The H Group Blog

Investment and Financial Planning news from some of the best in the business.

How is Social Security Doing?

Ron Kelemen - Tuesday, July 18, 2017

Every July the trustees of the Social Security Trust Funds for the Old-Age & Survivors and Disability Insurance (OASDI) release their annual report on the health and long-range outlook of Social Security. The projections are based on numerous actuarial assumptions, which you can find in their 2017 Trustees Report. (The ones in the figure below are their intermediate assumptions.) The good news is that more money is still coming into the funds than going out. Payments to beneficiaries come from these reserves, interest earnings, and payroll taxes. The reserves will be depleted by 2034, the same as projected last year. At that time, benefits can only be paid by incoming payroll taxes, projected to be 77% of what beneficiaries are scheduled to receive. That is if nothing is done between now and then. The report projects that increasing the payroll tax by 2.83% could extend the longevity of the trust fund to 2090 and beyond. But more likely, a combination of fixes could accomplish the same thing. So, ignore the scare rhetoric about Social Security going bankrupt. Beneficiaries will still get full benefits through 2034, then about 23% less after that. In our opinion, It's still a good deal. Read Entire Article Here

Weekly Review - July 17, 2017

Website Administrator - Monday, July 17, 2017

Summary

Economic data for the week was highlighted by a decline in retail sales, consumer sentiment, job openings and year-over-year consumer inflation, while industrial production ticked higher. Investors were also reassured by Fed Chair Yellen's comments concerning a continued slow pace of monetary policy tightening.

Equities in the U.S. and many foreign markets experienced gains for the week, as global sentiment improved in a few areas. Bond prices rose upon interest rates falling globally. Commodity indexes rose on the heels of a weaker dollar and rebound in crude oil prices for the week.

 Read Entire Article Here

Weekly Review - July 10, 2017

Website Administrator - Monday, July 10, 2017

Summary

Economic data for the holiday-abbreviated week was mixed, with stronger ISM and non-ISM index data, while the monthly employment situation report underwhelmed a bit in some respects.

Equity markets were mixed with the U.S. edging slightly higher, while foreign equities lagged across the board for the most part. Bonds lost ground in most sectors as interest rates again edged higher, with U.S. debt outperforming foreign. Commodities lost ground again due to continued weakness in energy prices.

 Read Entire Article Here

Weekly Review - July 3, 2017

Website Administrator - Monday, July 03, 2017

Summary

Economic data for the week was led by weaker durable goods orders, pending home sales and jobless claims, while several consumer sentiment measures strengthened.

Equities were mixed for the week, with declines in the U.S. and foreign developed markets, while other groups were little changed. Investment-grade bonds suffered due to interest rates creeping higher. Commodities gained due to a rebound in the price of crude oil for the first time in weeks.

 Read Entire Article Here

Weekly Review - June 26, 2017

Website Administrator - Monday, June 26, 2017

Summary

In a slow week for economic data to open the summer, several housing metrics showed strength, as did the Index of Leading Economic Indicators, while jobless claims ticked upward slightly.

Equities gained a bit for the week in the U.S., Japan and emerging markets, while Europe and the U.K. declined. Bonds were up slightly with mixed interest rate changes across the yield curve. Commodities lost ground as high oil supplies continued to push down prices.

 Read Entire Article Here

Question of the Week - June 26, 2017

Website Administrator - Monday, June 26, 2017

Why is market volatility still so low?

Volatility usually drops during the summer months, as trading desk activity slows down along with vacations picking up, etc. (although Americans don't usually take the month-long European variety that occur around August). This year, however, the low vol started earlier, and there does tend to be a connection between bullishness and lack of volatility. Markets tend to rise in a much more tempered pace compared to declines, which often occur in sharp, unpleasant spurts. That mathematical relationship alone explains why the VIX index tends to stay lower in a rising market and rise sharply in a falling one.

 Read Entire Article Here

Weekly Review - June 19, 2017

Website Administrator - Monday, June 19, 2017

Summary

Economic news for the week centered on the Fed, which raised rates another quarter-percent. Other data included a drop in retail sales and disappointing housing metrics, continued low jobless claims, and strength in a variety of regional manufacturing surveys.

Equity markets were flattish in the U.S., but declined for the most part abroad. Bonds fared better, with lower long-term rates despite the Fed's raising of short-term rates. Commodities lost ground, with crude oil losing several percent on the week.

 Read Entire Article Here

Weekly Review - June 12, 2017

Website Administrator - Monday, June 12, 2017

Summary

Economic data for the week was very light, and limited to a slight pareback in non-manufacturing growth and continued low readings for jobless claims.

Equities performed negatively around the world last week, especially in the U.S. technology sector, reversing recent strength. Bonds also suffered as interest rates ticked upward and foreign bonds were held back by a stronger dollar. Commodities declined as oil prices again fell due to oversupply concerns.

 Read Entire Article Here

Weekly Review - June 5, 2017

Website Administrator - Monday, June 05, 2017

Summary

Economic data for the week was generally flat to a bit weaker, with decent results from manufacturing surveys, continued mixed housing data, and a poorer-than-expected May employment situation report.

Equity markets gained both in the U.S. and overseas, as did bonds, with a decline in interest rates and falling dollar, which benefited foreign securities. Commodities declined along with crude oil due to high inventories and an increase in anticipated drilling activity.

 Read Entire Article Here

Weekly Review - May 30, 2017

Website Administrator - Tuesday, May 30, 2017

Summary

Economic data last week was led by a weaker durable goods report, an upward revision to first quarter GDP, weakness in housing, and generally neutral results from sentiment and jobless claims.

Equity markets gained for the week, with U.S. stocks outperforming developed foreign markets, but under performed emerging markets with a recovery in Brazil. Bonds were generally flat with little change in yields in the U.S., while emerging market bonds outperformed. Commodities lost ground following declines in oil prices.

 Read Entire Article Here

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