Monthly Economic Update for January, 2019

In this month’s recap: equity and commodity markets experience major losses, the Fed sends a hawkish message, home sales improve, and the economy maintains its momentum.

Monthly Economic Update

 

Presented by JB Beckett, January 2019

 

THE MONTH IN BRIEF

December 2018 will be remembered for its volatility and its challenges. The S&P 500 flirted with bear market territory, dropping 10.16% for the month. Appetite for risk declined here and abroad in the face of tariffs, concerns about the Federal Reserve raising interest rates too quickly, a federal government shutdown, and questions about the Brexit. It was also a difficult month for commodities. In contrast, Main Street seemed in good shape: low unemployment, high consumer confidence, and strong consumer spending were all evident.

1

 

 

DOMESTIC ECONOMIC HEALTH

While the Federal Reserve certainly pays attention to Wall Street’s mood, it adjusts its monetary policy in respect to the economy, not the preferences of market participants. In December, the central bank did not exactly tell investors what they wanted to hear. Following the announcement of another quarter-point rate hike (the target range is now 2.25-2.5%), Fed chair Jerome Powell stated that monetary policy “does not need to be accommodative,” and affirmed that the Fed would continue to remove up to $50 billion per month of Treasury and mortgage-backed securities from its balance sheet. According to the latest Fed dot-plot, there would be no pause in tightening: two rate hikes were still envisioned for 2019. Major indices fell sharply after Powell’s remarks.

2

To justify its stance, the Fed could point to a number of economic indicators. The manufacturing and service sectors were seeing considerable expansion, by the look of the Institute for Supply Management’s November purchasing manager indices. ISM’s non-manufacturing PMI rose 0.4 points to 60.7, and its factory PMI climbed 1.6 points to 59.3; these were great readings. (Additionally, the Federal Reserve said that industrial production rose 0.6% in November.) Department of Commerce data showed personal spending up 0.4% in October and retail sales advancing a decent 0.2%. Consumer confidence remained high. The University of Michigan’s index finished December at 98.3, higher than its final November mark of 97.5. The Conference Board’s monthly gauge came in at 128.1 – notably below its (revised) November reading of 136.4, but still at an impressive level.

3,4

The Consumer Price Index was flat in November. The main reason? Cheaper fuel. Gasoline prices dropped 4.2%. Annualized inflation weakened to 2.2%, the smallest advance seen since February. Wholesale inflation, as measured by the Producer Price Index, ticked north 0.1%; in October, the gain was 0.6%. 

4,5

Job creation did fall short of expectations in the eleventh month of the year. Employers added 155,000 net new workers to their payrolls in November, the Department of Labor stated, and the October increase was revised down to 237,000. A Bloomberg survey of analysts projected a November jobs gain of 198,000. Headline unemployment stayed remarkably low, just 3.7%; the U-6 rate, which also counts the underemployed, rose 0.2% to 7.6%. Annualized wage growth remained at 3.1%. Average net monthly payroll growth for the September-November period was 170,000.

4,6

By December, the ongoing U.S.-China trade dispute had cooled a bit, with negotiations continuing. December 1 marked the start of a 90-day “ceasefire,” with both nations agreeing not to impose additional import taxes until late in the first quarter of 2019. China actually scaled back some tariffs as the year ended; the U.S. was set to boost tariffs on as much as $200 billion of Chinese goods effective this month.

7

Lastly, the end of 2018 was very good for retailers. Mastercard Pulse measured a 5.1% year-over-year increase in retail purchases between November 1 and December 24, resulting more than $850 billion in purchases – the best holiday retail sales season in six years.

8

 

GLOBAL ECONOMIC HEALTH

In December, the United Kingdom witnessed a parliamentary deadlock over the Brexit, with Prime Minister Theresa May withdrawing a scheduled vote over her deal with the European Union in the face of probable legislative defeat. In fact, as Christmas approached, there was no clear majority in Parliament favoring any of the Brexit options: May’s deal, the no-deal Brexit (an outcome that would dismay corporations), a “managed” no-deal, or another national vote on the matter. The U.K.’s March 29 deadline to leave the E.U. remains. In other euro area news, yearly inflation fell sharply in the region to 1.9% in November, descending from 2.2% in October.

9,10

While China’s statistics bureau said recently that the country was on track to reach its 6.5% economic growth target for 2018, signs of a slowdown emerged. In December, the country’s factory output contracted for the first time in nearly three years, with its official manufacturing PMI falling to 49.4. The November Markit manufacturing PMIs for other key Asian economies indicated either minor month-over-month factory sector expansion (slightly above 50) or contraction (below 50). Japan’s Markit PMI came in at 51.8 (though it recovered to 52.4 in December); Taiwan’s, at 48.4; South Korea’s, at 48.6.

11,12

 

WORLD MARKETS

Yes, December brought substantial losses for other major equity benchmarks – though generally speaking, the losses were smaller than the ones seen in the U.S. While the Nikkei 225 slid 10.10% last month, the common December loss was single-digit: 5.76% for the TSX Composite, 1.53% for the Bovespa, only 0.22% for the Bolsa, 6.55% for the DAX, 5.46% for the CAC-40, 3.61% for the FTSE 100, 5.92% for the IBEX 35, 2.49% for the Hang Seng, 4.14% for the Shanghai Composite, and just a respective 0.35% and 0.13% for the Sensex and the Nifty 50.

13

  

 

How about some of the regional and multinational indices? Well, the MSCI World slipped 7.71%, while the MSCI Emerging Markets declined 2.92%. The FTSE Eurofirst 300 took a 5.44% loss. On a positive note, two emerging market benchmarks saw double-digit gains in 2018: Russia’s Micex advanced 12.16%; Brazil’s Bovespa, 15.03%.

13,14

 

 

COMMODITIES MARKETS

Dollar strength put pressure on this sector in 2018; the U.S. Dollar Index gained 4.64% for the year, a performance better than that of many commodities. Gold and silver moved up in December. The yellow metal gained 5.11% to reach $1,284.50 on the COMEX on New Year’s Eve. Silver rose 9.90% for the month to $15.54 on the COMEX. Across 2018, gold lost 2.42%; silver, 9.14%. Copper retreated 5.17% last month, and platinum settled 1.29% lower.

15,16

 

 

Oil prices kept falling. In December, WTI crude declined 9.64% to finish out the year at $45.83 on the NYMEX. For all of 2018, crude retreated 24.05%. Unleaded gasoline suffered a 7.45% December setback. Heating oil fell 7.83%. All of that paled next to natural gas, which plunged 36.01%. Most key crops also went negative on the month: soybeans lost 1.26%; wheat, 2.42%; coffee, 2.88%; sugar, 3.50%; cotton, 8.52%. Cocoa and corn were notable exceptions, the former advancing 11.85%, and the latter, 2.46%.

16

 

REAL ESTATE

More homes sold in November – more existing homes, that is. The National Association of Realtors said that resales improved 1.9% in the penultimate month of the year, and that followed the 1.4% gain seen in October. The trend might not continue, though, as NAR’s pending home sales index retreated 0.7% in November. (Due to the federal government shutdown, the Census Bureau’s November new home sales report was still pending at this writing.) Housing starts and building permits were both up for November: groundbreaking increased 3.2%, and the pace of permits issued improved 5.0%.

4

Home loans grew cheaper in December. Back on November 29, Freddie Mac’s Primary Mortgage Market Survey listed the mean interest rates on the following loans: 

30-year FRM, 4.81%; 15-year FRM, 4.25%; 5/1-year ARM, 4.12%.

By the December 27 Freddie Mac survey, everything was cheaper: 30-year FRM, 4.55%; 15-year FRM, 4.01%; 5/1-year ARM, 4.00%.

17

The NAR reported a median existing home sale price of $257,700 in November, up 4.2% from November 2017. Another key measure of annualized gains, the 20-city composite S&P CoreLogic Case-Shiller home price index, had risen 5.0% year-over-year through October.

18,19

 

 

T I P   O F   T H E   M O N T H

 

If you have a high-interest credit card, you may want to search to see if you can

refinance the balance

to a

lower-interest card

. A lower-interest card means a greater percentage of your payments will be applied to principal rather than interest.

