New Year's Resolutions

Are you planning to make a New Year’s resolution tonight? According to a study by Fidelity Investments, 37 percent of Americans are considering making a financial resolution in 2016, up from 31 percent in 2015. The kicker is that most of those who made such resolutions last year consider themselves to be in better financial shape today.

What do these resolutions consist of? By far the most popular was resolving to save more in the new year, which was cited by 54 percent of those surveyed. Another 19 percent vowed to spend less, and 16 percent said they wanted to pay off debt. Paying down credit card debt reached an all-time high of 11 percent in the annual study, compared with just 5 percent last year.

For those whose top priority was saving, 63 percent said they preferred to set aside money for long-term goals — such as college, retirement and health care — up from 57 percent in 2014. No matter your goals and plans, here’s hoping you have a happy and healthy new year.

Big Winners of 2015

Yesterday we took a look at the S&P 500's biggest losers of 2015. The other side of the coin is Netflix, the top performing stock in the S&P 500 this year. It opened the year at 49 and is now sitting at around 119, for a gain of a stunning 144 percent.

In second place is Amazon.com, which is up 114 percent on the year. Like Netflix, Amazon.com is in the S&P 500's consumer discretionary sector, which ended up being the best-performing sector of the year. It's up 9 percent in 2015.

In third place is the video game company Activision Blizzard, which could also be considered a consumer discretionary stock but is classified by S&P as an information technology company. It's up about 95 percent on the year.

The Biggest Losers of 2015

There are still a couple of days left in which things could turn around, but as it stands, it looks like the biggest loser in the S&P 500 this year will be Chesapeake Energy. The Oklahoma City-based energy exploration company opened the year at 19.42 but tumbled along with oil prices throughout the year. It's now at 4.07 - losing 79 percent of its value in a single year.

Close behind Chesapeake were a couple of other oil & gas stocks. Southwestern Energy has lost 75 percent of its value this year, and Consol Energy has lost 74 percent. All told, the S&P 500's energy sector is down 22 percent for 2015.

The biggest loser not in the energy sector was Freeport-McMoRan, which has lost 67 percent of its value. Although it's technically in the materials sector because of its extensive mining operations, Freeport also is involved in the oil & gas industry.

The Santa Claus Rally

The markets saw a little bit of what is commonly known as the Santa Claus rally last week. As often happens around the holidays, the S&P 500 index surged in the week leading up to Christmas by 2.4 percent, although on very little volume. That was enough to inch the S&P into positive territory for the year, although just barely - it's up by 0.1 percent.

This is typically a good time of the year for the stock market. According to the Stock Trader's Almanac, over the past 40 years, the S&P has risen by an average of 1.4 percent in just the week between Christmas and New Year's.

That sets us up for January, which has historically been a good month for stocks, as well as a barometer for the rest of the year. Since 1950, January has seen an average return in the S&P of about 1 percent.

Thoughts for Christmas Day

"Christmas is the gentlest, loveliest festival of the revolving year — and yet, for all that, when it speaks, its voice has strong authority." ~ W.J. Cameron

"Our hearts grow tender with childhood memories and love of kindred, and we are better throughout the year for having, in spirit, become a child again at Christmas-time." ~ Laura Ingalls Wilder

"Christmas is not as much about opening our presents as opening our hearts." ~ J.L.W. Brooks

The Source of New Holiday Ideas

Have you been overwhelmed this holiday season with having to come up with new ideas for cooking and decorating and celebrating? Fear not, for a new study has found that people can generally ome up with more creative ideas than they expect.

In a study conducted at two business schools, 24 students were given 10 minutes to think of dishes to serve at Thanksgiving. After they had done that, the students had to predict how many more ideas they could generate if they kept going for 10 more minutes. Then they were asked to try to generate ideas for another 10 minutes.

On average, the students predicted they could generate around 10 new ideas if they stuck with it for a whole. But when pressed, they were actually able to come up with around 15 more ideas. The researchers also found that the ideas generated while persisting were, on average, more creative than the initial ideas. So stick with it!

The Aging Population and Health Care Jobs

An estimated 10,000 Americans turn 65 every day as the baby boom generation reaches retirement age, while the number of school-age children has been falling.  From 2009 to 2014, the population ages 5 to 18 fell by 1 percent. That has meant a big shift in employment figures.

As the Labor Department reported recently, the health care industry has become  widespread source of jobs in America. The economy added 638,000 jobs in the education and health services industry sector between November 2014 and November 2015, the bulk of them in health care. Twenty-one different states added at least 10,000 in the sector over the past year.

The biggest states for this sector have been California, Texas and New York, which added 71,000, 63,800 and 72,100 respectively over the previous 12 months. With its many retirees, Florida added 46,900 jobs in the sector.

Wages Picking Up?

Unemployment has been falling steadily for about six years now, but wages haven't really kept pace. For the past five years, annual wage increases have averaged a meager 2 percent, but many economists feel that salaries are about to pick up.

Here's why: Joblessness has fallen to a seven-year low of 5 percent from a 26-year high of 10 percent in 2009. Because of that, there are now 1.5 unemployed job seekers for every posted opening, down dramatically from a 2009 high of 6.8. That's even lower than the level at the end of the last economic expansion.

Some people have already seen the benefits of the tighter labor market: workers are showing more willingness to leave a job. The quits rate, which shows the willingness of employees to leave their jobs, was at 1.9 percent in October, up from 1.3 percent in 2009 and nearly at the 2 percent average we saw during the last expansion.

A Rocky December

The Dow industrials dropped a whopping 370 points on Friday at the end of a historic week. Between the continuing drop in oil prices and the Fed raising interest rates for the first time in almost a decade, it is shaping up to be the most volatile December for the Dow Jones industrial average since 2008.

So far in December, the Dow has registered 12 days with moves of 100 points or more between one day’s closing bell and the next - five up moves and seven down moves. In December of 2008, there were a total of 13 such days.

December 2008 was just after the Lehman Brothers and Bear Stearns meltdowns. But even that December, as volatile as it was, looked better than this one. That December saw seven up days where the Dow moved up by at least 100 points, and six where it moved down by that much.

Investors Are Getting Nervous

The ups and down of the stock market are starting to have an effect on investors' attitude. According to a new Wells Fargo/Gallup Investor survey, 62 percent of all U.S. investors now say they are concerned about the stock market's volatility.  In February, before the market fluctuations in late summer and fall, a bare majority of 53 percent expressed concern.

Eighteen percent of U.S. investors now say they are "very" concerned about market volatility, and another 44 percent are "somewhat concerned." Those numbers are both up slightly from 14 percent and 39 percent, respectively, in February.

But the long term still looks pretty good. At the same time, 43 percent of those surveyed now say they have "a great deal" or "quite a lot" of confidence in stocks as a place to save and invest for retirement. That's actually up from 40 percent in February.

Interest Rates Going... Down?

As expected, the Federal Reserve raised its benchmark interest rate yesterday, hiking the Fed funds rate by one quarter of one percent. At the same time, though, Fed officials lowered expectations for future interest rate hikes.

The Fed meeting is also the occasion for Fed officials to issue their interest rate projections for the upcoming years - the so-called dot plot. And some of those projections for 2017 and 2018 have been revised downward.

