Markets Hopeful of Trade Deal!
Stock Markets rose late last week after news broke that trade negotiations are moving along in a positive manner! The results so far, appear to be the US has suspended a tariff increase to 30% from 25% on at least $250 billion in Chinese goods that was to take effect Tuesday, October 15th. No other tariffs are being changed at this time. In addition, China agreed to purchase $40-$50 billion in U.S. agricultural products. The balance of the talks is still unclear and as of this writing, much speculation is being debated.
The markets rose aggressively last Friday on the trade news, which indicates investors still believe there is time to revive the global economy if a solid trade deal is signed and implemented.
Markets for the Week
All Equity boats rose late last week pushing the averages into the positive for the week. The Dow rose .93%, the S&P 500 .66, the Nasdaq Composite .93% and the Russell 2000 .75%.
International equities fared even better as the MSCI EAFE Developed Markets Stock Index rose 2.31% and the Emerging Markets Stock Index up 1.53%
As expected, when money moves to equities, fixed income goes down. For the week the Barclay’s Aggregate Bond Index lost (1.03%). The sharp 1% drop in the bond index suggests investors need to be very careful about the diversity of their fixed income (bond) holdings.
This year so far, it has been advantageous to have longer dated US Treasuries, however if rates reverse course, a different, challenging outcome should be expected.
Corporate Earnings Time Again
This week begins the 3rd quarter corporate earnings report season. It’s no secret, trade issues have held back corporate spending which is leaving corporate profits flat, at best, for the time being. It will be interesting to see the results compared to the 2nd quarter, as 3 more months of tariff costs have been tacked on.
It appears profits will be flat to slightly down for the quarter and if there is a surprise higher, it should be negligible. To me, this is temporarily optimistic as the high level of consumer spending is to credit for offsetting the lack of recent business spending.
At the end of the day, investors care about stock prices. Stock prices are primarily influenced for profit increase expectations. For now, any optimism of a trade deal will fuel confidence that profits will again start to increase. What will happen? As always, Time Will Tell!
Social Security Cost of Living Adjustment (COLA) Announced!
63 Million Retirement Social Security beneficiaries will receive a 1.6% increase in their benefit checks in 2020. The 1.6% is below the historic average of 2.6%. The maximum amount of earnings subject to the Social Security Tax will increase to $137,700.
Figures that impact the earnings test (for those who decide to collect a benefit prior to their Full Retirement Age), have also increased.
For more information on the rules and most advantageous way to consider collecting your Social Security Retirement benefits, CLICK HERE to sign up for our workshop TOMORROW @ the Moorestown Library!
Question of the Week… On Fitness and Gyms
The United States has more Fitness Centers (Gyms) than any other country. The last reported data was for 2017. In 2017, how many Fitness Centers (Gyms) existed in the US?
Answer to last week’s question…!
Two US presidents have been impeached by the House of Representatives however acquitted by the Senate. Which of the following presidents were impeached and acquitted?
- Bill Clinton
- Andrew Johnson
- Richard Nixon
- George H. Bush
- Lyndon Johnson
- Gerald Ford
The correct answers are #1 & #2! Bill Clinton and Andrew Johnson