 

 

LOOKING BACK, LOOKING FORWARD

During one of the most volatile months in recent Wall Street history, the S&P 500 had nine intraday moves of at least 1% (as opposed to eight such instances during all of 2017), and the Dow Jones Industrial Average gained 1,000 points in a day for the first time. The ups and downs tested the patience of investors large and small. When the month ended, the most esteemed Wall Street indices were considerably lower. The S&P 500 ended the year at 2,506.85; the Dow, at 23,327.46; the Nasdaq Composite, at 6,635.28. The small-cap Russell 2000 wrapped up 2018 at 1,348.56, taking a 12.94% December fall and losing 12.18% for the year. The CBOE VIX soared 54.62% for the month and 130.25% for 2018, settling at 25.42 on December 31.

1,20

MARKET INDEX

Y-T-D CHANGE

1-MO CHANGE

2017

DJIA

-5.63

-9.68

25.08

NASDAQ

-3.88

-10.83

28.24

S&P 500

-6.24

-10.16

19.42

 

 

 

 

YIELD

12/31 RATE

1 MO AGO

1 YR AGO

10 YR TIPS

2.69

3.01

2.40

 

Sources: wsj.com, bigcharts.com, treasury.gov – 12/31/18

1,21,22

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

At this moment, investors old and young are looking at their portfolios and wondering what moves might be appropriate. How about no moves at all? At its core, a saving and investment strategy for a pre-retiree is developed based on risk tolerance, time horizon, and goals, and that big-picture approach takes episodes of market instability (and market downturns) into account. A deviation from that strategy may be ill-advised. If you are wondering about the outlook for Wall Street for 2019, many prognostications are bullish, some to remarkable degree.

USA TODAY

recently polled a range of Wall Street investment strategists, and they thought the S&P 500 would gain about 25% this year, on average. Is this just wishful thinking, drenched in blue sky? Anything is possible, but to encourage returns like that, it might help to have a pause in tightening by the Fed, an end to the trade war between China and the U.S., a comeback for oil, and earnings calls that contradict worries about corporations becoming slightly less profitable. January will likely see more of the volatility witnessed in December, hopefully less pronounced. This month and this year, investors will appreciate the core principle of diversification, for little is certain about the next few months on Wall Street.

23

 

 

Q U O T E   O F   T H E   M O N T H

 

Make

your life a

mission

 – not an intermission.”

ARNOLD GLASOW

 

 

UPCOMING RELEASES

January’s roll call of major economic news items includes the December employment report from the Department of Labor (1/4), ISM’s December non-manufacturing PMI (1/7), a new Consumer Price Index (1/10), the latest Producer Price Index (1/15), December retail sales and a new Federal Reserve Beige Book (1/16), December housing starts and building permits (1/17), December industrial output and the preliminary January University of Michigan consumer sentiment index (1/18), the latest existing home sales report from the National Association of Realtors (1/22), a fresh Conference Board leading indicators index (1/24), December new home sales and durable goods orders (1/25), the latest Conference Board consumer confidence index and the November S&P CoreLogic Case-Shiller home price index (1/29), a Federal Reserve policy decision, ADP’s January payrolls data, and NAR’s index of housing contract activity for December (1/30), and finally, the December PCE price index and consumer spending report (1/31).

 

 

T H E  M O N T H L Y   R I D D L E

 

You can see right through me. Different lights make me strange, and for each one, my size may change. What am I?

 

LAST MONTH’S RIDDLE: It is often surrounded by water and at risk from waves, and it has a fin rather than a sail or motor, but without water and waves, there would be no real use for it. What is it?

ANSWER: A surfboard

.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index

®

(VIX

®

) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx

®

, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The DAX 30 is a Blue-Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market

capitalization. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets.  The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The MICEX 10 Index is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market

environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – markets.wsj.com/us [12/31/18]

2 – reuters.com/article/us-usa-fed/fed-lifts-rates-now-sees-some-further-hikes-ahead-idUSKBN1OI0DV [12/19/18]

3 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1 [12/6/18]

4 – investing.com/economic-calendar/ [12/27/18]

 

5 – streetinsider.com/Economic+Data/U.S.+consumer+prices+flat%3B+underlying+inflation+firm/14915363.html [12/26/18]

6 – bloomberg.com/news/articles/2018-12-07/u-s-payrolls-rise-below-forecast-155-000-as-wage-gain-misses [12/7/18]

7 – scmp.com/news/china/diplomacy/article/2179505/us-china-trade-war-timeline-first-tariffs-90-day-truce [12/26/18]

8 – cbsnews.com/news/2018-holiday-sales-soar-to-6-year-high/ [12/20/18]

9 – nasdaq.com/article/british-ministers-split-over-next-brexit-steps-if-pms-deal-fails-20181220-00145 [12/20/18]

10 – ec.europa.eu/eurostat [12/17/18]

11 – cnbc.com/2018/12/31/china-december-pmi-manufacturing-activity-contracts-more-than-expected.html [12/31/18]

12 – forbes.com/sites/davidvolodzko/2018/12/21/asias-manufacturing-decline-is-the-wake-up-call-it-needs [12/21/18]

13 – markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [12/31/18]

14 – msci.com/end-of-day-data-search [12/31/18]

15 – marketwatch.com/investing/index/dxy/historical [12/31/18]

16 – money.cnn.com/data/commodities/ [12/31/18]

17 – freddiemac.com/pmms/archive.html [12/27/18]

18 – cleveland.com/business/2018/12/ohio-us-home-sales-down-in-november-from-last-years-levels.html [12/19/18]

19 – zillow.com/research/october-case-shiller-home-prices-22533/ [12/26/18]

20 – cnn.com/2018/12/28/investing/stock-market-december-volatility/index.html [12/28/18]

21 – markets.wsj.com/us [12/29/17]

  

22 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [12/26/18]

23 – tinyurl.com/y94rpn9x [12/24/18] 

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Weekly Economic Update for December 31, 2018

In this week’s recap: A look back at 2018.

Weekly Economic Update

 

Presented by JB Beckett, December 31, 2018

 

Year-End Special Edition: A Look Back at 2018

The close of the year provides an opportunity for investors to step back and consider the wider financial landscape. This week, we’re reviewing some key issues that defined 2018, as well as some factors that may influence financial markets in the coming year.

 

Year in Review

Wall Street began 2018 in rally mode, as enthusiasm for the 2017 Tax Cuts and Jobs Act spilled over into the New Year. Strong economic news encouraged investors, who put aside fears that rising inflation may lead to higher interest rates. What Wall Street did not see coming were the spring and summer trade disputes with China, Canada, Mexico, and the European Union. Fear of a global economic slowdown contributed to a sharp decline in stock prices in October. U.S. economic growth forecasts were tempered in November for 2019, with bulls and bears engaged in a fierce tug-of-war as the year came to a close.

1

 

Economic Growth

After expanding at a middling 2.2% pace in the first quarter, the Gross Domestic Product (GDP) rose 4.2% in Q2 and 3.5% in Q3. The Federal Reserve Bank of Atlanta forecast a 2.8% increase for Q4, which will be released on January 30, 2019 by the Bureau of Economic Analysis. The Congressional Budget Office expects GDP growth in 2019 to slow to 2.4% “as growth in business investment and government purchases slows.”

2,3,4,5

 

Interest Rates

At the close of its September 2018 meeting, the Federal Reserve raised the federal funds rate to 2.25%, a full percentage point higher than it was a year earlier. Federal Reserve Chair Jerome Powell appeared to change his stance on monetary policy, saying interest rates were “just below” a neutral level. Prior to that, he indicated rates were a “long way” from neutral.

6

Consumer Prices and Wage Growth

The number of future interest rate hikes by the Fed may largely depend on its reading of inflation. An uptick in consumer prices or an increase in wage growth may prompt the Fed to consider additional hikes in 2019.

6

Trade Talk Progress

Tariffs were a highlight of 2018 news. On July 10, the Trump administration announced a list of tariffs on $200 billion in Chinese goods. The escalating trade dispute between the U.S. and China is an enormous overhang on the financial markets. The continuing impasse may affect economic growth and push consumer prices higher.

7

2018 also was a year in which a major trade pact started to come together. The United States-Mexico-Canada Agreement (USMCA) was approved in principle in October. However, the agreement must be approved by Congress and the legislative bodies of Mexico and Canada before it can take effect.

