Fed/GDP/Jobs/Earnings – All Viewed Positive!!

Last week I wrote “A lot of stuff this week”.  Yes, it was a busy week!  The Federal Reserve lowered rates as expected by 25 basis points.  This is the 3rd rate cut in 4 months.  Many are now speculating the Federal Reserve will be on hold until after the election unless the economic data alters their current view.    I will be a little surprised if the Fed doesn’t act in one direction or another prior to our next Presidential Election!

GDP

The US economy grew an annualized 1.9% in the third quarter of 2019 which was higher than anticipated.  Although this number is down from the 2% reading in the 2nd quarter, it was taken in a positive light because it is mostly the consumer driving the number with business basically absent from any numeric positive input at this time.

Jobs Report

The monthly jobs report also did not disappoint with the economy creating 128,000 jobs in October, and September was revised higher by 44,000 to 180,000.  The trailing 6 month jobs creation number is now 156,000 per month, down from the average in 2018 of 211,000 per month.  My belief is the decrease is simply explained away as the trade tariff situation keeping corporate America at bay with their wallets.  The unemployment rate is an amazing 3.6%.  That is a Wow!!

Corporate Earnings!

356 S&P 500 companies have now reported 3rd quarter earnings with 76% reporting above consensus.  The overall corporate earnings forecast for the S&P 500 prior to reporting season was for a -3.2%.  It certainly looks as earnings may end up flat or even slightly positive.  Again, thank you to the consumer.

Markets Last Week

The Dow rose 1.44%; the S&P 500 gained 1.47%, the NASDAQ 1.74% and the Russell 2000 1.96%.

Over the pond, the International EAFE rose 1.19%, Emerging Market Stocks up 1.30%.

Bonds also rose in price as the Barclays’s Aggregate Bond Index increased .45% after the Fed lowered rates.

 

Question of the Week…

Which of the following is not a requirement to able to contribute to a Roth IRA?

  1. Must have earned Income
  2. Be under 70 ½
  3. Must have earned income under certain limits
  4. Must have a long investment time horizon

**It’s possible to have more than 1 correct answer**

Answer to last week’s question…!

Which parts of Medicare enable a Medicare Beneficiary to visit with any Doctor in the United States that accepts Medicare?

      (It’s possible that more than 1 answer is correct!)

  1. Medicare Advantage Plans
  2. Medigap (Supplement) Plans
  3. Parts A & B
  4. Part D
  5. Medicare Vision and Dental Plans

The correct answers are both #2: Medigap (Supplement) Plans and #3: Parts A & B.

For additional information about what you need to know about Medicare, please click here.

 

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