After October's meeting, for instance, one official saw rates going as high as 4 percent by 2017, but after this meeting, the highest 2017 projection has dropped under 3.5 percent. In October, three members projected rates in 2018 to be below 3 percent, but now, that number has increased to six.

The Looming Rate Hike

Today is the big day for the Fed: This afternoon, the Federal Reserve's Open Market Committee is expected to raise interest rates above the near-zero levels they've been at for the past seven years.  With unemployment at 5 percent and inflation at around 2 percent, the Fed probably sees the economy as strong enough for an interest rate hike.

A departure from a policy that has stood for seven years could be thought to be disruptive to the economy, but this probably won't be. For one thing, the markets have been expecting this for some time, and it's already baked in to most prices. As we noted the other day, mortgage rates have already risen in expectation of this.

The other thing to keep in mind is that the first rate hike is likely to be one quarter of one percent, or possibly one half. If it were a change from any other baseline - from 2 percent to 2 and a quarter, say - it would have minimal effect on the economy. This one is likely to as well.

Going Nowhere Fast

How frustrating has the stock market been lately? Even though the S&P 500 was up slightly yesterday, it has now gone the 28 straight trading days without making back-to-back gains. That is tied for the longest such streak since 1970, according to Kimble Charting Solutions.

Over the past 45 years, the S&P 500 has managed to go that long without consecutive increases just three times. It happened in 1970, 1994, and once earlier this year between February and March.

The good news is, this pattern typically precedes a rise in the market. Since 1970, the large-cap index has gone at least 25 sessions without consecutive gains on seven previous occasions. Six months later, it was up by an average of 5.3 percent.

The Fed and Mortgage Rates

Thie biggest financial news of this upcoming week will be the results of the Fed's Open Market Committe on Wednesday. The Fed is widely expected to raise interest rates at that meeting, which would move the benchmark fed funds rates above the near-zero level for the first time since Dember 2008.

How widely expected is it? You can already see interest rates starting to rise in various corners of the economy. Last week, the average interest on a 30-year fixed-rate mortgage rose to 3.95 percent, according to Freddie Mac. At the end of October, a month and a half ago, that figure was at 3.76 percent.

The 15-year fixed-rate mortgage has also been creeping up, rising by 0.03 percentage points in the last week alone. But that rate is still just at 3.19 percent.

Not Really Standing Still

Investors know by now that it’s been a flat year for stocks. Year to date, the S&P 500 has declined by less than 1 percent. But flat doesn't mean that the numbers have flat-lined - we've actually seen, in one sense, a record amount of movement.

The S&P has flipped between positive and negative territory for the year 24 times, according to data compiled by Bespoke Investment Group. That's a record number for that category. And of course we still have 14 trading days left.

If history is any guide, that sort of flip-flopping could bode well for 2016. Since 1928, the 12 years with the most number of crosses above and below the baseline for the year were followed by years where the S&P was up an average of 9.6 percent, compared to an average annual gain of 7.5 percent in that time frame.

The Fall of the Middle Class

Yesterday we discussed the growth in high net worth households in America. Another study out this week shows the other side of the coin: The middle class, even though it's growing in terms of households, has been losing wealth in recent decades.

In early 2015, there were 120.8 million adults in middle-income households, according to a new analysis of government data by the Pew Research Center. However, the share of income held by middle-income families has fallen from 62 percent to 43 percent in 2015. The wealth held by lower-income households has remained stable, while the share of income held by upper-income households rose to 49 percent in 2015 from 29 percent in 1971.

The last 15 years have been particularly difficult for middle class households. Thanks to the collapse in housing prices and the Great Recession, their median wealth — assets minus debts — fell by 28 percent between 2001 and 2013.

Where the Wealthy Are

The wealthy keep on growing: According to the U.S. Wealth Report 2015 released yesterday by Capgemini, the population of U.S. high net worth individuals, or HNWIs - defined as those with at least $1 million in investable assets aside from their residence - reached a record 4.4 million in 2014.That figure grew by 8.6 percent last year,  and overall U.S. HNWI wealth expanded by a 9.4 percent increase to reach $15.2 trillion.

While New York remains the city with the highest HNWI population overall, the numbers are actually growing much faster in other parts of the nation. The top six cities for HNWI growth were in Texas and the West Coast, driven in large part by a strong real estate markets there.

The city with the fastest growing HNWI population in 2014 was Houston, at 14 percent. Seattle was second  at 12 percent. Chiccago was the major city with the slowest HNWI growth.

Another Blow to the Energy Sector

Just when you thought it couldn't get worse for energy stocks, they took another beating yesterday. Light, sweet crude dropped nearly 6 percent, to $37.65 a barrel, and several oil & gas stocks plummeted by 10 percent or more on the day. What happened?

• OPEC announced Friday that it was going to continue producing oil at near-record levels, despite the glutted market.
• Weather forecasts released Monday continued to show above-average temperatures in the next two weeks, putting a damper on expected purchases of heating fuel.
• Many oil and gas companies had taken on large debt loads to fund domestic drilling projects when prices were higher; oil companies with heavy debt loads saw their stocks hit especially hard in the downturn.

Happy in Retirement

We talk a lot about preparing financially for retirement, but there's some good news in the University of Michigan's recent Health and Retirement Study that should help ease a lot of worries. According to the survey, about 56 percent of retirees say they are very satisfied with retirement. Another 34 percent say they are satisfied, while only 9 percent say they aren’t at all satisfied.

On top of that, retirees also tend to become increasingly happy as they age in retirement. In the most recent survey, 21 percent of retirees aged 60 reported that they were not satisfied at all with retirement, as opposed to only 3 percent of retirees aged 90.

Not surprisingly, retirement happiness increased with wealth, income, and education level. But the most important driver of retirement satisfaction was self-assessed health status.

The November Jobs Report

November's jobs report couldn't have been more on the nose with recent trends. The Bureau of Labor Statistics said nonfarm payrolls increased by 211,000 jobs in November; the economy has added an average of 210,000 jobs a month this year. The headline unemployment rate was unchanged at 5 percent. 

On top of that, the October number was revised upward to 298,000  from the previous estimate of 271,000, and September was revised from 137,000 to 145,000. The consensus seems to be that the report gave the Federal Reserve plenty of confidence in the economy, and enough reason to raise rates later this month.

The construction industry led last month’s job creation, adding 46,000 jobs, while retailers added 31,000. But mining, which includes oil and gas extraction jobs, continues to reel: It lost 11,000 jobs last month, and is down 123,000 since December 2014.

State Spending

Personal consumption expenditures grew by about 3.5 percent in New Jersey in 2014, below the national average of 4.2 percent, according to a new study released by the Commerce Department. One reason our spending grew more slowly than those of other states is that it was already very high: At $9,128, New Jersey's annual spending on housing and utilities per capita is second highest in the nation, trailing only Maryland.

Expenditures on housing and utilities were the fastest-growing category in the nation last year, rising by 4.1 percent. Spending on health care was close behind, at 3.9 percent. Spending on gasoline and energy, meanwhile, dropped by 2.9 percent nationwide.