8

U.S. Dollar

Rising interest rates and robust domestic growth in 2018 lead to a strengthening of the U.S. dollar. A strong U.S. dollar may negatively affect profits of U.S.-based multinational companies, since it may make their products more expensive to overseas buyers. This will also be something to watch in the coming year.

1,2,3

Real Estate

The trend of higher interest rates in 2018 was also felt in the real estate market. The average rate on a 30-year conventional home loan stood at 3.95% in January 2018. At year’s end, it was hovering near 5% according to Freddie Mac.

We hope you enjoyed this special edition newsletter! Next week, we’ll be back to covering the market numbers. Best wishes to you for a prosperous New Year

.

 

T H E   W E E K L Y   R I D D L E

 

The Weekly Riddle returns next week.

LAST WEEK’S RIDDLE: It is known for its aggressive styling and performance, yet its name contains the name of a gentle mammal. What make of car is it?

ANSWER: Lamborghini.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.  Investing involves risks, and investment decisions should be based on your own goals, time horizon and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize and are subject to revision without notice.

CITATIONS:

1 – cnbc.com/2018/11/20/jp-morgan-sees-a-slowdown-coming-with-economy-growing-at-less-than-2-percent-in-2019.html [11/20/18]

2 – tradingeconomics.com/united-states/gdp-growth [11/6/18]

3 – frbatlanta.org/cqer/research/gdpnow.aspx [12/3/18]

4 – bea.gov/news/schedule [2018]

5 – cnbc.com/2018/08/14/us-economy-seen-strong-in-2018-to-slow-in-2019-cbo.html [8/14/18]

6 – marketwatch.com/story/seemingly-dovish-powell-says-interest-rates-are-just-below-level-where-they-wont-stimulate-economy-2018-11-28 [11/28/18]

7 – cnbc.com/2018/07/10/white-house-releases-list-of-goods-hit-by-200-billion-in-tariffs.html [7/10/18]

8 – businessinsider.com/us-canada-mexico-trade-deal-usmca-nafta-congress-vote-block-2018-10 [10/2/18]

9 – freddiemac.com/pmms/archive.html [11/7/18]

 

 

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Weekly Economic Update for December 24, 2018

In this week’s recap: the Fed disappoints the markets, more homes move, consumer spending and sentiment look solid, and oil falls.

Weekly Economic Update

 

Presented by JB Beckett, December 24, 2018

 

FED FAILS TO CALM WALL STREET

Federal Reserve policymakers voted unanimously last week to raise the benchmark interest rate by another 0.25%, putting the main overnight lending rate in the 2.25-2.50% range. Investors hoped for a hint of a pause in the Fed’s tightening plans, yet no such signal emerged. The central bank’s latest dot-plot showed a consensus projection of two hikes rather than three next year, but at the press conference following the rate move, Fed chairman Jerome Powell commented that monetary policy “does not need to be accommodative,” and noted that the Fed would continue to thin its balance sheet by up to $50 billion per month. Stocks dropped significantly in the wake of those statements. During an abysmal week for equities, the Dow Industrials fell 6.87% to 22,445.37; the Nasdaq Composite, 8.36% to 6,332.99; the S&P 500, 7.05% to 2,416.62.

1,2

     

LATEST KEY HOUSING INDICATORS LOOK BETTER

The National Association of Realtors just reported a 1.9% gain for existing home sales in November; that follows a 1.4% October increase. In addition, builders started more projects last month. The Census Bureau said that groundbreaking improved 3.2% in November as the pace of building permits picked up 5.0%.

3

    

ON MAIN STREET, THE DATA IS GOOD

Households boosted their spending by 0.4% in November, according to the Department of Commerce; October’s gain was revised to 0.8%. The final December University of Michigan consumer sentiment index (released Friday) showed a reading of 98.3, which was 0.8 points higher than its preliminary mark for the month. Analysts polled by MarketWatch had projected a final December reading of 97.2.

3,4

    

OIL SETTLES UNDER $46

WTI crude also had a tough time last week. Futures settled down at $45.59 on the NYMEX Friday. Oil fell 11% week-over-week, a slide aided by a Baker Hughes report showing a jump in the number of active rigs.

5

     

 

T I P   O F   T H E   W E E K

 

If you receive an

email

about your taxes from the

Internal Revenue Service

, chances are it is

fake

. As a rule, the I.R.S. does not initially contact people about tax issues over the Internet.

 

 

THIS WEEK

U.S. stock and bond markets wrap up their trading sessions early on Monday, with no significant economic news scheduled. | Tuesday, all U.S. financial markets are closed for the Christmas Day holiday. | The October S&P CoreLogic Case-Shiller Home Price Index appears on Wednesday. | Thursday brings the Conference Board’s December consumer confidence index, the November new home sales snapshot from the Census Bureau, and a new initial jobless claims report from the Department of Labor. | The National Association of Realtors presents its November pending home sales index on Friday.

 

 

Q U O T E  O F  T H E  W E E K

 

“You can’t help someone

get up a hill

without getting

closer to the top

yourself.”

Norman Schwarzkopf

 

MARKET INDEX

Y-T-D CHG

1-MO CHG

1-YR CHG

DJIA

-9.20

-7.58

-9.42

NASDAQ

-8.26

-8.73

-9.08

S&P 500

-9.61

-8.20

-9.98

 

 

 

 

REAL YIELD

12/21 RATE

1 MO AGO

1 YR AGO

10 YR TIPS

1.02

1.09

0.55

 

Sources: wsj.com, bigcharts.com, treasury.gov – 12/21/18

2,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

It is known for its

aggressive

styling and performance, yet its name contains the name of a

gentle

mammal. What

make

of

car

is it

?

 

LAST WEEK’S RIDDLE: Dave says that the small city he lives in has a municipal building with more than a hundred stories. What building is this?

ANSWER: The library.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – reuters.com/article/us-usa-fed/fed-lifts-rates-now-sees-some-further-hikes-ahead-idUSKBN1OI0DV [12/19/18]

2 – markets.wsj.com/ [12/21/18]

3 – investing.com/economic-calendar/ [12/21/18]

4 – marketwatch.com/story/consumer-sentiment-index-rises-to-983-2018-12-21-1091226 [12/21/18]

5 – marketwatch.com/story/us-oil-futures-settle-at-lowest-since-july-2017-down-over-11-for-the-week-2018-12-21 [12/21/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F21%2F17&x=0&y=0 [12/21/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F21%2F17&x=0&y=0 [12/21/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F21%2F17&x=0&y=0 [12/21/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/21/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/21/18]

  

 

 

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Weekly Economic Update for December 17, 2018

In this week’s recap: inflation moderates, oil prices head south, and equities have a tough week.

Weekly Economic Update

 

Presented by JB Beckett, December 17, 2018

 

As FUEL GROWS CHEAPER, INFLATION BECOMES TAMER

Last week, the latest Consumer Price Index arrived, showing no move for headline inflation in November and a 0.2% core inflation increase. That precisely matched the consensus forecast of economists polled by Reuters. What held the headline CPI in check last month? You can credit a sudden drop in gas prices, which fell 4.2%. Annualized inflation declined to 2.2%. Overall producer prices only rose 0.1% last month, compared to an October ascent of 0.6%.

1,2

     

A MIDDLING ADVANCE FOR RETAIL SALES 

During October, American households boosted their retail spending by 1.1% (originally reported by the Department of Commerce as a gain of 0.8%), but November presented a different story. Sales rose last month, but only by 0.2%. The gain remained at 0.2% with auto buying removed.

2

    

OIL HEADS 2.6% LOWER

That was the weekly loss for light sweet crude, influenced by two factors: increasing dollar strength and concerning economic data from China, which made traders wonder if the P.R.C.’s demand for crude could lessen. Oil settled at $51.20 Friday on the NYMEX.

3

    

STOCKS HEAD LOWER

Bothered by anxieties about global growth, bulls lost some of their appetite for risk last week. Across five trading days, the S&P 500 ceded 1.26%; the Dow Jones Industrial Average, 1.18%; the Nasdaq Composite, 0.84%. That left them at the following settlements on Friday: S&P, 2,599.95; DJIA, 24,100.51; COMP, 6,910.66. The small-cap Russell 2000 index had it worse, falling 2.57% to 1,410.81 over five days. While all this happened, volatility actually declined, at least according to the CBOE VIX; the leading gauge of Wall Street instability retreated 6.89% for the week to 21.63.

