Money

Dow jumps 250 points to record high as Apple rises and trade-war fears simmer down

The Dow Jones Industrial Average hit its first record high since January on Thursday as gains in Apple and a decrease in trade fears lifted the 30-stock index. The Dow rose 250 points as Boeing, Caterpillar and Apple outperformed. The S&P 500 also rose 0.7 percent to an all-time high, its first since late August, as materials and tech outperformed. President Donald Trump touted the S&P 500’s record in a tweet, saying, “S&P 500 HITS ALL-TIME HIGH Congratulations USA!” Art Cashin, director of floor operations for UBS, said the Dow’s record should be a bullish confirmation of the high reached by the Dow Transports last week. “That should be a Dow theory buy signal,” Cashin said. “According to the theory, the economy is supposed to be improving and therefore you have six to nine months of a higher stock market.” The Nasdaq Composite also rose 0.9 percent as Amazon gained 1.1 percent ahead of an event where they are expected to unveil new Alexa-powered devices. Apple, meanwhile, jumped 1.6 percent. Boeing and Caterpillar, two bellwethers for trade, rose 1.1 percent and 1.8 percent, respectively.

Great news in this Trump economy!!!   For more, click on the text above.      🙂

Median U.S. Household Income Rose in 2017, Considered Highest on Record

The median U.S. household income rose for the third year in a row in 2017, according to data from the U.S. Census Bureau released Wednesday. The Census data showed that median household income increased in 2017 to $61,372, an increase of 1.8 percent after taking inflation into account, and is considered to be the highest on record. Although the household income level is considered to be the highest ever recorded, census officials say it is about the same, when adjusted for inflation, as in 1999 and 2007. The median household income also rose for the third year in a row, although the growth rate increased 3.2 percent in 2016 and 5.2 percent in 2015. The increase in household income over the past year comes as the poverty rate in America has declined and more Americans are participating in the workforce. The poverty rate dropped to 12.3 percent, marking a decrease in the poverty rate for the third year in a row, while the number of Americans working full-time jobs went up by 2.4 million in 2017. “We’re continuing to see that shift from part-time, part-year work to year-round, full-time work,” Trudi Renwick, an economist at the Census Bureau, told the Wall Street Journal. Much of these gains in household income and workforce participation come as the economy’s strength continues to climb in 2018. The American economy added 201,000 jobs in August 2018 and the unemployment rate has stayed low at 3.9 percent. Jobless claims also fell to a record-low of 203,000—the lowest level for claims since 1969. The 2017 data on median household income also does not fully include the effects of President Trump’s tax cuts instituted at the end of 2017, which caused incomes to rise in 2018 through the initial tax cuts and the tax reform bonuses many companies provided to their employees.

Stocks Hit Record Highs Following Trade Deal with Mexico

Stocks jumped higher Monday following the announcement that the U.S. and Mexico have reached a new trade deal. The S&P 500 and the Nasdaq Composite both hit record highs. The Nasdaq was up 0.91 percent, while the S&P 500 rose 0.77 percent. The Dow Jones Industrial Average rose slightly more than 1 percent. News of the deal appeared to reassure investors that the Trump administration can make solid progress on trade deals. Shares of traditional U.S. automakers were some of the best performers of the day. General Motors was up 4.8 percent. Ford rose 3.2 percent. Goodyear Tire & Rubber rose 3.27 percent. Shares of Tesla, however, fell by more than 1 percent.

Great news today!!    🙂

Trump urges six-month earnings reports to replace quarterly reports

President Trump called for an end to quarterly earnings reports in a tweet early Friday morning, instead advocating for a six-month system that he said would allow for greater flexibility for businesses. “Making the United States business friendly is key to job growth!” he wrote in a second tweet. Trump said he reached out to the U.S. Securities and Exchange Commission and asked them to study potential implications of a system change. FOX Business reached out to the Securities and Exchange Commission for comment. In June, nearly 200 business moguls Opens a New Window. from the Business Roundtable – including JPMorgan Chase Chairman and CEO Jamie Dimon and Berkshire Hathaway Chairman and CEO Warren Buffett – urged companies to shift away from releasing quarterly earnings guidance, which they said is harming the economy. According to these CEOs, short-term earnings guidance can stunt economic growth by shifting companies’ investments away from technology, hiring and research and development in order to meet quarterly earnings forecasts, which too often can be affected by factors outside of a company’s control, like commodity-price fluctuations, stock-market volatility and the weather. “The pressure to meet short-term earnings estimates has contributed to the decline in the number of public companies in America over the past two decades,” Dimon and Buffett wrote in an op-ed that appeared in The Wall Street Journal. Opens a New Window. In a 2017 paper, Opens a New Window. a Boston University economics professor, Stephen Terry, studied the effects of short-termism on investment, and found that companies that just meet their earnings forecasts tend to exhibit lower growth in research and development — suggesting that companies intentionally hold off on investing in those areas to meet quarterly numbers. Terry concluded that this system ultimately lowers economic growth in the U.S. by .01 percent annually.