The state where overall spending grew the fastest in 2014 was North Dakota, where it was up 7.2 percent. In West Virginia, spending grew by just 2.1 percent, dead last among the 50 states.

Let's Make a Deal

The volume of mergers & acquisitions hit an all-time high in October of this year, a record that lasted all the way until November, when another new mark was reached. According to Dealogic, announced M&A volume for the month of November came in at $606.6 billion, which was up 7 percent from  October's record amount.

The biggest driver was the $160 billion merger between pharmaceutical titans Pfizer and Allergan, which is the second-largest deal on record. But there were a total of 11 deals valued at $10 billion or more last month, the highest such number on record.

Not surprisingly, we're headed for an annual record as well. By the end of November, Dealogic said that global M&A had hit $4.26 trillion, and the record for full-year volume is just $4.3 trillion, reached in 2007.

A Good Month for Small Caps

As we turn the calendar into December, if you're looking for a bargain in stocks, small companies appear to be the best bet. The market as a whole has posted positive returns 18 out of the past 20 years in the period between November 20 and the end of the year, but the Russell 2000, the benchmark for small-cap stocks, has risen an average of 5.6 percent during that period. The Russell 1000 large-cap index has risen by just 3.4 percent in that same stretch.

If you're not ready to get into the market just yet, that's all right. Research has found that most of that growth happens in the second half of the month. Since 1987, the Russell 2000 gains 3.5 percent on average in the last half of December versus 1.9 percent for the Russell 1000.

And the small-cap effect even limps along into January. Gains for that month since 1987 are 0.6 percent for the Russell 2000, and 0.5 percent for the Russell 1000.

A December to Remember

Today is the last day of November, and it could be a record one for the auto industry. Powered by Black Friday sales, this month could be the best November ever for U.S. auto sales, according to forecasts from TrueCar and Edmunds.com.

Even more important, we're on pace to set an all-time record for more new cars sold in a year. LMC Automotive said last week that it is increasing its forecast for the year by 200,000 units to 17.5 million. That would edge out the previous all-time high of 17.402 million, which was set in 2000.

It's good that we're seeing all this activity now. The New York Fed took a look at what happens to car sales when interest rates rise, as many expect to happen in December. Just a one-percentage point increase in a consumer’s interest rate raises the cost of a four-year, $25,000 loan by $11 per month. or $528 over the life of the loan. That's enough, the Fed found, to reduce auto production by an annualized rate of 12 percent, or a decline of around 170,000 fewer cars and trucks produced.

Gloomy Friday

As Black Friday looms, the question on most economists' minds is, What kind of holiday retail season are we in for? Here's one negative sign: Consumers report slightly lower intended holiday spending in 2015 than they reported in 2014, according to the 16th annual holiday spending survey conducted by the Consumer Federation of America and Credit Union National Association. 

In this year's survey, 38 percent of the respondents said they would reduce their spending this year, up from 33 percent last year. Both this year and last, 10 percent of those surveyed said they would spend more.

People do feel a bit more confident of their economic security this year, though. For the first time since the question was asked back in 2012, more than half of those surveyed said they had sufficient extra funds to “pay for an unexpected expense of $1,000."

Thoughts for Thanksgiving Day

“Be thankful for what you have; you'll end up having more. If you concentrate on what you don't have, you will never, ever have enough.” ~ Oprah Winfrey

“We have been the recipients of the choicest bounties of Heaven; we have been preserved these many years in peace and prosperity; we have grown in numbers, wealth and power as no other nation has ever grown.” ~ Abraham Lincoln

"When asked if my cup is half-full or half-empty, my only response is that I am thankful I have a cup." ~ Sam Lefkowitz

Enter the Earnings Recession

It's official: We are in an earnings recession. With 98 percent of the S&P 500 companies having reported third-quarter earnings, profits shrunk by 1.7 percent, according to FactSet. They fell 0.4 percent in the second quarter, and the two consecutive quarters of contraction fit the common definition of an earnings recession, just as two consecutive quarters of shrinking GDP constitute an economic recession.

It may not get better any time soon. FactSet’s projections for the fourth quarter forecast another contraction, with S&P 500 earnings expected to be down another 4.3 percent.

The primary culprit in all of this is the energy sector, reeling from the falling price of oil. Energy sector profits fell 57 percent in the third quarter, after falling 56 percent in the second and 57 percent in the first. Goldman Sachs estimated that S&P 500 profits will rise 10 percent in 2016, largely because they expect a recovery in energy profits.

GDP Notches Upward

Good news out this morning from the Bureau of Economic Analysis: The second revision to the third quarter GDP number shows that the economy expanded at a rate of 2.1 percent. The first estimate for that figure had been a somewhat disappointing 1.5 percent.

The upward revision to GDP was primarily caused by an upward revision to private inventory investment. American business' investment in their inventories declined in the third quarter - but by a much smaller margin than was previously estimated. Businesses accumulated $90.2 billion worth of inventory in the third quarter, instead of the $56.8 billion reported last month.

Some downward movement: Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 3.0 percent rate, down from the 3.2 percent rate estimated last month. Growth in exports was also revised downward, to a slower 0.9 percent rate of increase.

The Global Dividend Picture

The third quarter was a big one for dividends around the world, according to figures compiled by Henderson Global Research. There was nearly $300 billion paid out in the quarter, up 2.3 percent from the same period a year earlier.

The rise among North American stocks was even stronger than that. There was $116.5 billion paid out in dividends by North American companies, an increase of 20 percent from the year earlier. That includes $10 billion paid out by Kraft and Heinz as part of their merger.

But the most dramatic increase was in Japan, where the yearly increase was a whopping 70 percent. Meanwhile, Henderson warns that in China, dividends might decline in 2015 for the first time ever.

New Businesses Creating Fewer Jobs

There's a disquieting statistic out this week from the Labor Department that might explain why the economy still doesn't feel like it's firing on all cylinders. The number of jobs created by new businesses is down 18 percent from a decade ago. And it's still falling: That figure is down 7 percent from the fourth quarter of 2014.

At the same time, the number of job losses due to business closures is down 21 percent from 2005. It looks like the current economy is incurring less risk-taking on either side of the equation.

Another factor is that small businesses still don't have as much access to capital as they once did. Banks held roughly $590 billion of small-business loans in the third quarter, according to the FDIC, which is down 17 percent from 2008.

Is the Fed Ready to Raise Rates?

Rising interest rates in December became a much stronger possibility yesterday, when the Fed released the minutes from its last meeting. The central bank released a statement explicitly saying it would consider raising rates “at its next meeting” in mid-December. That’s the most direct statement we’ve had yet on the subject, ever since interest rates went to near-zero back in 2008.

The new statement said the Fed would be “monitoring global economic and financial developments.” That seems like a far less cautious statement than it issued in mid-September, when the Fed warned that “recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.” 

Fed officials say they want to be “reasonably confident” that U.S. inflation will rise back to 2% before they begin raising rates. October’s inflation reading was the first positive one in three months – potentially the last step toward the Fed raising rates.

Signs of Inflation

After it had fallen slightly for two months in a row, the consumer price index rose by 0.2 percent in October, according to figures released by the Labor Department yesterday. Even excluding the normally volatile food and energy categories, so-called core prices also grew 0.2 percent for the month. 