4

     

 

T I P   O F   T H E   W E E K

 

A simple tip to keep

credit card

 

spending

under control: only use a card for purchases you know you can pay off within

one month

.

 

 

THIS WEEK

Oracle and Red Hat share quarterly results on Monday. | On Tuesday, the Census Bureau offers a snapshot of November residential construction activity, and Darden Restaurants, FedEx, Jabil, Micron Technology, Navistar, Steelcase, and Worthington Industries present earnings. | Wednesday, the Federal Reserve releases its latest policy statement, followed by a press conference with Fed chair Jerome Powell; in addition, investors will consider October existing home sales numbers and earnings from General Mills, Paychex, Rite Aid, and Winnebago. | On Thursday, earnings roll in from Accenture, BlackBerry, Conagra Brands, Nike, and Walgreens Boots Alliance, and the Department of Labor issues a new initial claims report. | Friday, Wall Street reviews November consumer spending and capital goods orders data, the federal government’s third estimate of Q3 growth, and earnings from CarMax.

 

 

Q U O T E  O F  T H E  W E E K

 

Laughter

is an instant vacation.”

MILTON BERLE

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-2.50

-1.67

10.59

18.14

NASDAQ

0.11

0.79

14.54

35.82

S&P 500

-2.76

-1.96

9.29

19.93

 

 

 

 

 

REAL YIELD

12/14 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.07

0.48

0.72

2.43

 

Sources: wsj.com, bigcharts.com, treasury.gov – 12/14/18

4,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

Dave says that the small city he lives in has a municipal building with more than a hundred stories

. What building is this?

 

LAST WEEK’S RIDDLE: Take a word with four letters. Take away one, and what remains will be better … better than zero, anyway. What word is this?

ANSWER: Gone.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – cnbc.com/2018/12/12/us-consumer-price-index-november-2018.html [12/12/18]

2 – briefing.com/investor/calendars/economic/2018/12/10-14 [12/14/18]

3 – marketwatch.com/story/oil-falls-as-stock-weakness-and-dollar-strength-dull-impact-of-bullish-supply-data-2018-12-14 [12/14/18]

4 – markets.wsj.com/ [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/14/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/14/18]

    

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Your Year-End Financial Checklist

Beckett Financial Group      825 Meeting Street, West Columbia, SC 29169      BeckettFinancialGroup.com

(803) 939-4848

JB Beckett

JB@BeckettFinancialGroup.com

Your Year-End Financial Checklist

Seven aspects of your financial life to review as the year draws to a close. 

 

Provided by JB Beckett

 

The end of a year makes us think about last-minute things we need to address and good habits we want to start keeping. To that end, here are seven aspects of your financial life to think about as this year leads into the next…

    

Your investments. 

Review your approach to investing and make sure it suits your objectives. Look over your portfolio positions and revisit your asset allocation.

   

Your retirement planning strategy.

Does it seem as practical as it did a few years ago? Are you able to max out contributions to IRAs and workplace retirement plans like 401(k)s? Is it time to make catch-up contributions? Finally, consider Roth IRA conversion scenarios, and whether the potential tax-free retirement distributions tomorrow seem worth the taxes you may incur today. If you are at the age when a Required Minimum Distribution (RMD) is required from your traditional IRA(s), be sure to take your RMD by December 31. If you don’t, the IRS will assess a penalty of 50% of the RMD amount on top of the taxes you will already pay on that income. (While you can postpone your very first IRA RMD until April 1, 2019, that forces you into taking two RMDs next year, which positions you to face greater income tax.)

1

   

Your tax situation.

How many potential credits and/or deductions can you and your tax professional find before the year ends? Examine accelerated depreciation, R&D credits, the Work Opportunity Tax Credit, incentive stock options and certain types of tax-advantaged investments. Your odds of owing Alternative Minimum Tax (AMT) may be reduced in 2018 thanks to the Tax Cuts & Jobs Act. If you do owe AMT during 2018-25, you probably will have to pay less of it (possibly much less) than you would if the TCJA had not been passed.

2

 

 

Review any sales of appreciated property and both realized and unrealized losses and gains. Look back at last year’s loss carry-forwards. If you’ve sold securities, gather up cost-basis information. Look for any transactions that could potentially enhance your circumstances.

 

Your charitable gifting goals.

Plan charitable contributions or contributions to education accounts; make any desired cash gifts to family members. The annual federal gift tax exclusion is $15,000 per individual for 2018, meaning you can gift as much as $15,000 to as many individuals as you like this year tax-free. (The limit will stay at $15,000 in 2019.) Married spouses can each make $15,000 gifts. So long as these gifts are within the annual exclusion amount (that is, $15,000 or less), they do not count against the lifetime estate tax exemption amount, which is $11.4 million per individual (and $22.8 million per married couple) in 2019.

3

 

 

You could also gift appreciated securities to a charity. If you have owned them for more than a year, you can deduct 100% of their fair market value and legally avoid capital gains tax you would normally incur from selling them.

4

 

Besides outright gifts, you can explore creating and funding trusts on behalf of your family. The end of the year is also a good time to review any trusts you have in place.

 

 

Your life insurance coverage.

Are your policies and beneficiaries up-to-date? Review premium costs and beneficiaries and think about whether your insurance needs have changed.

 

Life events. 

Did you happen to get married or divorced in 2018?

 

Did you move or change jobs?

 

Buy a home or business? Did you lose a family member, or see a severe illness or ailment affect a loved one? Did you reach the point at which Mom or Dad needed assisted living? Was there a new addition to your family this year? Did you receive an inheritance or a gift? All these circumstances can have a financial impact on your life, and even the way you invest and plan for retirement and wind down your career or business. They are worth discussing with the financial or tax professional you know and trust. 

 

Lastly, did you reach any of these financially important ages in 2018?

If so, act accordingly.

 

 

Did you turn 70½ this year?

If so, you must now take Required Minimum Distributions (RMDs) from your IRA(s).

Did you turn 65 this year?

If so, you are likely now eligible to apply for Medicare.

Did you turn 62 this year?

If so, you can choose to apply for Social Security benefits.

Did you turn 59½ this year?

If so, you may take IRA distributions without a 10% early withdrawal tax penalty.

Did you turn 55 this year?

If so, you may be allowed to take distributions from your 401(k) without penalty, provided you “separate from service” from your employer (i.e., no longer work at that job).

Did you turn 50 this year?

If so, you can make “catch-up” contributions to IRAs (and certain other qualified retirement plans).

1,5,6

 

The end of the year is a key time to review your financial “health” and well-being.

If you feel you need to address any of the items above, please feel free to email me or give me a call.

 

                 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com.

BeckettFinancialGroup.com

   

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 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.

 

 

Citations.

1 – kiplinger.com/tool/retirement/T045-S001-when-do-i-have-to-take-my-first-rmd/index.php [7/18]

2 – marketwatch.com/story/meet-the-new-friendlier-alternative-minimum-tax-2018-02-26 [2/26/18]

3 – forbes.com/sites/ashleaebeling/2018/11/15/irs-announces-higher-2019-estate-and-gift-tax-limits/ [11/15/18]

4 – kiplinger.com/article/retirement/T055-C000-S004-smart-strategies-for-giving-to-charity.html [9/26/18]

5 – fool.com/retirement/2018/02/12/5-financial-facts-every-early-retiree-should-know.aspx [2/12/18]

6 – irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions [11/5/18]

 

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Retirement In Sight for December, 2018

Beckett Financial Group      825 Meeting Street, West Columbia, SC 29169      BeckettFinancialGroup.com

(803) 939-4848

JB Beckett

JB@BeckettFinancialGroup.com

Monthly News and Information for Current and Future Retirees

Presented by JB Beckett – DECEMBER 2018

QUOTE OF THE MONTH

 

“It is wonderful what we can do if we are always doing.”

George Washington

CAN YOU PSYCH YOURSELF UP TO SAVE MORE?