 

These are the best and worst states for middle-class Americans

The economy may be strengthening, but affordability remains a concern for many middle-class Americans – in some states more than others. In a new study from GOBankingRates researchers found that South Dakota is the best place for middle-class individuals to live. The state has a college graduation rate of more than 48 percent, while in-state tuitions and fees for the 2017-2018 school year were about $8,450. The median list price for a home was $229,500 and the home ownership rate is about 69 percent. Iowa was ranked second among the top destinations for individuals earning an average income. Home values in this state have increased 3.9 percent since 2013, while the median list price is about $181,900. The number of middle-class households in Iowa, however, has declined by more than 2 percent over recent years. Florida, which has no state income tax, is next on the list of best states for the middle class. As of 2014, the average resident considered to be a part of the middle class was earning about $70,100. In-state college tuition costs $6,360, on average, down 4 percent over the past five years. Wyoming and Mississippi ranked fourth and fifth, where the average individual belonging to the middle class earns about $75,800 and $71,400, respectively. Also in the top 10 were Nebraska (6), West Virginia (7), North Dakota (8), Washington (9) and Idaho (10). On the other hand, Hawaii was found to be the worst state for middle-class Americans. Middle-class income in the state has declined by more than 3.6 percent throughout recent years, while home values have risen by 6.8 percent. Louisiana occupied the second spot on the list of worst states for the country’s middle class, where the cost of in-state college tuition has risen 48 percent over the past five years. Alaska followed Louisiana, a state with a college graduation rate of just 32 percent. Connecticut ranked fourth, where the median list price of a house was about $325,000 and the cost of in-state tuition has risen 20 percent over the past five years, to $12,390. Rounding out the top 10 are New York, Massachusetts, New Jersey, Virginia, California and Colorado. GOBankingRates’ study examined a range of different factors in order to determine which states are best, and worst, for the middle class, including change in median household income over time, change in the number of households earnings middle class income, college graduation rates, the cost of in-state tuition and median home values, among other factors.

Consumer Confidence Rises Toward 18 Year High Again

The confidence of American consumers is riding higher. Consumer confidence rose by more than expected in July, according the Conference Board. The consumer confidence index rose to 127.4 in July, four-tenths of a percentage point above expectations. June’s reading was revised up from 126.4 to 127.1, indicating confidence was even stronger in June than previously thought. While the July reading was below the recent high of 130 it is very high by historical standards. “Consumers’ assessment of present-day conditions improved, suggesting that economic growth is still strong,” said Lynn Franco, Director of Economic Indicators at The Conference Board.“However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating.” That’s likely an accurate assessment. The economy grew at a 4.1 percent pace in the second quarter, the highest level since 2014. It’s unlikely to accelerate to an even higher growth rate in the remainder of the year. Consumers views of current conditions improved further in July. Just 10.1 percent say business conditions are “bad, down from 11.5 percent a month earlier. Those business conditions are “good” rose to 38.0 percent from 37.2 percent. The view of the labor market was also improved. Those claiming jobs are “plentiful” increased to 43.1 percent from 40.4 percent. Only 15 percent describe jobs as “hard to get”—unchanged from June.

More great economic news in this Trump economy!!    🙂

How the new tax law creates a ‘perfect storm’ for Roth IRA conversions

For years I’ve lectured about the wonderfulness of Roth IRAs. While the new Tax Cuts and Jobs Act (TCJA) includes one negative change for Roth IRAs, they are still pretty wonderful. Here’s what you need to know about Roth IRAs and especially Roth IRA conversions in the post-TCJA world. Unlike traditional IRA withdrawals, qualified Roth IRA withdrawals are federal-income-tax-free and usually state-income-tax-free too. What is a qualified withdrawal? It’s one that is taken after you, as the Roth account owner, have met both of the following requirements: 1. You’ve had at least one Roth IRA open for over five years. 2. You’ve reached age 59½ or become disabled or dead. For purposes of meeting the five-year requirement, the clock starts ticking on the first day of the tax year for which you make your initial contribution to your first Roth account. That initial contribution can be a regular annual contribution, or it can be a conversion contribution. For example, say your initial Roth pay-in was an annual contribution made on 4/1/14 for your 2013 tax year. The five-year clock started ticking on 1/1/13 (the beginning of the tax year for which the contribution was made), and you met the five-year requirement on 1/1/18. Unlike with a traditional IRA, you don’t have to start taking annual required minimum distributions (RMDs) from Roth accounts after reaching age 70½. Instead, you can leave your Roth account(s) untouched for as long as you live if you wish. This important privilege makes your Roth IRA a great asset to leave to your heirs (to the extent you don’t need the Roth money to help finance your own retirement). Annual Roth contributions make the most sense for those who believe they will pay the same or higher tax rates during retirement. Higher future taxes can be avoided on Roth account earnings, because qualified Roth withdrawals are federal-income-tax-free (and usually state-income-tax-free too).

For more, click on the text above.