Those core prices have risen 1.9 percent on the year, led by increases in the cost of shelter and medical care. For the past 12 months, overall prices have risen just 0.2 percent, tamped down by falling energy prices. 

But energy prices have been hugely deflationary. Overall, energy prices have fallen by 17.1 percent in the past year. On the other hand, energy prices actually rose by 0.3 percent in October, and gas rose by 0.4 percent. 

Foreclosures Coming Back

Home foreclosures in America peaked at more than a million in 2010, as the aftereffects of the housing bubble and the recession cost a lot of people their houses. The numbers dropped sharply from there, though, sinking to 327,000 total in 2014.

But in a somewhat alarming development, they're on their way back up. According to real estate data tracker RealtyTrac, lenders are on a pace to foreclose on 445,000 homes this year. That's a whopping 36 percent increase over last year.

Part of that is lingering foreclosure cases that never got settled after the housing bubble burst. But it also shows that many homeowners are still unable to keep up with their mortgage payments.

Signs of Retail Distress

Some sobering news as we head into the holiday shopping season: This earnings season was a brutal one for some of America's biggest retailers. Big department stores Nordstrom and Kohl's were down 15 percent and 6 percent, respectively, making them some of the biggest decliners in the S&P 500 Friday.

After Nordstrom reported its third-quarter results on Friday, its shares lost a fifth of their value before bouncing back somewhat. For the third quarter, Nordstrom reported a slowdown across all categories, regions and channels, including online, at both its full-priced department stores and its off-priced Rack locations.

Is there a reason for the slowdown? Analysts think that consumer spending habits may be shifting, with buyers moving away from smaller expenditures but still willing to spend on big-ticket items like cars and smartphones. We'll see how that affects the holiday shopping season; Black Friday is less than two weeks away.

Back to the Hearth

The recession forced a lot of economic data back to the early days of the decade - but back to the 1940s? That's what a new study from the Pew Foundation found: In part because of economic woes, there's a larger share of young American women living with family now than at any time since 1940.

As of last year, the share of women aged 18 to 34 living with family had climbed to 36.4 percent. That figure had previously peaked in 1940, when 36.2 percent of young women lived with their parents or other relatives. By 1960, just 20.4 percent of women lived at home, the low point for this number.

But it spiked during the Great Recession, leading us back to the 1940 number. It's not just job problems: Women today are five times as likely to be enrolled in college than in 1940, and college students are significantly more likely to live with family than young adults who aren’t in school.

Cyberfraud Bust

The big news yesterday was that indictments were announced against a team that  had been hacking into valuable financial information at big institutions like J.P. Morgan and E*Trade. Some 100 million people had sensitive information stolen, resulting in $100 million that the criminals had stashed in Swiss bank accounts.

Federal prosecutors are calling it a  “diversified criminal conglomerate” that employed 270 employees and resulted in 75 shell companies. The criminals ran a gamut of illegal activities, including pump-and-dump stock schemes, illegal Internet casinos and an unlicensed bitcoin exchange.

Yesterday's announcement linked the current case to last year's breach of information at J.P. Morgan. At that point, we knew that hackers broke into J.P. Morgan’s networks and made off with the contact information of more than 83 million customers.

Veterans Day

Today is Veterans Day, the anniversary of the armistice that ended World War I and the day we salute the men and women who have served our country in uniform. It's sort of a half-holiday for the markets: The stock markets are open, but the bond markets are closed.

There's a logical reason that no bonds would be traded today. Since Veterans Day is a federal holiday, the U.S. Treasury Department is closed for the day as well. Given that Treasury bills are such a significant part of a typical day's bond-trading activity, it makes sense that the bond market would shut down.

Stocks have never taken a Veterans Day holiday, but they did used to observe Veterans Day with a brief two-minute shutdown. That ended in 2007, so now, for stock traders, Veterans Day is business as usual.

The Retirement Battle of the Sexes

There's a fascinating new study out from Vanguard looking at the difference in retirement savings habits between men and women. Matching up job tenure between the genders, Vanguard found that women tend to save at greater rates than men, at all income levels.

But they don't have as much retirement savings, for a simple reason: Men make more money. For 2014, the median income for men in the study was $74,590, while for women with equal tenure on the job, it was $56,264.

The result is that despite the higher savings rate, women had a median retirement account balance of $24,446, while men had $36,875, a difference of about 34 percent. This is despite the fact that women and men tend to have very similar portfolios, taking similar amounts of risk with their investments. 

Tough Times for 401(k)s

The markets took a spill in the third quarter of this year, and that poor performance is now starting to show up in reports of retirement account balances. According to Fidelity Investment’s analysis, balances in both 401(k) and IRA savings fell in the quarter.

The average 401(k) balance fell to $84,400 at the end of the third quarter, from $91,100 in the previous quarter. The average total 401(k) contribution amount fell slightly, to $2,610 from $2,770 in the second quarter. IRA balances fell to $88,700 from $96,300 at the end of June.

But it's also easy to make too much of these short-term numbers. Despite all the turmoil in the markets and the slight drop in contributions, 401(k) balances still increased over the course of the year. A year ago, the average balance had been $89,100.

A Strong Jobs Report

The economy seemed to get back on track in October, according to the monthly job figures released this morning by the Bureau of Labor Statistics. We added 271,000 jobs for the month, making it the strongest month for new employment all year. The headline unemployment rate dropped from 5.1 percent to 5.0 percent.

October's number is nearly double the one from September, which was revised upward to 142,000 jobs in today's report. The previous high for the year before October had been the 266,000 jobs we added in February.

The industries contributing the most to the month's job growth were professional and business services, which added 78,000 jobs; health care, which added 45,000; and retail, which added 44,000. In another positive sign, hourly worker earnings rose by 9 cents in October. 

A Rough Earnings Quarter

This U.S. earnings season is on track to be the worst since 2009, according to data compiled by Bloomberg. With about three-quarters of the companies in the S&P 500 having reported results, profits are down 3.1 percent - the biggest quarterly drop in earnings since the third quarter 2009, and the second straight quarter of profit declines.

Not surprisingly, the biggest casualty is the energy sector, which is still dealing with sagging oil prices. That sector has endured a 54 percent drop in quarterly earnings so far this quarter. With the global drop in commodity prices, profits in the materials sector are down 15 percent.

The top-performing sector this quarter has been telecom services, which has seen earnings growth of 23 percent. Consumer discretionary isn't far behind, at 19 percent.

Raising the Steeple

Here's a corner of the American economy that doesn't get much attention, but may be on the upswing: The construction of U.S. religious buildings – including churches as well as synagogues, temples, mosques and other structures – has bounced up this year after being in decline for more than a decade, according to construction-data firm Dodge Data & Analytics.

Religious construction peaked way back in in 2002, with 51.9 million square feet of new space It then began a steady decline, even before the recession started, and Dodge estimates it will hit 9.3 million square feet this year, down 82 percent from that 2002 peak.

In dollar terms, spending on religious construction fell 9.1 percent in 2014. But through the first eight months of 2015, religious spending rose 2.3 percent compared with the same period in 2014. That;s the first increase for this industry in a very long time.

