Let the Holiday Spending Begin!




Let the Holiday Spending Begin!


First and most importantly, I would like to wish all of you a Very Happy Thanksgiving! Please take the time to tell those you love, you love them!


The day after Thanksgiving is called “Black Friday”, as this used to suggest, this is the time of the year our Retailing Establishments start showing a profit. I’m fairly confident that our retailers this year have already shown very nice and healthy profits.


Only a few years back, many people would rush out on Black Friday to do most of their holiday shopping. Now that we have “Cyber Monday”, many people combine brick and mortar shopping with on-line shopping. Each year, on-line shopping has been increasing its share of total shopping.


So how will this holiday season turn out for retailers? With the unemployment rate at historical lows, consumer confidence still at record levels, I fully expect this to be a very good spending season and should add to corporate profits reporting in January 2019.


Markets Last Week


The major US Stock Indexes were down with the Dow off (2.17%), the S&P500 down (1.56%), the Nasdaq Composite off (2.15%) and the Russell 2000 down (1.37%).


Across the pond shows the MSCI EAFE International Index was down (1.43%), however the MSCI Emerging Market Stock Index bucked the trend, rising 1.05% for the week.


Bonds, as represented by the Barclays Aggregate Bond Index rose .47%, as the 10 Year US Treasury Yield fell from 3.18% to 3.07% from the prior week.


Be Careful What You Ask For?


So, do you want the US and China to quickly solve the trade war? If that happens, my guess the Markets will have a positive reaction (if the deal is good), and consumer confidence will increase further. This could actually pressure the Federal Reserve to be even more aggressive in raising interest rates which is already hurting the housing market. Keep in mind, when the housing market is robust, consumer durable goods orders (goods meant to last over 3 years) increase which is good for the economy. Consumer spending represents 70% of all spending in the United States.


If we do not have a positive end to the trade war, what will that mean? We know that the last round of Tariffs on Chinese goods, to the tune of $200 Billion, is set to increase from 10% to 25% on January 1, 2019. If you’re a US large corporation, next year, you may have a combination of higher costs, both because of tariffs and higher wages. Add in higher corporate borrowing costs and you can see why consumer spending (confidence) will be extremely important. Eventually, higher corporate costs are passed down to the consumer.


Corporate profits and the US economy are predicted to slow down in 2019 after a robust 2018; even so, are still “forecast” to be very positive.


I’ll have much more to say about thoughts of 2019 in the remaining weeks of 2018.




Medicare: Open enrollment will continue until December 7th. You can change your Part D Prescription Drug Plan, change your Medicare Advantage Plan and change from Original Medicare with a Medigap (Supplement) to Medicare Advantage.


Social Security: For those receiving benefits, you will see a 2.8% increase beginning January 2019. If you are delaying your benefits, currently receiving 8% per year in delayed credits, your benefit will actually increase by 10.8% (8% the annual deferred credit + the 2.8% Cost of Living Adjustment)


Tax Planning: As this is the first year of the new tax code, it’s important to review your situation to make sure you are taking full advantage to opportunities. For a listing of our last Retirement Income Planning /Tax workshop of 2018, please click Retirement Income/Tax Planning Workshop.


Question of the Week – (Thanksgiving Dinner)


What is the average amount of calories consumed during Thanksgiving?

a) 3000

b) 3500

c) 4500

d) 2750


Answer to Last Week’s Question of the Week


Thank you to all who have served!


As of year 2014, there were 19.3 million military Veterans in the United States. Of those, how many of our Veterans are female?

a) 1.6 million

b) 1 million

c) 3.5 million

d) 5 million


Answer is –

a) 1.6 million females are Veterans. Thank you for your service!!


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