Thursday, August 25, 2016

Sales Down, Prices Up

After four straight months of strong gains, U.S. home resales finally fell in July, and by more than was expected. Existing home sales declined 3.2 percent to an annual rate of 5.39 million units last month, the National Association of Realtors said.

The NAR blamed the drop in sales on the small number of properties on the market. The upside of that: The median house price rose by 5.3 percent from a year ago.

A separate report from the Federal Housing Finance Agency showed house prices rose 1.2 percent from the first quarter to the second quarter. They were up 5.6 percent from the second quarter of 2015.

Wednesday, August 24, 2016

Beating Google

It was 12 years ago this month the Google (now known as Alphabet) had its IPO.  Since that IPO 12 years ago, Google has gained 1,781 percent, compared to a gain of 99 percent for the S&P 500.

Surprisingly enough, that's not the best stock performance over that period. In fact, there are ten current members of the S&P 500 that are up more than Google since the date of its IPO.  Leading the way higher, shares of Monster Beverage are up over 11,000 percent.  Priceline and Illumina are both up triple Google’s gain. 

Regeneron, Apple, and Netflix are all up over 4,000 percent in that time frame.  Overall, there are 23 current members of the S&P 500 that are up more than 1,000 percent since the Google IPO.

Tuesday, August 23, 2016

The Fallout From Rising Oil

Rising energy prices have offered good news to the shares of energy companies that have been hamstrung by plunging oil prices. In contrast, though, one sector among the S&P 500 isn’t eager to applaud the oil rally: telecommunications.

Telecom stocks have performed the worst among the S&P 500’s ten sectors since August 2, when oil prices bottomed out. According to S&P Dow Jones Indices, for every 1 percent increase in the price of oil, the telecom sector declines by two-tenths of a basis point.

The energy and materials sectors are the most obvious beneficiaries of gains in crude oil prices. More surprisingly, the technology sector also benefits: It rises an average of 21 basis points for every percentage point climb by crude.

Monday, August 22, 2016

Trouble in New Jersey

The Labor Department released its state-by-state employment figures on Friday. New Jersey is pretty much average as far as jobs are concerned: The state's unemployment rate is 5.2 percent, just a little above the the national average of 4.9 percent.

But the trend is going in the wrong direction. The Garden State's unemployment rate is up from 5.1 percent in June and has risen from 4.3 percent in February.

The state with the lowest jobless rate is South Dakota, where unemployment sits at just 2.8 percent. The highest unemployment rate in the nation can be found in Alaska, where it's 6.7 percent.

Friday, August 19, 2016

Oil Is Coming Back

With little fanfare, the price of oil reached bull-market status yesterday, completing the turnaround from a bear market dive in just three weeks. Crude is now up 22 percent since it settled for just one day below $40 a barrel on August 2.

Prices are still down by more than half from when they traded above $100 a barrel in 2014, but they are also up more than 80 percent from just six months ago. That's when they crashed to a decade low of less than $30 a barrel.

The price of light, sweet crude for September delivery has now risen for six straight trading sessions. It's up 16 percent in that span, oil's longest and biggest winning-streak by percentage since April.

Thursday, August 18, 2016

A Divided Fed?

According to the minutes released yesterday, Federal Reserve officials at their July meeting were relieved that their concerns over Brexit and the job market eased. But as for the big question on interest rates, they were divided over whether that meant they should quickly raise them again.

Fed officials voted 9 to 1 to hold rates steady at the meeting. According to the minutes, two Fed officials pushed for a rate hike at the meeting, but more officials judged it was a good idea to wait for additional information.

Fed officials in recent days have stressed that a rate hike could come at any of the three remaining meetings this year — in September, November or December. New York Fed President William Dudley said earlier this week that a rate hike in September was possible, but the minutes  said simply that Fed officials would be “open” and “flexible” about when to take another step.

Wednesday, August 17, 2016

Medical Costs for Retirees Keep Rising

A 65-year-old couple retiring this year will need an estimated $260,000 to cover health care costs in retirement, a 6 percent increase over the 2015 calculation, according to Fidelity’s new Retiree Health Care Cost Estimate. Not surprisingly, this is the highest figure since Fidelity started making these estimates in 2002.

Fidelity based its estimate on a hypothetical 65-year-old heterosexual couple retiring in 2016, with life expectancies of 87 for the woman and 85 for the man, and warns that costs could be more or less depending on actual health status, location and longevity. The estimate was net of taxes.

Fidelity also looked at costs associated with long-term care. Given that Medicare covers long-term care costs only in limited circumstances, Fidelity estimated that a 65-year-old couple would need $130,000, in addition to savings for retiree medical expenses, to insure against long-term care expenses.