POCKETBOOK: Week ending Aug.25, 2018

From The Palm Beach Post Editorial Page, Tuesday, August21, 2018.

• Trump’s Money Blind Spot
  

Last week, President Trump said that if he were impeached, the stock market would crash and the result would be a lot of poor people.

From The Washington Post on Aug.22, 2018 titled, “Impeachment means losing his big economic brain, Trump warns.” comes this: “I tell you what, if I ever got impeached, I think the market would crash, I think everybody would be very poor, because without this thinking ( he pointed at his head), you would see—-you would see numbers that you would believe in reverse.”

Ya gotta laugh when you hear, read or see stuff like that coming out of Mr. Trump’s mouth.

Why? Primarily because there already are a whole bunch of poor, i.e. low-income, people in America.

How many? According to Pew Research, 32 percent of households are considered low-income as in earning less that $35,000 a year.

So while the stock market has continued to reach new historic performance heights, that bull has done little—if anything—to help the millions upon millions of poor people and low-income  households.

 

• Market Quick Glance

Another week where all-time record closing index highs were everywhere—-almost.

It was the DJA that didn’t make the reaching-new-highs-grade last week. Maybe that’s because it’s made up of large companies and the market this year has been living in a small- to medium-size world.

As for the stats, according to Ironman at Political Calculations.com, it took only 147 trading days for the closing value of the S&P 500 (SPX) to reach its new closing high. That would be from January 26, 2018 to August 24, 2018.

Looking back much further, this bull market has run longer than any other—on March 9,2009, the S&P 500 closed that day at 676.53.

You’ve come a long way, baby.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data if according to CNBC.com and based on prices at the close of business on Friday, Aug.24, 2018.

–DJIA 4.33% YTD up from previous week’s return of 3.84%.

• 1 yr Rtn 18.39% up a bit from the previous week’s 18.02 %

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 7.52% YTD up a jump from last week’s 6.60%

• 1 yr Rtn 17.86% up from last week’s 16.06%

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on August 24, 2018 of 2,876.16. The previous high was reached on January 26, 2018 of 2,872.87..

 

-NASDAQ 15.10% YTD way up from last week’s 13.22%

• 1yr Rtn 26.70% up from last week’s 25,53%

NASDAQ reached a BRAND NEW 52-week CLOSING HIGH on August 24, 2018 of 7,949.71. The previous high was reached on July 25, 2081 of 7,933.32.

 

-Russell 2000 12.38% YTD way up from last week’s 10.25%

• 1yr Rtn 25.61% up from last week’s 24.58%

The Russell 2000 reached a BRAND NEW 52-week ALL-TIME HIGH on August 24, 2018 of 1,726.97. The previous high was reached on July 10, 2018 of 1,708.56.

 

-Mutual funds

A big week for equities thanks to the S&P 500, Russell 2000 and NASDAQ all closing at record highs translating into some sweet improved returns for various fund types.

At the close of business on Thursday, August 23, 2018, the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 7.87%. That’s up almost one full percentage point  from the previous week’s figure of 6.71%, according to Lipper.

Once again, Small-Cap Growth Funds lead the performance way—returning on average 19.43%. Only Science & Technology Funds, they fall under the Sector heading, came kinda sorta close to that return averaging 15.15%

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

• Your Kids’ Futures
  

Here, from my University of North Dakota Alumni Review magazine comes this: “85% of today’s children will be employed in jobs that have yet to be created.”

The source: Institute for the Future.

Huh. That’s kinda sorta scary.

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POCKETBOOK: Week ending Aug.11, 2018

• Minimum Wage

A minimum wage of 15 bucks an hour seems like a reasonable income base. It does, after all, translate to $600 a week provided one is working a 40-hr week and over $30,000 a year.

Whether or not you’re a fan of that hourly rate, you might be surprised to learn how few people really do make minimum wage in the U.S. these days.

According to the Bureau of Labor Statistics ,(BLS), in 2017 over 80 million or 53.3 percent of workers ages 16 and over were paid an hourly rate. Of them, 2.3 percent, or 1.8 million folks, were paid the currently federal minimum wage of $7.25 an hour or less.

I bet you thought there were more.

 

• Market Quick Glance

Another week of mostly ups and a few downs. But who is counting?

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data if according to CNBC.com and based on prices at the close of business on Friday, Aug.17, 2018.

–DJIA 3.84% YTD up from previous week’s return of 2.40%.

