Market Banking on a Trade Deal & Medicare Part B – 6.7% Premium Hike!

The US Stock Market continues to melt higher anticipating a Phase 1 Trade Deal with China.  As we are unaware of the details, the market is anticipating with a trade deal, Corporate America will get off the sidelines and Corporate Earnings will again re-ignite.  Argus research has reported that the overall decline in 3rd quarter Corporate Earnings will be (.5%) instead of the previous anticipated decline of (3.2%).  The belief is that Earnings will increase by 1.9% for full year 2019 and then increase by 10.1% in 2020.

A complete breakdown with China would be a disaster however that is not seen as a real possibility by the markets.

Equity Markets Rise for the Week

The melt up in equity prices lifted the Dow Jones higher by 1.37%, the S&P 500 .93%, the Nasdaq Composite 1.06% and the Russell 2000 .63%.

International Markets did not disappoint last week with the MSCI EAFE International Index rising .54% and the MSCI Emerging Market Stock Index up 1.50%.

Yield Curve Stabilizing

Adding to market optimism is that our US Interest Rate Yield Curve is stabilizing, at least for now.  The 10 Year US Treasury, as of the moment I’m typing this, yields 1.945%, up from 1.72% a week prior.  The 2 Year Treasury is yielding 1.68%.

The fact that the curve is normalizing provides additional confidence to the markets that the situation is somewhat normal.

Medicare Part B Premiums Rising for 2020

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and certain other services not covered by Medicare Part A.  Each year, premiums, deductibles, and co-payments are adjusted according to the Social Security Act.

For 2020, the standard Medicare Part B premium will rise from $135.50 to $144.60 per month, an increase of $9.10 or over 6%.  The annual Part B deductible rises from $185 to $198.  The increase in Part B is being attributed to rising spending on physician-administered drugs.

For those that only have Parts A and B without either a Supplement or an Advantage plan will also see other deductibles and co-payments rise, for example, the Part A hospital deductible will increase from $1364 to $1408.  Most Supplement plans cover this in full, as well as other co-payments.

Our office can provide  guidance with your Medicare planning, and the importance of coordinating Medicare with your overall Retirement Income Plan! To take full advantage of our expertise in this area, we also frequently offer Medicare educational workshops throughout the community. Please give us a call or visit our website to learn more!

 

Question of the Week…

Hard to believe that Thanksgiving is only weeks away and is one of my favorite holidays!

The first Thanksgiving parade took place in Philadelphia in 1920.  Which department store sponsored this parade?

  1. Gimbel’s
  2. Macy’s
  3. Montgomery Ward
  4. C. Penny’s

Answer to last week’s question…!

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

The correct answers are:

  • #2 – Be under 70 1/2 – You can be any age to contribute to a Roth IRA as long as you have earned income!
  • # 4 – Must have a long investment time horizon. This is simply not a requirement however often taken into consideration when selecting the investment for the actual Roth IRA. 

 

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