Your Weekly Summary – May 14, 2018

A Very Good Week in the Markets

 

The S&P 500 Stock Index rose 2.5% last week and now all major US Stock Market averages are positive for 2018. It certainly is interesting that the market has not had a more positive response after 80% of the companies in the S&P500 reported an average Growth Rate of Earnings of 24%. Perhaps the response will be forthcoming.

 

Contributing to the positive week in the Stock Market was lower than expected readings on inflation. The Producer Price and the Consumer Price Indexes increased .1% and .2% respectively; the consensus was expected at .3% for both. Import prices rose .3% and were expected to rise .5%. However, Export prices rose .6% with an expectation of just .3%. Even though inflation data came in tame, it will remain at the top of economic concerns for the foreseeable future.

 

Interest rates on the US 10 Year Treasury ended the week at 2.97%, slightly above the prior week of 2.94%.

 

Oil and Iran

 

Last week, as I’m sure you’re aware; President Trump announced the U.S. pulled out of the Iran Nuclear Deal, which originated in 2015. Trump promised to re-impose sanctions on Iran. This certainly adds to Middle-East uncertainly as Iran pumps approximately 4% of the world’s oil. Oil prices have been rising over the last couple of months in anticipation of the announcement. As of this writing, the price of Oil is approximately $70.81 per barrel. Over this past weekend, I certainly noticed the price difference to fill my gas tank. Higher gas prices, if sustained, can lead to decreased consumer spending in other areas of the economy.

 

The Week Ahead

 

This week features several Federal Reserve Members giving speeches throughout the United States. One of the Federal Reserve’s methods of open communication is through the various speeches given during the year. It will be interesting to hear their intentions this week.

 

On Tuesday we’ll see the Empire (NY State) Manufacturing report. Housing reports this week with The Housing Market Index on Tuesday, followed by Housing Starts on Wednesday. Also on Wednesday is the report for Industrial Production and the business outlook by the Philadelphia Fed on Thursday.

 

Will the Stock Markets continue on gains from last week?

 

We’ll know 4:00pm on Friday!!

 

Question of the Week?

 

What is the name of the Medicare Enrollment Period that applies to people turning age 65, who have health insurance coverage through their employer which employs over 20 employees?

 

a) The General Enrollment Period

b) The Open Enrollment Period

c) The Initial Enrollment Period

d) The Special Enrollment Period

 

Answer to Last Week’s Question of the Week!

 

The question was, “Which of the following is still a valid strategy for claiming your Social Security Retirement Benefit?”

 

a) Life Expectancy Method  b) File and Suspend  c) Restricted Application  d) Earnings Test

 

The correct answer is: c) Restricted Application

 

Restricted Application:

A restricted application is a technique that upon reaching your full retirement age for Social Security Retirement Benefits (66), one files an application to begin receiving their spousal benefit, so their own Retirement Benefit can grow by 8% per year up until age 70. At age 70, the worker then begins claiming their own benefit which will be 32% higher than at age 66. To qualify for a restricted application, one has to be born prior to January 2, 1954. There are other requirements that are beyond this blog.

 

Other Multiple Choice Definitions:

 

Life Expectancy Method: 

There is no such technique titled in this manner.

 

File and Suspend:

File and Suspend was eliminated as a spousal technique in 2016. To qualify you would have had to have turned 66 and been on record as having filed and suspended by April 2016. This was ashame, as many clients have used this technique advantageously.

 

Earnings Test:

Earnings Test is not a strategy, however it is a significant consideration if you are collecting a Social Security Retirement Benefit prior to your Full Retirement Age. For more information on Social Security Strategies and upcoming Social Security Workshops, please CLICK HERE: Social Security Workshop.