The Week on Wall Street
As November wrapped up, U.S. equity benchmarks advanced. Stocks were again aided by a sense of optimism that a preliminary U.S.-China trade deal could be near.
FACT OF THE WEEK
Millions of monarch butterflies fly to Mexico for the winter. They are the only insect that migrates to a warmer climate that is 2,500 miles away each year, some covering 50 to 100 miles per day. Other insects prepare for winter by producing higher glycerol levels which creates a body "antifreeze".
For the week, the Nasdaq Composite added 1.87%; the S&P 500, 1.21%; the Dow Jones Industrial Average, 1.03%. The MSCI EAFE index, which measures the performance of developed stock markets outside North America, gained 0.89%.
Markets Wait for News of a Trade Pact
Wednesday, a senior White House official told Politico that the U.S. was “millimeters away” from a phase-one trade agreement with China, a deal that might involve the removal of certain tariffs.
Still, friction remains within the Sino-American relationship. Last week, President Trump signed two bills into law backing pro-democracy demonstrators in Hong Kong. China’s Ministry of Foreign Affairs quickly reacted, stating that American lawmakers had “sinister intentions” and adding that China would take “strong counter-measures” in return.
The Latest on Consumer Spending and Consumer Confidence
Personal spending was up 0.3% in October, according to the Department of Commerce. This happened even with no gain in household incomes.
The Conference Board said its Consumer Confidence Index came in at 125.5 for November. Even though it has declined for four straight months, the index remains well above levels seen during the first half of the decade.
FINANCIAL STRATEGY OF THE WEEK
CERTAIN UNCERTAINTIES IN RETIREMENT
During your retirement years, you will continue to come face to face with life uncertainties, and at times, feel your sense of confidence is being tested.
Life’s uncertainties may continue to test your sense of confidence during your retirement years, according to the 2017 Retirement Confidence Survey by the Employee Benefits Research Institute, only 18% of retirees feel “very confident” they have enough assets saved to live comfortably while the other 40 percent felt "not too confident" to "not at all confident."
Today’s retirees face two overarching uncertainties. It’s important to remember that remaining flexible and responsive to changes in the landscape may help you meet the challenges of uncertainty in the years ahead.
An Uncertain Tax Structure
Mounting national debt and the growing liabilities of Social Security and Medicare are straining federal finances. How these challenges will be resolved remains unknown, but higher taxes—along with means-testing for Social Security and Medicare—are obvious possibilities for policymakers.
Future tax rate hikes, reduction to Social Security and or Medicare Benefits all may adversely impact your retirement security and has the potential to place a further strain on your retirement.
If you know someone who retired or looked to retire in 2008, you know what market uncertainty can do to a retirement blueprint. The uncertainties haven’t gone away.
Over a 30-year period, uncertainties may evaporate or resolve themselves, but new ones historically have emerged. This means understanding that the solutions for one set of economic circumstances may not be appropriate for a new set of circumstances.
Scottish Philosopher Thomas Carlyle said, "He who could foresee affairs three days in advance would be rich for thousands of years.” Preparing for uncertainties is less about knowing what the future holds as it is about being able to respond to changes as they unfold.
As always, please contact my office with any questions or financial concerns you may have.
Have a great week!