You have probably spent decades saving for retirement, and you might have a decade or more of saving to go before you actually retire. At times, your resolve may be tested. The stock market may falter; household money pressures may mount; new near-term priorities may arise. What can you do to stay on point and stick with this financial commitment you have made to your future self? 

First, keep picturing the future you want. Envision the dreams and goals you want to accomplish. If you want to retire to a certain place, spend a day or a weekend there. If you imagine yourself enjoying a particular hobby or pursuit, try out that pastime today. This could reinforce the importance of retirement saving at a time when distractions threaten. Second, if you are tempted to spend more and save less after a raise or promotion, think about the opportunity cost of that choice. A $100 or $500 expenditure on some consumer good poised to depreciate is not an investment in your future, but $100 or $500 invested in equities or fixed-income vehicles could result in further progress toward your savings objective. Third, automate your saving and investing, if that is not already the case, so you never have to think about it. You can do this with an IRA, not just a workplace retirement plan. Some workplace plans offer you the option of gradually increasing your contribution rate. So, instead of merely saving for something hazy called “retirement,” save for the dreams that inspire you.

1

Health Tip

Scrub your hands when you wash them

Some people wash their hands more thoroughly than others, and thorough is good. Start by wetting your hands, then apply enough soap to get a good lather going. Then, vigorously scrub your hands, your fingernails, and between your fingers for 15-20 seconds. This scrubbing is what removes the bulk of the germs and viruses, not to mention oil and dirt.

NEW INGREDIENTS ENHANCE CULINARY TOURS

If some of your fondest travel memories center on the cuisine you have savored abroad, you may be intrigued to know how culinary vacations are taking on a whole new flavor. The new trend is toward a deep food experience: exploring the origin and culture giving birth to the food, not merely the food alone.

These trips strive to provide a memorable balance of activities, culture, and cuisine. You might ride a conventional or electric bike from one prime foodie destination to the next in Italy or Spain, fish for salmon and gather edible herbs in Alaska or the Yukon, or go clamming and cook on wild rhubarb-covered rocks in Patagonia. Obviously, trips of this sort are not cheap (think $5,000-$10,000 for two weeks, not including airfare), but they can provide a profoundly immersive experience and lifelong memories. In some areas, you can even add this kind of encounter to a vacation yourself: travel services like NOSHtrekker in Singapore help travelers dine at the homes of locals who share their interest in art, history, and other disciplines.

2

DID YOU KNOW?

 

Famous fast words

Some celebrated novels and novellas have been written with astonishing speed. Irish author John Boyne wrote the first draft of

The Boy in the Striped Pyjamas

in 60 hours. Fyodor Dostoyevsky wrote

The Gambler

in 26 days. Jack Kerouac wrote

On the Road

in three weeks.

3,4

ON THE

BRIGHT SIDE

Participants in employee stock ownership plans (ESOPs) have an average balance of $170,326 by the estimate of the National Center for Employee Ownership, which is more than twice the mean savings that workers have amassed in other kinds of employer-sponsored retirement plans. There are about 6,700 ESOPs nationwide.

5

BRAIN TEASER

 

Sharks have skeletons, yet they don’t have bones. How is this possible?

STUMPED? CALL (803) 939-4848 FOR THE ANSWER!

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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. 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.

 

CITATIONS.

1 – marketwatch.com/story/how-to-use-mental-tricks-to-save-more-for-retirement-2018-12-10 [12/10/18]

2 – kiplinger.com/article/retirement/T059-C000-S004-savor-the-tastes-of-local-culture-in-retirement.html [12/4/18]

3 – irishtimes.com/culture/books/first-draft-of-the-boy-in-striped-pyjamas-took-me-two-days-1.3034687 [4/3/17]

4 – independent.co.uk/arts-entertainment/books/news/in-just-30-days-you-too-can-write-a-masterpiece-2121214.html [10/31/10]

5 – plansponsor.com/workers-esops-double-retirement-savings/ [12/6/18]

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Monthly Economic Update for December, 2018

In this month’s recap: equities rise with a little help from the Fed, oil dives, and most key domestic indicators look quite strong.

Monthly Economic Update

 

Presented by JB Beckett, December 2018

 

THE MONTH IN BRIEF

For most of November, the stock market was plagued by the same skepticism evident in October: the sense that corporate profits were declining and economic growth was slowing. Then Federal Reserve chairman Jerome Powell threw investors a line: he delivered a speech late in the month that soothed some of the considerable anxiety in the equity markets. Helped by Powell’s comments, the S&P 500 gained 1.79% on the month. While analysts sensed the bull market was in its late phase, consumers remained confident, enthusiastic participants in an apparently thriving economy. In a surprise, home sales picked up. Oil fell. The United Kingdom scheduled a critical parliamentary vote on the Brexit; China and the U.S. returned to the negotiating table regarding tariffs.

1

 

 

DOMESTIC ECONOMIC HEALTH

Speaking to the Economic Club of New York on November 28, Federal Reserve chair Jerome Powell delivered a rather dovish message: if interest rates were not quite where they should be, given the robust economy, they were at least close. In his view, rates were “just below the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.” This was what Wall Street wanted to hear. The Dow Industrials rocketed north 618 points on the day. Just a month earlier, Powell had sounded distinctly hawkish, commenting that rates were a “long way from neutral.”

2,3

A trio of reports affirmed that the economy was indeed in good condition. Even after nine years of recovery from the Great Recession, the pace of hiring was still noteworthy: the Department of Labor’s October jobs report said that 250,000 net new jobs were created in the tenth month of the year. Annualized wage growth was at 3.1%, the best in ten years; headline unemployment was at 3.7%, and U-6 unemployment (unemployed and the marginally employed), at 7.4%. According to a Census Bureau report, the pace of retail sales improved 0.8% in October, quite a change from the 0.1% retreat a month before. Finally, as the month ended, the Department of Commerce announced a 0.6% rise in personal spending in October along with a 0.5% improvement for personal incomes.

4,5

Burgeoning economies go hand in hand with inflation, and the annualized gain in the Consumer Price Index did grow in October to 2.5% from the previous 2.3%. The yearly advance for the core CPI ticked down 0.1% to 2.1%, however. The federal government affirmed third-quarter growth at 3.5% in its third GDP estimate.

5

Consumer confidence indices retreated slightly from recent lofty heights. The University of Michigan’s monthly barometer ended the month at 97.5, down from 98.3; the Conference Board’s index declined to 135.7 from the prior 137.9.

5

Now to the factory front. The latest monthly reports from the Institute for Supply Management showed its manufacturing purchasing manager index at 57.7, below the 59.8 level it was at in September. ISM’s service sector PMI dipped 1.3 points last month to 60.3. While these were descents, both readings were quite strong. Hard goods orders declined 4.4% last month, but that mostly had to do with aircraft orders in the defense industry; minus defense and plane orders, they were simply flat for October.

5,6

Industrial output rose 0.1% in October, while manufacturing production advanced 0.3%. The Producer Price Index rose 0.6% in October; a 7.6% jump for wholesale gas prices was instrumental in the gain. The October PPI increase left yearly wholesale inflation at 2.9%.

5,7

 

GLOBAL ECONOMIC HEALTH

Last month, lawmakers in the United Kingdom scheduled a parliamentary vote on a draft of the Brexit deal for December 11. If Parliament supports the plan created by Prime Minister Theresa May’s government, the next step would be a vote on a withdrawal agreement from the European Union, pursuant to a European Parliament vote and approval from the E.U. Council. If May’s deal is defeated in London, then the U.K. government will have 21 days to make a choice: it could authorize a renegotiation of the Brexit with the E.U., break off ties with the E.U. without any deal, schedule another U.K. referendum on the Brexit, or call for a general election. May’s deal received formal approval from E.U. leaders in late November.

8

On November 30, President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto formally signed the United States-Mexico-Canada Agreement (USMCA), the trade pact designed to replace the North American Free Trade Agreement (NAFTA). The accord must still be approved by the legislature of each member nation, and approval may not be easy on Capitol Hill. In the east, the major news item was the evident deceleration in Chinese factory output. China’s official manufacturing PMI dipped to 50.0 in November, meaning no month-over-month expansion for the sector. (Anything below 50 means contraction.) Some analysts see China’s GDP declining to the vicinity of 6.0% in 2019, which would be its poorest GDP in three decades. Its government may need to resort to an economic stimulus if things weaken further.