• 1 yr Rtn 18.02% way up the previous week’s 15.88 %

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 6.60% YTD up from last week’s 5.97%

• 1 yr Rtn 16.06% up from last week’s 17.29%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 13.22% YTD down from last week’s 13.55%

• 1yr Rtn 25.63% down from last week’s 26.09%

Nasdaq reached a new 52-week high on July 25, 2081 of 7,933.32. The previous high was reached on July 17, 2018 of 7,867.15.

 

-Russell 2000 10.25% YTD up from last week’s 9.85%

• 1yr Rtn 24.58% up from last week’s 22.90%

The Russell 2000 reached a new 52-week high on July 10, 2018 of 1,708.56. The previous high was reached on June 20, 2018 of 1,708.1.

 

-Mutual funds

Equity funds lost a little ground last week, as, at the close of business on Thursday, August 16, 2018 the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 6.71%. That’s down a bit from the previous week’s figure of 6.97%, according to Lipper.

Small-Cap Growth Funds continue to lead the performance way. They, btw, fall under the broad U.S. Diversified Equity Funds heading.

Looking at other headings,  under the Sector Fund heading— it includes health, bio-tech, commodities, precious metals and other fund types— the average return was 1.39%.

World Equity Funds, on the other hand, had an average return that was underwater, -4.64%; Mixed Asset Funds, 0.91%; Domestic Long-Term funds, -0.16%; and World Income Funds -4.43%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

• Funerals: Beyond First-Class

 For those with plenty of money to spend —and I mean plenty—and who wish to send their loved ones off in super style, Bloomberg has reported that the rich and powerful and now spending tens of thousands of dollars burying their loved ones.

From a recent 8/18/18 Bloomberg piece comes this: “They are choosing to be laid to rest in $60,000 gold-plated coffins and ferried by horse-draw funeral carriage or Rolls-Royces hearses. Some are even flying friends and relatives to exotic locals for destination funerals.”

Really?

Yes, really.

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POCKETBOOK: Week ending Aug.11, 2018

•Grifter

Have to admit, I never really thought much about what a grifter was until I’d heard that Wilbur Ross, our United States Secretary of Commerce, was described as one. The 80-year old Jr., is supposed to be one of the richest members in Trump’s cabinet, who somehow didn’t divest all of his securities before accepting the position. As for how he accumulated all of his wealth, that Forbes estimates it to be around $700 million, all sorts of reasons swirl—including those resulting from the talents of a grifter.

From a Forbes story written by Dan Alexander published earlier this month: “If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.”

Who knows if that’s true or not. But, what does have a foundation in the truth is what a grifter is. Here are two definitions:

• From www. vocabulary.com :” If there’s one type of person you don’t want to trust, it’s a grifter: someone who cheats others out of money. Grifters are also known as chiselers, defrauders, gougers, scammers, swindlers, and flim-flam men. Selling a bridge and starting a Ponzi scheme are things a grifter might do.”
• From http://www.merriam-webster.com :”Grift” was born in the argot of the underworld, a realm in which a “grifter” might be a pickpocket, a crooked gambler, or a confidence man-any criminal who relied on skill and wits rather than physical violence-and to be “on the grift” was to make a living by stings and clever thefts.”

For some reason, I can’t help but think that their may be a few more grifters roaming around in Trump’s White House world.

 

• Market Quick Glance

An upper of a week for all four indices here.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data if according to CNBC.com and based on prices at the close of business on Friday, Aug.10, 2018.

–DJIA 2.40% YTD down from previous week’s return of 3.01%

•1 yr Rtn 15.88% up the previous week’s 15.60 %

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 5.97% YTD down from last week’s 6.24%

• 1 yr Rtn 16.06% up from last week’s 14.89%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 13.55% YTD up from last week’s 13.16%

• 1yr Rtn 26.09% up from last week’s 23.21%

Nasdaq reached a new 52-week high on July 25, 2081 of 7,933.32. The previous high was reached on July 17, 2018 of 7,867.15.

 

-Russell 2000 9.85% YTD up from last week’s 8.98%

• 1yr Rtn 22.90% up from last week’s 19.08%

The Russell 2000 reached a new 52-week high on July 10, 2018 of 1,708.56. The previous high was reached on June 20, 2018 of 1,708.1.

 

-Mutual funds

A jump up for the week’s average from two weeks ago. Then, the average total return for funds that fall under the U.S. Diversified Equity Funds heading was 6.97%. At the close of business on Thursday, August 9, 2018 that average return had moved ahead to 7.18%, according to Lipper.

Small-Cap Growth Funds was the group with the best average performance for the 592 funds that Lipper tracks under that heading — average total return of 16.48%.

Now is as good a time as any to that a look back at how equity  funds have performed over the past 52 week, 2 years, 3 years and 5 years. And, Small-Cap Growth Funds have done well, from this perspective. From the most recent (52 weeks) to the longest, (5 years) that group’s average performance was: 32.42%; 22.58%; 12.84%; and 11.99%.