It's Buyback Season

If you're a fan of stocks that buy back their own shares, now is the time of year to start paying attention to the market. For the past few years, November has been the busiest month of the year for company share repurchases, according to research from Goldman Sachs Group, with 13 percent of all buybacks happening in that month.

On top of that, December is tied for the third-most active month. So from now till the end of the year, historically speaking nearly 25 percent of all company share buybacks are likely to happen.

That may be part of the reason that November and December tend to be a strong time for stocks. Since 1971, November has been the fourth best month for the Dow Jones industrial average, gaining an average of 1.2 percent, and December has been the second best month, gaining an average of 1.7 percent.

Hotels Are Going Up

Even though it's been a year when the overall economy has not been especially impressive, there are industries that still shine through. Case in point: The American hospitality business, which is headed for its best year ever.

The year-to-date occupancy rate for hotels is at 67.7 percent, which is up from 66.6 percent in 2014. The best year in history for this figure was 2000, when it was at 67.1 percent for the entire year, before 9/11 and the recession helped to depress it for over a decade.

Investors have noticed this growth. According to the latest GDP figures from the Commerce Department, investments in lodging - new hotels and the like - are up 39 percent  this year.

Back to Home

Has America's homeownership rate bottomed out? In the third quarter, the homeownership rate ticked up slightly, to 63.7 percent from 63.4 percent the previous quarter. It's still near its lowest point in 30 years, but it appears to have plateaued, and many economists think it may not go much lower.

The number of homeowner households increased by 123,000 in the third quarter from a year earlier. At the same time, the number of renter households increased by 1.3 million.

The latter figure may be holding back the rate of homeownership. Home prices are rising faster than incomes, forcing many would be homeowners to continue renting. And there's plenty of supply: The vacancy rate for rental housing rose to 7.3 percent from 6.8 percent in the second quarter.

GDP Hits a Bump

The economy slowed down in the third quarter, growing at just 1.5 percent, according to figures released this morning by the Commerce Department. That was a disappointing figure, following the 3.9 percent growth the economy posted in the second quarter.

The biggest cuplrit was shrinking inventories. Commerce said the decline in private inventories was responsible for shaving 1.44 percent off the overall 1.5 percent growth rate. The good news is, those types of changes are generally transitory and don't carry over quarter to quarter.

Consumer spending was down slightly in the third quarter, dropping to 3.2 percent from 3.6 percent the previous quarter. But durable goods spending—long-lasting items such as washing machines and automobiles—continued to be strong, rising 6.7 percent.

Big Apple

The big news on Wall Street yesterday was the quarterly earnings report from Apple, and it did not disappoint. Apple said that its quarterly profit rose 31 percent, with fourth-quarter net income totaling $11.12 billion, up from $8.47 billion in the year-ago period. Revenue increased to $51.50 billion, up 22 percent from a year earlier.

The iPhone remains the key to Apple’s earnings, accounting for nearly 63 percent of the company's revenue in the quarter. For the quarter, Apple sold 48 million iPhones, outpacing sales of 39 million units a year earlier, with sales to China being a key driver.

Apple didn't disclose sales for its new Apple Watch, including those sales with the iPod, Apple TV and Beats accessories in its “other products” category. Sales of that segment rose 61 percent to $3.04 billion. The one downside: Sales of the iPad continued to slump, falling for a seventh straight quarter.

A Shortfall in Retirement

As baby boomers increasingly approach retirement, they're facing a huge shortfall in income, according to a new survey from BlackRock on attitudes about money and financial goals. People ages 55 to 64 who responded to the survey said they expected to have about $45,000 in annual income in retirement. But given the amounts they had actually saved, they would only provide an estimated annual income of $9,129.

Fewer than a quarter of these baby boomers regularly set aside money into long-term savings or investment plans. But they think they're ready. Nearly three quarters of the respondents said they feel financially secure and “prepared to pursue their dreams.”

Even affluent retirees—those earning more than $250,000 a year—hadn’t set aside enough to generate the income they said they needed to meet their retirement expectations. They need close to $60,000 per year to maintain their lfestyle, but have only saved enough to generate less than $40,000 per year.

Hard Times for Hedge Funds

Wth the stock markets and mutual funds having such an unimpressive year, you might think that investors would be flocking to hedge funds. But the opposite has been true. According to Hedge Fund Research, hedge fund assets actually fell in the third quarter this year.

Assets held in hedge funds dropped 3 percent in the third quarter, down 3 percent over that time, to a total of $2.87 trillion. That's the first quarterly drop in three years, and the biggest quarterly drop in six years, since the recession.

It wasn't really a case of investors withdrawing money from these funds. Investor deposits saw a net increase over that time, but because of the turmoil in the markets, hedge funds overall lost enough money to create the overall decline.

Earnings Fuel a Big Bounce for the S&P

Positive earnings reports helped the S&P 500 finish at its highest close in two months yesterday. Reports from some tech giants buoyed the entire market, which finished up 1.7 percent on the day.

Alphabet Inc., the new name of Google's parent company, handily beat the Street's earnings estimates, on the way to boosting its share price by 12 percent. Similarly, better-than-expected earnings lifted Amazon shares by 10 percent. For the moment at least, Amazon’s stock was at a record high.

But it wasn't quite enough to lift the S&P out of correction territory. The S&P 500 fell 12.3 percent from its May and all-time high to its low in August. For the correction to end, it needed to finish above 2054, but it fell just short at 2052.

Learning About LTC

Long-term care planning is topic that many investors prefer to avoid, according to a new survey from Lincoln Financial. The upshot is that very few people have talked to their financial advisors about whether long-term-care insurance is the right choice for them.

The survey  found that only about 20 percent of consumers have discussed long-term care with a financial professional. Just 17 percent of those consumers ended up buying an LTC insurance policy. LTC insurance isn't an optimal solution for everyone, depending on your overall financial situation, but it's a topic that everyone needs to carefully consider.

Interestingly enough, the survey found that consumers are more likely to recognize that need in a family member’s future rather than in their own. A third of the respondents said it was likely that a family member would need long-term care in the future, compared with 22 percent who said they would need it for themselves.

The High Cost of Dying

It’s not a subject most of us like to talk about, but paying for a funeral can be a weighty expense. And according to a new survey from the Consumer Federation of America, it can be a bit of a guessing game as well.

The CFA surveyed 150 funeral homes from ten different regions of the country.  The cost of a full-service funeral ranged very widely, from $2,580 to $13,800. More distressing, those prices can be hard to find. Only 38 of the 150 funeral homes surveyed fully disclosed their prices on their websites, and  24 of them failed to fully disclose prices even after an email and a phone call.

One of the regions was Mercer County here in New Jersey. There, the cost for a full-service funeral ranged from a low of $3,710 to a high of $6,605. A simple immediate burial ranged from $850 on the low end to $4,040 on the high end.

What Is China's Real GDP Growth?

China announced its official third quarter GDP growth figure as 6.9 percent yesterday, just a hair beneath the government's target of 7 percent. But is that a real figure, or have the Chinese books been cooked? There has been an awful lot of underlying data that suggests the latter.