9,10

 

WORLD MARKETS

Many foreign stock markets saw November gains. Among the biggest: the Hang Seng in Hong Kong, 7.81%; the Merval in Argentina, 6.99%; the Nifty 50 and Sensex in India, at a respective 6.65% and 6.80%. Japan’s Nikkei 225 rose 4.17%, South Korea’s Kospi added 4.08%, MSCI’s Emerging Markets index improved 4.06%, and Russia’s Micex advanced 4.02%. In Spain, the IBEX gained 3.08%; in Brazil, the Bovespa added 3.01%. There were also gains of 2.04% for Canada’s TSX Composite, 1.26% for Taiwan’s TSE 50, 0.96% for the MSCI World index, 0.82% for the FTSE Eurofirst 300, and 0.78% for the Shanghai Composite.

11,12

 

 

Some indices suffered November setbacks. Germany’s DAX lost 0.27%, the United Kingdom’s FTSE 100, 0.79%. Australia’s All Ordinaries fell 2.35%, while Mexico’s Bolsa retreated 4.15%.

11

 

COMMODITIES MARKETS

A barrel of oil was worth only $50.42 on the NYMEX at the close on November 30. WTI crude dropped 21.80% for the month. Heating oil sank 19.00%, and unleaded gasoline plummeted 20.22%. Natural gas? Quite the opposite. With winter quickly appearing, the value of that commodity jumped 41.29%.

13

 

In crops, soybeans rose 6.74%, and coffee fell 7.88%. In between those extremes, wheat gained 2.84%; cotton, 2.37%; corn, 0.76%. Sugar retreated 2.43%, and cocoa, 3.73%. Copper advanced 4.38% in November; gold also improved, gaining 0.70% to close out the month at a COMEX value of $1,222.10 an ounce. Silver and platinum lost ground last month: silver was off 1.94%; platinum, 4.57%. As November concluded, silver was worth $14.14 an ounce. The U.S. Dollar Index ended November at 96.79 after a one-month loss of 0.35%.

13,14

 

 

REAL ESTATE 

In mid-November, the National Association of Realtors reported a 1.4% October gain for existing home sales. On November 29, however, it said that its pending home sales index had weakened by 2.6% in the tenth month of the year, so the autumn improvement in the pace of residential resales may prove fleeting.

5

October also brought less new home buying: sales fell 8.9%. (It must be noted that these initial numbers tend to be revised later.) The Census Bureau also announced a 0.6% decline for building permits in October, but housing starts did pick up 1.5%.

5

In terms of mortgages, only adjustable-rate loans grew significantly more expensive in November. The average rate on a 5/1-year ARM was 4.04% on November 1, according to Freddie Mac, but 4.12% on November 29. Mean interest on the 30-year, fixed-rate mortgage went from 4.83% to 4.81% in that period; the average interest rate for the 15-year FRM went from 4.23% to 4.25%.

15

Annual home price gains were clearly lessening: the latest 20-city S&P CoreLogic Case-Shiller home price index showed only 5.1% appreciation in the 12 months ending in September.

5

 

 

T I P   O F   T H E   M O N T H

 

Many couples buy life insurance when they start a family, insuring both partners (even if one elects to stop working). There is a good reason to insure both partners: If a stay-at-home spouse or partner passes away and is uninsured, a surviving spouse could face sizable expenses to pay for childcare and other household needs.

 

 

LOOKING BACK, LOOKING FORWARD

Closing at 7,330.54 on November 30, the Nasdaq Composite eked out a monthly gain of 0.34%. The S&P 500’s 1.79% November rise left it at 2,760.17 at the end of the month, while the small-cap Russell 2000 ascended 1.45% to 1,533.27. (The Russell ended November down 0.15% YTD, lagging well behind the performance of the big three.) The Dow Jones Industrial Average advanced 1.68% to 25,538.46.

1,17

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

3.31

5.22

11.75

21.34

NASDAQ

6.19

6.64

16.11

42.43

S&P 500

3.24

4.25

10.57

23.82

 

 

 

 

 

REAL YIELD (%)

11/30 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.04

0.56

0.60

2.38

 

Sources: wsj.com, bigcharts.com, treasury.gov – 11/30/18

18,19,20,21

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

While words from Jerome Powell gladdened investors last month, Wall Street expects another interest rate move from the Fed this month. On November 30, the CME Group’s FedWatch tool put the chances of a December 19 rate hike at 82.7%. The market has probably priced in a hike, but the Street may not be in the mood for a Santa Claus rally, given the seemingly entrenched perception that the business cycle has seen its peak and the glory days of this bull market have faded. This month, investors will carefully examine the latest jobs report and Fed policy statement, react to the new agreement between the U.S. and China to suspend further trade tariffs, and watch what happens with the Brexit parliamentary vote and the OPEC-Russia meeting early in the month. Hopefully, a turbulent year for equities will end on a positive note.

22,23

 

 

Q U O T E   O F   T H E   M O N T H

 

“I am

certain

there is too much

certainty

in the world.”

MICHAEL CRICHTON

 

 

UPCOMING RELEASES

Here is the docket for the rest of the year: the latest Department of Labor employment report and the initial December University of Michigan consumer sentiment index (12/7), the November wholesale inflation report (12/11), November consumer inflation (12/12), November retail sales and industrial production (12/14), November housing starts and building permits (12/18), an interest rate decision at the Federal Reserve and a fresh existing home sales snapshot from the National Association of Realtors (12/19), the Conference Board’s newest leading indicator index (12/20), November personal spending and hard goods orders, the latest PCE price index, and the final assessment of Q3 growth (12/21), November new home sales and the Conference Board’s December consumer confidence gauge (12/27), and November pending home sales and the year’s final University of Michigan consumer sentiment index reading (12/28).

 

 

T H E  M O N T H L Y   R I D D L E

 

It is often surrounded by water and at risk from waves, and it has a fin rather than a sail or motor, but without water and waves, there would be no real use for it. What is it?

 

LAST MONTH’S RIDDLE: It is as old as the world, and yet new each month. What is it?

ANSWER: The moon.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index

®

(VIX

®

) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx

®

, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in

more than 25 emerging economies. The MICEX 10 Index is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The IBEX 35 is the benchmark stock market index of the Bolsa de Madrid, Spain’s principal stock exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The FTSE TWSE Taiwan 50 Index consists of the largest 50 companies by full market value and is also the first narrow-based index published in Taiwan. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets.  The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The DAX 30 is a Blue-Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market

environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – markets.ft.com/data/world [11/30/18]

2 – marketwatch.com/story/seemingly-dovish-powell-says-interest-rates-are-just-below-level-where-they-wont-stimulate-economy-2018-11-28 [11/28/18]

3 – markets.wsj.com/ [11/28/18]

4 – fortune.com/2018/11/02/october-jobs-report-unemployment-rate/ [11/2/18]

5 – investing.com/economic-calendar/ [11/30/18]

 

6 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1 [11/5/18]

7 – ww2.cfo.com/the-economy/2018/11/producer-price-index-rises-0-6-in-october/ [11/9/18]

8 – tinyurl.com/ydcrfazs [11/26/18]

 

9 – businessinsider.com/g20-summit-trump-signs-usmca-nafta-update-mexico-canada-2018-11 [11/30/18]

10 – foxbusiness.com/economy/china-reports-weakest-factory-growth-in-over-2-years [11/30/18]

11 – markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [11/30/18]

12 – msci.com/end-of-day-data-search [11/30/18]

13 – money.cnn.com/data/commodities [11/30/18]

14 – marketwatch.com/investing/index/dxy/historical [11/30/18]

15 – freddiemac.com/pmms/archive.html [12/2/18]

16 – marketwatch.com/story/house-price-growth-slows-to-nearly-two-year-low-as-case-shiller-makes-the-slowdown-official-2018-11-27 [11/27/18]

17 – money.cnn.com/data/markets/russell/ [12/2/18]

18 – markets.wsj.com [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

20 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/30/18]

21 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/30/18]  

22 – cmegroup.com/trading/interest-rates/countdown-to-fomc.html [11/30/18]

23 – reuters.com/article/us-g20-argentina-trump-statement/us-china-declare-90-day-halt-to-new-tariffs-white-house-says-idUSKCN1O101U [12/1/18] 

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Weekly Economic Update for December 3, 2018

In this week’s recap: stocks soar, the USMCA is signed, households spend more, and two housing market indicators fall short.