Compare that with the average total returns for all of the U.S. Diversify Equity Funds and the performance numbers look as follows: 18.40%; 15.34%; 10.14% and 10.15%.

Small-Cap Growth Funds has outperformed in all.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

• Turkeys

 Remember the old 1970s and 1980s saying, “Don’t let the turkeys get you down”?

Back then the turkey part had nothing to do with the country of Turkey. It referred to dealing with jerks and suggested not to let those who can wreck our day do just that.

Today, it’s the value of Turkey’s withering currency and their economic problems that have been playing havoc with our markets.

Combine that with President Trump’s desire to impose tariffs on pretty much everything, and perhaps it’s time to bring back that old saying.

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POCKETBOOK: Week ending Aug.4, 2018

According to the Bespoke Investment Group,  more than 1,500 stocks have already reported their Q2 earnings. Their chart above shows the percentage of them that have beaten EPS (earnings per share) estimates. Note that percentage has been falling.

• Good economic news on Wall Street. How’s yours?

There’s no denying the robust economic results heard lately from economists, Wall Street analysts and reporting agencies. Thomson Reuters reported that profits were up 23.5% for S&P 500 companies during the past three months ending with June.

The chart above, from Bespoke, shows the percentage of companies that have beaten earnings estimates from 1999 through the second quarter of 2018.

While things may look good on paper, the paper that’s most important to you is how your investments have performed.

If you haven’t already, please take the time to take a good long honest look at the year-to-date performance of the individual stocks, bonds, mutual funds and ETFs that you own. That includes those in your personal accounts including those included in your IRAs, 401Ks, ROTH accounts and cash in savings accounts.

I’ve always said that the three most important words in the world of personal investing and money management can be summed up in the acronym MOM—or My Own Money.

It’s all that really counts.

 

• Market Quick Glance

An upper of a week for all four indices here.

Below are the weekly and 1-year index performance results for the four major indices—DJIA, S&P 500, NASDAQ and the Russell 2000— including the dates each reached new highs. Data if according to CNBC.com and based on prices at the close of business on Friday, Aug.3, 2018.

–DJIA 3.01% YTD up from previous week’s return of 2.96%.

• 1 yr Rtn 15.60% from the previous week’s 16.55 %

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 6.24% YTD up from last week’s 5.43%

• 1 yr Rtn 14.89%  up from last week’s 14.03%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ 13.16% YTD up from last week’s 12.08%

• 1yr Rtn 23.21% up from last week’s 21.38%

Nasdaq reached a new 52-week high on July 25, 2081 of 7,933.32. The previous high was reached on July 17, 2018 of 7,867.15.

 

-Russell 2000 8.98% YTD up from last week’s 8.32%

• 1yr Rtn 19.08% upfrom last week’s 16.38%

The Russell 2000 reached a new 52-week high on July 10, 2018 of 1,708.56. The previous high was reached on June 20, 2018 of 1,708.1.

 

-Mutual funds

From the week ending July 26, 2018:

Pick your fund type Pick any sized cap and as long as “large” is in part of it’s name, your investments are doing double-digit well, so far this year.

At the close of business on Thursday, July 26, 2018, the average total return performance for funds that fall under the U.S. Diversified Equity Funds heading was 6.96%, according to Lipper. That’s up from the previous week’s average of was 6.49%..

There are a total of 20 different fund category types included under that broad heading representing 8,404 funds. And, there are now four different categories with double-digit average y-t-d returns. They include: Small-Cap Growth Funds, 16.67%; Large-Cap Growth Funds, 14.17%; Multi-Cap Growth Funds, 12.76%; and Mid-Cap Growth Funds, 12.35%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

• Heads up on yields

 Fixed-income is a big deal here in America and the easiest way to keep on top of what’s happening in that world is to watch the changes on the 10-year Treasury.

Anyone with an adjustable rate product, such as a mortgage or equity line of credit, understands firsthand that a blip on rates one way or another impacts the amount owed on his or her monthly payment requirement.

So, while the 10-year Treasury yield has been basically in that 2.9-something area for a long while now, 3% isn’t far away. And maybe even 4% is on its way.

Jamie Dimon, CEO of JPMorgan Chase & Co. said last week he thinks the  yield on the 10-year Treasury  ought to be 4 percent, with 5% to follow.

“I think rates should be 4 percent today, “ Dimon is quoted as saying in a recent CNBC.com story. “You better be prepared to deal with 5 percent or higher—it’s a higher probability that most people think.”

Ok Jamie, we hear you.

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