Both exports and imports declined for China during the third quarter, and industrial production was weaker than expected. Factories have seen prices fall for 43 consecutive months, and fixed-asset investment decelerated in September. Electricity output is down 1.3 percent over the past year. All those signals point to a slowing economy.

So what is China's actual GDP growth? Many economists have begun paying more attention to these alternate growth measures, and most of them estimate that China's growth is currently somewhere between 4 percent and 5 percent.

A Peek Ahead at the Holiday Season

It's still thankfully a bit early to start seeing holiday sales at our favorite stores, but it's not too early for economist to make forecasts about what that holiday season is going to look like. And the International Council of Shopping Centers thinks it will be a positive one, with shoppers spending an average of $702 this year, up from $677 in 2014.

Among the categories of goods, the biggest gainer figures to be furniture and home furnishings, which are forecast to be up 4.9 percent over last year. Also predicted to be up by more than 3 percent are clothing, and health and personal care items.

Businesses are starting to get ready for the season as well. Macy's has already announced plans to hire 85,000 workers to handle the holiday crush.

Inflation Subdued

Inflation continues to run at a very low pace. In fact, the Labor Department said yesterday that its consumer-price index fell 0.2 percent between September and August. Core CPI, which strips out volatile food and energy prices, rose by 0.2 percent in September.

The price of gasoline fell by 9 percent in the month of September alone. The biggest price gainer over the month was shelter costs, which were up by 3.2 percent. The cost of food rose by 4 percent.

In fact, because overall inflation in the third quarter was so weak, Social Security recipients won’t get a cost-of-living adjustment next year. That's only the third time that has happened in the past 40 years.

Signs of a Slowing Economy

A couple of stats released by the government this week show the economy largely treading water in recent months. The Commerce Department said retail sales inched up by just 0.1 percent in September. The biggest driver was lower gasoline sales, which dropped by 3.2 percent. On top of that, sales in August - which had originally been thought to rise by 0.2 percent - were revised down to unchanged.

Excluding automobiles, gasoline, building materials and food services, retail sales fell by 0.1 percent in September. These are the so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product. After the initial August reading showed them growing by 0.4 percent, the figure for that month was also revised downward, dropping by 0.1 percent.

On top of that, U.S. business inventories were flat in August for a second straight month. This follows a rise in inventories increased of more than $100 billion in each of the previous two quarters - a record back-to-back quarterly increase.

Fear Strikes Out

It was only a couple of months ago that the stock market's fear gauge, formally known as the CBOE Volatility Index, was starting to reach scary heights. But that measure of the market's volatility fell for a tenth straight session Monday, to a below-average 16. The figure  is now at its lowest level in two months.

Only twice since 1990 has the VIX fallen for ten consecutive sessions: Once in October 2009 and another time in May 2005, according to a study from the research firm See It Market. Both times, the S&P turned positive for next three months, averaging a 3.1 percent return over that period.

Since bottoming out toward the end of September, the S&P 500 has gained 7.2 percent. If that 3.1 percent bounce holds to form, that would be roughly a 10 percent increase for the fourth quarter - not a bad end to a year that looked pretty shaky for a long time.

Smart Finances in the Garden State

Yesterday, we talked about what makes New Jersey one of the least tax-friendly states in the country, but we have some better news for you today. According to the personal finance web site GoBankingRates.com, New Jersey's residents are among the nation's best at managing their finances.

The study looked at each state's use of banking services, saving and investing behaviors, and financial education policies. It measured the portion of households with retirement savings accounts, reported investments in stocks, bonds, and mutual funds, the portion of households that reported having an emergency fund, and the rate of personal bankruptcies as well.

On those measures, the Garden State finished seventh, behind North Dakota, New Hampshire, Utah, Minnesota, Virginia, and South Dakota. At the very bottom of the list: Mississippi.

High Taxes in the Garden State

Some bad news for the Garden State: Kiplinger's magazine has once again this year named New Jersey as one of its Top Ten Least Tax-Friendly States. New Jersey finished third from the bottom, ahead of only California and Connecticut.

The most damaging issue is New Jersey's property taxes, which are the highest in the nation. The median home value in our state, $307,700, currently incurs a median annual property tax bill of $7,331.

On the bright side, our gasoline taxes, at just 15 cents per gallon, are the second-lowest in the nation. The only state with lower gas taxes is petroleum-rich Alaska, at 12 cents per gallon.

Earnings Stumble Out of the Gate

Earnings season kicked off this week with the traditional first reporter, Alcoa. Not only is Alcoa always the first to report its earnings each quarter, but its reports are considered something of a bellwether for the quarter ahead, Some studies show that it does project the overall direction of the market: When Alcoa beats expectations, the market tends to rise.

If that's the case, the news is not good. For the quarter, Alcoa earned $44 million, or two cents a share; a year ago, it earned $149 million, or 13 cents a share. Excluding certain items, the company earned $109 million, or 7 cents a share. That was well below the Wall Street consensus of 13 cents a share.

But expectations were very low to begin with. S&P 500 profits are expected to contract 5.6 for this quarter, which would be a second consecutive down quarter. The good news is, that makes upside surprises a little easier to come by.

What's Driving the Trade Deficit

The U.S. trade deficit widened to $48.3 billion in August, a 15.6 percent increase from the prior month. Except for one fulky labor-drive reading from this spring, the trade deficit was the largest it's been since March 2012.

U.S. exports of goods and services fell to $185.1 billion, the lowest level since October 2012, and  shipments of goods were the weakest they'd been in more than four years. Industrial supplies – led by big drops in exports of fuel oil, plastics and crude oil – had their worst performance since October 2010. Exports of autos and consumer goods were also down.

On the other side of the ledger, imports climbed in August, benefiting from the stronger dollar. Smart phones were the biggest driver: Imports of cell phones and other household goods totaled $2.1 billion in August, accounting for more than half the $4 billion increase in imports of consumer goods.

Are Profits Stronger Than We Think?

Are corporate profits much stronger than we think? Although earnings for the S&P 500 have been down roughly 2 percent on the year, a report from the Fed indicates a different trend. The Fed's measure of “Nonfinancial Corporate Business” profits before taxes for the quarter that ended in June shows them increasing by 11 percent year-over-year. That's the strongest growth by that measure since the fourth quarter of 2012.

Even in the S&P, though, the real earnings weakness inheres almost entirely in energy companies, which are projected to fall more than 60 percent in both the third and fourth quarters. Excluding them, S&P 500 profits are estimated to rise 0.1 percent and 3.9 percent in the final two quarters of the year.

Looking at raw figures rather than growth, earnings in the S&P 500 are still above the record level they first reached in 2011, despite the weakness in the energy sector. The S&P 500's net income has roughly doubled since 2009.

Crisis of Confidence

We've talked about how rough the third quarter was for stock market investors. A new survey from John Hancock confirms the notion that individual investors have lost confidence in this market: The Investor Sentiment Index set a record high at the end of the second quarter - but that's all gone now.

For the third quarter, the Investor Sentiment Index fell back to its lowest level since the third quarter of 2014. Confidence in stock investing fell to 51 percent from 60 percent in the second quarter, in balanced mutual funds to 53 percent from 63 percent, and in bonds to 19 percent from 25 percent.