Weekly Economic Update

 

Presented by JB Beckett, December 3, 2018

 

COMMENTS FROM JEROME POWELL INSPIRE A RALLY

Wall Street liked what it heard from Federal Reserve chairman Jerome Powell last week. While speaking Wednesday to an audience in New York, Powell stated that interest rates “remain just below the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.” He also noted there was “no preset policy path” for raising interest rates in the near term. These dovish signals helped to send all three major U.S. stock indices 2.3-3.0% higher for the day, and their weekly performances were stellar: across five trading sessions, the Nasdaq Composite gained 5.64%; the Dow Jones Industrial Average, 5.16%; the S&P 500, 4.85%. They settled Friday as follows: Nasdaq, 7,330.54; Dow, 25,538.46; S&P, 2,760.16.

1,2

     

NAFTA REPLACEMENT DEAL TAKES ANOTHER STEP FORWARD

Friday, President Donald Trump, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto formally signed the United States-Mexico-Canada Agreement (USMCA) at the 2018 G20 summit in Buenos Aires. The legislatures of each nation must now vote to approve the accord. The USMCA may face significant resistance in Congress.

3

    

CONSUMER SPENDING PACE ACCELERATES; CONFIDENCE GAUGE STILL HIGH

In October, personal spending rose 0.6%, while incomes improved 0.5%. (In noting this, the Department of Commerce revised the 0.4% personal spending gain of September down to 0.2%.) The monthly consumer confidence index, maintained by the Conference Board, declined 2.2 points in November to 135.7; that still exceeded the 135.5 consensus forecast from analysts polled by Briefing.com.

4

    

NEW HOME SALES and PENDING HOME SALES DECLINE

Demand for new homes has faded in the last 12 months. The Census Bureau said that sales slipped 8.9% in October, leaving the annualized sales pace 12.0% below where it was in October 2017. Housing contract activity also waned in October: the National Association of Realtors announced a 2.6% dip for pending home sales, which had increased 0.7% during September.

4,5

     

 

T I P   O F   T H E   W E E K

 

When you write a

will

, you must name an

executor

: either a friend or relative, or a financial or legal professional. A financial or legal professional who serves as your executor will probably be paid with assets from your estate.

 

 

THIS WEEK

The Institute for Supply Management presents its November manufacturing PMI on Monday. | Tuesday brings some earnings: AutoZone, Bank of Montreal, Dollar General, Hewlett Packard Enterprise, Restoration Hardware, and Toll Brothers. | On Wednesday, Federal Reserve chair Jerome Powell testifies on the U.S. economic outlook in the Senate; the Fed also releases its latest Beige Book, ADP unveils its November employment change report, ISM offers its November service sector PMI, and American Eagle Outfitters, H&R Block, Five Below, Hudson’s Bay Co., Korn/Ferry, Land’s End, and Lululemon Athletica all share earnings news. | The latest Challenger job-cut numbers are out Thursday, along with a new initial jobless claims report and earnings from Broadcom, Hovnanian Enterprises, Kroger, Michaels Companies, Thor Industries, Toro, and Ulta Beauty. | Friday, the Department of Labor’s newest employment report takes center stage.

 

 

Q U O T E  O F  T H E  W E E K

 

“Resolve to

be thyself

: and know, that he who finds himself, loses his misery.”

Matthew Arnold

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

3.31

5.22

11.75

21.34

NASDAQ

6.19

6.64

16.11

42.43

S&P 500

3.24

4.25

10.57

23.82

 

 

 

 

 

REAL YIELD

11/30 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.04

0.56

0.60

2.38

 

Sources: wsj.com, bigcharts.com, treasury.gov – 11/30/18

2,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

It can be open, closed, empty, or full. Sometimes you see one, sometimes two. It can be bare, but never a bear. What is it?

 

LAST WEEK’S RIDDLE: What two things will you never eat for dinner?

ANSWER: Breakfast and lunch.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – investors.com/news/economy/fed-chairman-jerome-powell-fed-rates-neutral-dow-jones/ [11/28/18]

2 – markets.wsj.com/us [11/30/18]

3 – businessinsider.com/g20-summit-trump-signs-usmca-nafta-update-mexico-canada-2018-11 [11/30/18]

4 – briefing.com/investor/calendars/economic/2018/11/26-30 [11/30/18]

5 – cnbc.com/2018/11/28/new-home-sales-october.html [11/28/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F17&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F13&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F1%2F08&x=0&y=0 [11/30/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/30/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/30/18]

  

 

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Weekly Economic Update for November 26, 2018

In this week’s recap: a gain in existing home sales, a dip for consumer sentiment, more pain for the oil sector, and more losses for the big three.

Weekly Economic Update

 

Presented by JB Beckett, November 26, 2018

 

SUDDENLY, MORE HOMES SELL

Existing home sales improved in October for the first time in seven months. The National Association of Realtors announced a 1.4% monthly increase, while also noting that the annualized sales pace was 5.1% slower than it had been 12 months earlier. Across the year ending in October, the median sales price for an existing home rose 3.8%. There were 4.3 months of housing inventory listed last month, corresponding to the definition of a “tight” market among real estate professionals.

1

     

AT THANKSGIVING, CONSUMER SENTIMENT WEAKENS

In its final November edition, the University of Michigan’s consumer sentiment index fell to a mark of 97.5, 1.1 points under its final October level. Analysts polled by Refinitiv anticipated a reading of 98.3. In March, the gauge reached a 14-year peak of 101.4; it has trended downward since.

2

    

WHEN WILL OIL RECOVER?

Next week? Next month? Last week, the commodity lost value again, slumping 7.7% on Friday alone (albeit in thin, post-Thanksgiving trading) to a NYMEX settlement of $50.42. That left light sweet crude 34% below its close on October 3. Oil industry analysts widely believe that OPEC will announce supply cuts at its December 6 meeting.

3

    

A SHORT WEEK BRINGS SIGNIFICANT DESCENTS

Oil’s troubles also affected equities, which were already hindered by investor pessimism in the days near Thanksgiving. The S&P 500 stumbled 3.79% across an abbreviated trading week, down to 2,632.56 at Friday’s closing bell. Thanksgiving week also saw the Dow Industrials slide 4.44% to 24,285.95. The Nasdaq Composite lost 4.26% in three-and-a-half trading sessions to fall to 6,938.98.

4

     

 

T I P   O F   T H E   W E E K

 

If your college student has a chance to enter

a work-study program

, you may worry that the part-time job and the course load will prove too much to handle. Most work-study programs set reasonable limits on the hours students work, however, and the job experience can help build your student’s resume.

 

 

THIS WEEK

On Monday, nothing major is scheduled. | The Conference Board’s November consumer confidence index appears Tuesday, plus earnings from Cracker Barrel, Salesforce, and Stein Mart. | Federal Reserve Chairman Jerome Powell delivers a speech on monetary policy in New York on Wednesday, shortly before the closing bell; investors will also interpret the latest new home sales report from the Census Bureau, the second estimate of Q3 GDP, and earnings news from Burlington Stores, Chico’s FAS, Dick’s Sporting Goods, Guess, La-Z-Boy, J.M. Smucker, and Sportsman’s Warehouse. | Thursday, minutes from the most recent Federal Reserve policy meeting arrive, along with October consumer spending figures, the NAR’s October pending home sales report, a new initial jobless claims report, and earnings from Abercrombie, Dell Technologies, Dollar Tree, Express, GameStop, HP, Kirkland’s, and TD Bank. | Friday, the G20 summit starts in Buenos Aires, and with it, the possibility of renewed trade talks between the U.S. and China.

 

 

Q U O T E  O F  T H E  W E E K

 

“Sometimes the questions are

complicated

, and the answers are

simple

.”

