: $15.27 trillion is the value of all outstanding US Treasury debt as of 9/30/2018. That is a WOW!!
US Deficits: Over the last 10 years (2009-2018) our aggregate budget deficits totaled $8.7 trillion. Aggregate budget deficits over the 80 fiscal years from 1929 to 2008 were $5.3 trillion. Another WOW!
Health Care Spending: The top 1% of American ranked by their dollar use of health care represents 22.8% of total health care expenditures (source: Agency for Healthcare Research and Quality, November 2016 study)
Question of the Week
The interest cost on US Debt is forecast to rise in 2023 to $619 Billion. In Fiscal Year 2018, the interest cost is the 5th largest Federal expenditure behind Social Security, Military spending, Medicare and Medicaid.
What is the interest cost taxpayers paid in fiscal year 2018 (October 1, 2017 through September 30, 2018)?
a) $135 Billion
b) $310 Billion
c) $250 Billion
d) $432 Billion
Answer to Last Week’s Question of the Week
What Adult Halloween costume has been the most popular over the last couple years?
a) Super hero
The answer is –