Looking forward, those investors are getting doubtful about blue-chip stocks. Twenty percent of investors said blue chip stocks would be the top-performing asset class over the next six months, down from 29 percent who said this in the fourth quarter of 2014. Sixteen percent of respondents chose small-cap stocks as their other top choice, and 11 percent said emerging markets.

Introducing the College Scorecard

It's the time of year when many high school kids start thinking in earnest about where they'd like to go to college, and when many parents start wondering how they're going to pay for it. The Department of Education has just released a new tool to help with this situation: The College Scorecard.

One nice thing about this site is that the emphasis is on finances. You can find the average cost to attend a college, the average debt that the students have accumulated upon graduation, and their future earnings power based on the degree they've earned. So it's not just about paying for school, but making the most out of it.

There are also plenty of links to resources on financial aid and scholarship information. It's a handy place to stop and check out each school on your student's wish list, and temper their expectations accordingly.

September's Jobs Report

September's employment report, just out this morning, was a somewhat disappointing one, showing that the American economy added just 142,000 jobs on the month. The headline unemployment rate remained unchanged at 5.1 percent.

After a year of averaging more than 200,000 new jobs added, the economy appears to have slowed a bit over the summer. The average over the past three months has been 167,000 new jobs. After an average of 260,000 new jobs added per month in 2014, September's figures bring the 2015 average down to 198,000.

The biggest culprit appears to be the oil & gas industry, a victim of falling oil prices. While most industries have added jobs to a greater or lesser extent over the past year, employment in oil & gas is down 3 percent since August 2014.

End of a Rough Quarter

The stock market broke the curse of September 30 yesterday, but that was about the only good thing you could say about the quarter that just came to an end. The S&P 500 rose by 1.9 percent on the day, but that wasn't enough to prevent if from being down overall for the second straight quarter.

The S&P lost 6.9 percent over the third quarter. With commodity prices plummeting, the materials sector was down 17 percent and the energy sector 18 percent. Among the index's ten sectors, only the utilities sector posted a gain for the quarter.

Overall, it was the S&P's biggest quarterly decline since September 2011. But it could have been worse: The Dow Jones Industrial Average had its worst quarter since 2008.

The Curse of September 30

This has been a rough month for the stock market, so investors can be excused for being glad to see September come to an end. But is the worst yet to come? Bespoke Investing points out that September 30 - today - is arguably the worst trading day of the year.

Since 1945, the S&P 500 has declined an average of 0.15 percent on September 30. The index has posted positive returns just 38 percent of the time on today's date.

And it's gotten worse recently. Since this bull market started in 2009, there have been five September 30s that fell on trading days (one was a Sunday). Even though the market overall has been up strongly over that time, the S&P declined on all five of those September 30s.

The Rout's Worst Losers

It was a rough day on Wall Street yesterday, with the S&P 500 losing 2.6 percent of its value. As Marketwatch pointed out, there were an unusual number of S&P stocks posting major declines. It's rough if one of your stocks loses 9 percent over the course of a year, but these S&P members all lost that in a single day yesterday:

• Mallinckrodt, down 12.6 percent
• Williams Cos., down 12.1 percent
• Endo International, down 10.2 percent
• Qorvo Inc., down 9.3 percent
• Chesapeake Energy, down 9.2 percent
• Freeport-McMoRan, down 9.1 percent

Another Notch Up for GDP

The Commerce Department revised its second quarter GDP reading for the final time on Friday, nudging it up to 3.9 percent rate, compared with a prior estimate of 3.7 percent. After a disappointing first quarter when growth was barely positive at 0.6 percent, that figure looks pretty solid.

The new number was the result not of one big change but a handful of small upward revisions. Household consumption was revised to a 3.6 percent gain compared with an initial estimate of 3.1 percent. Business investment climbed at a 5.2 percent annualized pace, compared with a prior estimate of 4.1 percent. Investment in nonresidential structures, including office buildings and factories, rose 6.2 percent, the most in more than a year.

Also looking very strong was residential construction, which increased at a 9.3 percent rate, up from an already impressive previous estimate of 7.8 percent. That's yet another sign of the rebound of the housing market.

New Home Sales Take a Leap Forward

The American housing market is almost fully recovered from the Great Recession, at least as far as new home sales go, according to new figures from the Commerce Department. Compared to a year earlier, new home sales were up a stunning 21.6 percent last month.

With a big leap forward in August, demand for new homes was at its highest level in more than seven years. New U.S. homes sold at an annual rate of 552,000 in August, marking their highest point since February 2008. We didn’t know it at the time, but the recession was already a few months old at that point.

The Northeast region was the biggest gainer in the country, with sales up 24.1 percent over August 2014. The median sales price of new houses sold in August 2015 was $292,700; the average sales price was $353,400.

The Disappearing Hedge Fund

As the stock markets have seen so much turbulence over the past few months, causing distress for many mutual fund investors, you might think hedge funds would gain in popularity. But that hasn't been the case. New hedge funds this year are appearing at the slowest pace since 2010, Hedge Fund Research reported yesterday.

According to HFR, 252 new hedge funds rolled out in the second quarter, down slightly from the 264 in the previous quarter. Altogether, total first-half launches of hedge funds were the smallest in five years.

But they haven't been going away, either. Through the end of the first half, 417 hedge funds had been liquidated. That may sound like a lot, but it puts 2015 on track to record the lowest annual number of hedge fund liquidations since 2011.

Do You Know How Much Debt You Have?

Do you know how much household debt you're carrying around? Your lenders might have a much more accurate picture of that than you do. That's the upshot of a new study released this week by the New York Fed, which looked at consumer credit scores in relation to what consumers actually owe.

In most cases, people had a pretty good handle on their debts. Consumers know how much they owe on their mortgages, the home equity lines of credit, and their car loans. But there were two categories where their assumptions were very wrong: credit card debt and student debt.

The study found that consumers self-reported their student debt as roughly 25 percent lower than what it actually was. Credit cards were even worse: In that category, consumers undershot their debt loads by an average of 37 percent.

The Big Sell-Off

One under-reported trend on Wall Street this year: Companies are increasingly trying to raise capital by selling more of their own stock. Aside from IPOs, companies have raised $160.34 billion by selling stock as of September 21, which is the highest of any similar period on record. This year’s figure is 19 percent higher than last year’s pace.

Many companies have been selling shares to finance mergers. For example, Actavis raised $4.2 billion in February to help fund its purchase of Botox-maker Allergan. American Tower raised $2.5 billion by selling stock to help pay for its purchase of cell phone towers from Verizon Communications Inc. Endo International raised $2.3 billion to help fund its acquisition of Par Pharmaceutical.

But sometimes it's a desperation move. Copper mining giant Freeport-McMoran announced last Friday that it had raised $1 billion after selling 96.7 million shares of common stock, and may raise another $1 billion in the coming months. But in the global commodity slowdown, the company’s stock is down 68 percent over the past year, and fell 3 percent on Friday after the sale was announced.

The Rise of 529s

As many of us are recovering from making that first college tuition payment of the new school year, it's worth taking a look at one vehicle that has made such things a little less painful: the 529 plan. These plans continue to grow in popularity and volume: According to the College Savings Plan Network, there is now $258.2 billion being held in 529s, an increase of 5.6 percent over last year.