Theodore Seuss geisel

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-1.75

3.09

10.24

18.76

NASDAQ

0.52

0.72

14.77

37.14

S&P 500

-1.54

1.16

9.17

20.91

 

 

 

 

 

REAL YIELD

11/23 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.09

0.50

0.56

3.11

 

Sources: ft.com, bigcharts.

com, treasury.gov – 11/23/18

5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

What 

two things

will you never eat for dinner?

 

LAST WEEK’S RIDDLE: What goes back and forth all the time while keeping time, causing a bit of noise only some of the time?

ANSWER: A pendulum.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs, or expenses. Investors cannot invest directly in indices. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.

CITATIONS:

1 – bloomberg.com/news/articles/2018-11-21/u-s-existing-home-sales-rise-for-first-time-in-seven-months [11/21/18]

2 – cnbc.com/2018/11/21/consumer-sentiment-final-november-reading.html [11/21/18]

3 – cnbc.com/2018/11/23/oil-prices-slump-to-their-lowest-level-of-2018-even-as-opec-considers-cuts.html [11/23/18]

4 – markets.ft.com/data/world [11/23/18]

5 – markets.wsj.com/us [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F24%2F17&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F24%2F17&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F24%2F17&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F22%2F13&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F22%2F13&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F22%2F13&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F24%2F08&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F24%2F08&x=0&y=0 [11/23/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F24%2F08&x=0&y=0 [11/23/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/23/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/23/18]

 

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Perspectives Monthly Lifestyle eNewsletter for December, 2018

Beckett Financial Group      825 Meeting Street, West Columbia, SC 29169      BeckettFinancialGroup.com

(803) 939-4848

JB Beckett

JB@BeckettFinancialGroup.com

JB Beckett presents:

 

SMART TIP:

Did you know that fruit “drinks,” “cocktails,” and “beverages” may only contain 5-15% fruit juice? Often, these drinks are loaded with added sugars as well.

 

WHO SAID IT?

“I like to listen. I have learned a great deal from listening carefully. Most people never listen.”

 

[GET THE ANSWER]

 

TEST YOUR

KNOWLEDGE:

Q:

Across the 12 months ending in October, wages grew at an annualized pace not seen in nine years. How much did they increase?

 

A)

2.0%

B)

3.1%

C)

3.8%

D)

5.1%

 

[GET THE ANSWER]

 

 

December, 2018

More Warmth for the Money

Tips to help you stay snug in the winter for less.

[CLICK TO READ]

 

 

Making Your Savings Last for Life

Three little adjustments might help.

[CLICK TO READ]

 

 

Rock

Out

In at the Gym

Why you might love indoor climbing, especially in the winter.

[CLICK TO READ]

 

 

Recipe of the Month

Creamy Bacon Leek Soup – A warm winter treat

[CLICK TO READ]

 

More Warmth for the Money

Tips to help you stay snug in the winter for less.

 

Is your heating bill too large? There are some measures you can take (both digital and analog) that might help you heat your house for less. For free, you can open drapes to let more solar heat in during the day (it helps if your windows are clean), and you can lower the temperature setting on your water heater to around 120°. You can lower the thermostat a couple of degrees, move pieces of furniture away from the radiators and vents you placed them near in the summer, and keep the flue on your fireplace closed when you are not having a fire. For $15 or less, you can install a nylon door sweep, a door snake, clear plastic film for window panes, or rope caulk for frames. You can also pick up a new furnace filter for about $15 (and the per-filter cost drops way down when you buy them in bulk).

 

A first-rate, programmable thermostat may help you cut your heating bills by 10-20% alone. The genius of a programmable thermostat is that it lets you set different temperatures for your house or apartment at various times of the day. You can set it lower in the hours when you sleep; higher in your waking hours. Some programmable thermostats allow up to four different temperature settings per day, and they come with override switches.

1

 

 

Making Your Savings Last for Life

Three little adjustments might help.

 

For decades, people approaching or entering retirement have had a common anxiety: a worry about outliving their money. Even good savers with long histories of contributing to retirement plans share it. While the risk may be higher for some than others, there are some very basic things households can do that might help retirement money stretch a bit further.

 

Take retiring to a less expensive metro area or a smaller city. Personal finance website SmartAsset analyzed how far $1 million in retirement savings would go in certain metro areas. In New York City, the answer was 10.5 years; in San Francisco, 12.7 years. Contrast that with Phoenix (25+ years) and San Antonio (27 years). Another cost saver: reduce the entertainment budget. Retirement means more leisure time and a daily opportunity to dine out and splurge. According to the Employee Benefit Research Institute, Americans aged 65-74 spend an average of $5,832 on eating out, entertainment, and other leisure pursuits per year. Also, too many households do not budget in retirement, and without a budget, money can mysteriously leak out of a retirement fund over time. Even those who do budget may forget to set aside some money for the probabilities of home upkeep and car repair.

2

 

 

Rock

Out

In at the Gym

Why you might love indoor climbing, especially in the winter.

 

If you like to exercise outdoors, you may feel pent up when you are in the gym for your winter workouts. To counter this feeling, look up. If your gym has a climbing wall (or you can find one that does), you may get a workout with a sense of exploration and “outdoor” activity that you will never experience on a Stairmaster.

 

Indoor climbing is less scary than many gymgoers think. Most gyms with climbing walls provide beginner and intermediate classes covering technique, commands, belaying, proper falls, and more. (A soft, padded floor is at the base of the wall.) Not only that, shoes, harnesses, clips, and chalk bags are readily available to rent. Many gyms use auto-belays with automatic braking systems, which means you do not need a climbing partner; the auto-belay will gently guide you down if you feel tired or feel like you are too high up. Novice climbers may perceive indoor climbing or bouldering as an upper-body workout; in fact, it also tests the legs, feet, and core. So if you are feeling some winter blues and the great outdoors seems out of reach, go ahead and climb the walls.

3

 

 

 

 

Recipe of the Month

Creamy Bacon Leek Soup

A warm and hearty winter treat!

 

Ingredients:

3 lbs. baking potatoes

1/3 lb. smoked bacon

1 lb. cheddar cheese

6 cups chicken broth

2 medium leeks

1 cup heavy cream

1 small onion

1 clove garlic

3 Tbsp. butter (unsalted)

1/2 cup one-to-one, gluten free flour

1/2 tsp. sea salt

1/3 tsp. ground black pepper

3 Tbsp. scallions (as garnish)

 

Begin by preparing your ingredients. Wash leeks, peel away the first few outer layers, trim and chop. Peel potatoes and cube. Chop onion. Mince garlic. Shred cheese, and slice scallions, thinly. Set aside.

 

In a very large saucepan, fry bacon over high heat until crisp, place on paper towel, then drain all but 3 tablespoons of drippings. Reduce heat to medium, return pan to heat, and add butter. Once butter has melted, stir in leeks, onion, and garlic, then sauté until softened (approximately 4-6 minutes). Continue to stir as you gently pour in half of the chicken broth, then stir in flour, then the remaining broth. Continue to stir until thoroughly mixed.

 

Increase to high heat and add cubed potatoes. Allow the mixture to come to a boil, then simmer over low heat until potatoes are tender (approximately 12-17 minutes).

 

In a separate bowl (large, heat safe) mix cheese with several full ladles of hot soup. Stir until thoroughly blended, then add cheese mixture to saucepan and increase heat to medium.

 

Finally, maintaining a continuous stir, gently add cream, sea salt, and pepper, allowing the soup to come nearly to a boil, then remove from heat.

 

Chop cooked bacon and sprinkle over the top of each bowl, along with scallions and shredded cheese, as you serve.

 

 

JB Beckett may be reached at

(803) 939-4848 or jb@beckettfinancialgroup.com

BeckettFinancialGroup.com

 

WHO SAID IT?

 

Ernest Hemingway

 

TEST YOUR KNOWLEDGE ANSWER:

A:

 B, 3.1%.

4

 

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. 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.

 

 

Citations

.

1 – thisoldhouse.com/ideas/keeping-warm-less [11/6/18]

2 – usatoday.com/story/money/columnist/2018/10/28/retirement-budget-spending-tips-avoid-running-out-money/1748978002/ [10/28/18]

3 – health.com/fitness/beginner-rock-climbing [10/5/18]

4 – marketwatch.com/story/economists-say-wow-to-jobs-report-as-wage-growth-picks-up-2018-11-02 [11/2/18]

 

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