Monday, November 18, 2019

Another Record for the Bull

By one measure, this current bull market in history is now the best ever. The current market boom has recorded a whopping 472 percent gain for the S&P 500. That makes this the biggest-returning bull run since World War II, according to research from the Leuthold Group.

The previous record was set by the bull market from 1949 to 1956, which scored a 454 percent gain for the S&P 500. The explosive bull run in the 1990s saw the S&P 500 rally 391 percent, while the bull market of 2002–2007 pulled off a 121 percent gain for the index.

The current run has already been recognized as the longest bull market in history. The S&P 500 bottomed out on March 9, 2009, which means we have been in a bull market for more than ten and a half years now.

Friday, November 15, 2019

Uber vs. New Jersey

A few weeks ago, we mentioned the rough quarter Uber had, losing more than a billion dollars. Now they're in trouble here in New Jersey: Uber Technologies Inc. owes the state about $650 million in unemployment and disability insurance taxes because it has been misclassifying drivers as independent contractors.

Uber and subsidiary Rasier LLC were assessed $523 million in past-due taxes over the last four years, the state Department of Labor and Workforce Development said in a pair of letters to the companies. There's another $119 million due in interest and penalties on the unpaid amounts.

The state’s decision is limited to unemployment and disability insurance, but it could also end up meaning that Uber is required to pay drivers minimum wages and overtime under state law. Uber’s costs per driver (as well as those of Lyft) could jump by more than 20 percent if they are forced to reclassify workers as employees.

Thursday, November 14, 2019

Where the Inflation Is

The Labor Department said on Wednesday its consumer price index increased 0.4 percent last month, the largest gain in the CPI since March. Energy accounted for more than half the increase, but Americans paid higher prices for gasoline, used cars, medical treatment and recreation in October.

Gas prices surged 3.7 percent in October, but Americans are still paying less to fill up now than they did a year ago, with the cost of gas about 7 percent lower. Prices for medical care rose 1 percent in October, marking the biggest increase in more than three years. The cost of recreation — ticket prices, cable TV and the like — also posted an increase of 0.7 percent, the biggest monthly gain since 1996.

The increase in the cost of living over the past 12 months edged up to 1.8 percent from 1.7 percent. But that means it’s still well below last year’s peak of nearly 3 percent.

Wednesday, November 13, 2019

The Rare Flat Dow

Here's an anomaly for you: The Dow Jones Industrial Average closed at precisely 27,691.49 yesterday, which means the index produced its flattest finish since April 24, 2014, according to Dow Jones Market Data. The Dow had closed at 27,681.29 on Friday, which means it rose just over 10 points yesterday, which rounds off to 0.00 percent.

Finishing a session virtually unchanged is a rarity; before that date in 2014, it hadn't happened in 12 years. The last time the index finished flat after a record close was 1994, according to Dow Jones Market Data.

Flat finishes were more common for the Dow before 2001. That's the year that the New York Stock Exchange converted to the decimalization quote system, allowing investors to trade in increments of pennies, rather than the old system of eighths or sixteenths of a dollar.

Tuesday, November 12, 2019

Where Volatility Is Headed

Has the volatility washed out of this market? The CBOE Volatility Index, or VIX, which is widely considered to be the best volatility gauge in the market, hit its lowest level since July at the end of last week.

Moreover, short bets on VIX futures contracts hit a record high last week. Typically, when markets are at a record high, traders tend to load up on VIX calls to bet on a downturn. But this time, they are betting on further stock gains and even lower volatility.

This isn't necessarily good news. A lot of market-watchers see this as a contrarian indicator, thinking that when you see a huge amount of excessive optimism in the market, you often tend to get a snap back in the other direction.

Monday, November 11, 2019

Thoughts for Veterans Day

“To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory.”  ~ Woodrow Wilson

“Only the dead have seen the end of war.” ~ George Santayana

“Veterans know better than anyone else the price of freedom, for they’ve suffered the scars of war. We can offer them no better tribute than to protect what they have won for us.” ~ Ronald Reagan

Friday, November 8, 2019

A Little More for the 401(k)

There's a little good news for taxpayers out this week from the IRS: The amounts that people can contribute to retirement plans have, for the most part, inched up for 2020. Employees in 401(k) plans would be able to contribute as much as $19,500 in 2020, up from $19,000.

Participants in 403(b), most 457 plans and the federal government’s Thrift Savings Plan will also see their contribution increased to $19,500. The catch-up contribution limit for employees 50 and older who participate in these plans will increase to $6,500 from $6,000.

One that didn't step up: The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over also remains $1,000.