Most of that growth has come from new plans rather than people putting more money into existing ones. There were about 500,000 new 529s opened over the past year, but the average account in each of them rose by just 1.3 percent, to an average level of $20,934.

That might be an issue for some people, because tuition is growing faster than that. The growth of tuition for private nonprofit four-year colleges grew at 3.7 percent during the 2014-15 academic year.

The Fed's Forecast

The Federal Reserve kept short-term interest rates pinned near zero Thursday, but they also hinted once again at when exactly they might be raised. The answer to that question is: More slowly than many economists had previously anticipated.

Along with the Fed's economic projections, they also released a dot plot that shows the median and average projection of rates among Fed participants. Each dot represents an individual Fed official’s view, with 17 dots in total plotted for each year, so we can see what the aggregate forecast is.

The average level that Fed officials see rates ending 2015, 2016 and 2017 at are 0.4 percent, 1.5 percent and 2.6 percent, respectively. In June, when they released a similar graph, those figures were slightly higher, at 0.6 percent, 1.8 percent and 3 percent. Even into 2018, the average target was just 3.3 percent.

The Interest Rate Dilemma

Will she or won't she? The entire financial community is watching today to see if Federal Reserve chair Janet Yellen will raise interest rates. If she does, it's likely to be an unpopular choice: According to a new Gallup poll, more U.S. investors  say today's low interest rates do good for consumers by helping borrowers (68 percent) than say low rates do harm by hurting savers (24 percent).

Many of the poll's respondents have taken advantage of low interest rates to refinance or take out various types of new loans. Overall, 58 percent said they have taken advantage of low rates in the past two years by doing at least one of the following: buying a car (30 percent), refinancing a mortgage or home loan (17 percent), purchasing a home (16 percent), taking out a student loan (9 percent) or taking out another type of loan (10 percent).

Furthermore, twice as many investors say today's low rates are helping their own finances (29 percent) than say the low rates are hurting them (15 percent). Low rates especially aid nonretired investors, with 34 percent saying the rates are helping them financially, whereas 12 percent say they are hurting them. Only 15 percent of retired investors, on the other hand, say the low rates are helping them, while 28 percent say they are hurting.

The Widening Race for the Top

In January of 2009, ExxonMobil posted an annual profit of $45.22 billion, the largest in U.S. history, and became the most valuable company in America. It's been tough sledding for the oil business since then. Exxon has long been passed as the largest stock by Apple and this past February, Apple    became twice as valuable as Exxon, which was still the next-biggest publicly held U.S. company.

And now, with the continuing struggles of the oil industry, the Wall Street Journal points out a further indignity: Apple’s market cap on Monday surpassed the combined total of Exxon, Chevron and  Wal-Mart. As of Monday’s close, Apple was valued at $657.6 billion, versus $650.8 billion combined for Exxon ($302.2 billion), Wal-Mart ($206.1 billion) and Chevron ($142.5 billion).

Combined, the latter trio have lost nearly $200 billion in market value since early May.  Exxon now ranks fifth in market cap among U.S.-listed firms, Wal-Mart is 12th and Chevron is roughly 25th. The current runner-up to Apple? Google.

How Quickly Will the S&P Snap Back?

The S&P underwent a correction last month, falling by more than 10 percent. How quickly is it likely to rebound? An analyst for MKM Partners looked at the historical record of the S&P's performance following such corrections, and concluded that it's not likely to set a new high any time this year. 

Since 1960, there have been 24 times when the S&P 500  suffered at least a 10 percent correction for the first time in at least three months.  On average, it took nearly 12 months for the index to reach its next 52-week high.

The quickest of these recoveries came after the correction of late October 1997; the S&P snapped back to a new 52-week high in just 29 trading days. The longest was after the correction of April 2000, at the crash of the dot-com era. Following that 10 percent plunge, it took 848 days - almost five years - for the S&P to notch a new 52-week high.

A Bad State of Retirement

If you're nearing retirement and thinking about where you want to spend those golden years, you might do well to get out of the tri-state area. That's the upshot of a new report from WalletHub, which analyzed the 150 most populated cities in the United States to determine where retirees were better off spending the winter of their lives.

The absolute worst of those 150 cities? Newark, which came in 150th and last on the key criteria of quality of life and health care. New Jersey's largest city was also very low on the categories of affordability and activities.

Second from the bottom was Jersey City, which finished even lower than Newark in affordability and activities. And New York City ranked fifth from the bottom. WalletHub's best city for retirement? Tampa, Florida.

The Disappearing High-Tech IPO

The stock market boom of the late 1990s was fueled by dot-com companies going public, but there's a very different high-tech landscape now. The percentage of IPOs held by tech companies is at a seven-year low, and those IPOS have generally been disappointing.

Only 11 percent of U.S. IPOs so far in 2015 were held by tech companies, the lowest level since the midst of the financial crisis in 2008, when 10 percent of all IPOs were in tech. With just 15 tech IPOs through August, this year could see the fewest such offerings since 2009. Shares of those 15 tech companies on average have fallen 4 percent from the IPO price, and 20 percent after the first day’s close.

What the strongest high-tech startups are doing now is staying private. There are now at least 117 private companies valued by venture firms at $1 billion or more, nearly double the amount from one year ago.

Another Blow to Confidence

The gyrations in the market seem to have had an effect on American's confidence.  Although Gallup's Economic Confidence Index began the year in positive territory for the first time since the recession, it averaged just -14 for the week ending September 6. 

According to this measure, confidence began increasing in late 2014, following the decline in gas prices. As gas prices began to rise in late February, Americans' confidence in the economy started to fall.

But the index remained above -10 until July. It has stayed below that level since - including a -17 score for the week ending August 30, when doubts about China's economy made the U.S. stock market fall sharply. This week, 38 percent of Americans say the economy is getting better while 58 percent say it is getting worse.

Rocky Waters in Emerging Markets

The U.S. stock market has been decidedly blah this year, but the realm of emerging markets has been a whole other story. The slowdown in the Chinese economy and equity market - and remember, China is still considered an emerging market rather than a developed one - has played havoc with that asset class. The MSCI Emerging Markets index fund, considered a benchmark, has lost 25 percent of its value over the past year.

Investors have noticed this, and responded. They've pulled out a whopping $40 billion from emerging markets stocks this year. That's after investing a net of $104 billion in those stocks over the five years through 2013.

Emerging markets stocks have fallen so much that they now look like bargains. It now costs half as much to buy a dollar's worth of earnings from emerging markets companies than to buy a dollar's worth of earnings from an American stock.

The End of Vacation

Labor Day marks the unofficial end of summer and the unofficial end of vacation season for most Americans. Did you take a vacation this season? Somewhat surprisingly, most Americans haven't had a vacation - defined as a trip away from home of at least 100 miles - in the past year.

According to the Allianz Travel Insurance Vacation Confidence Index, more than 135 million Americans, or 56 percent, say that they haven’t taken a vacation within the past 12 months. That's an increase of almost 10 million from the 126 million Americans who reported no vacation in 2014.

Allianz projects that Americans will end up spending $85.5 billion on summer vacations in 2015, down 13.5 percent from the $98.8 billion we spent in 2014. The decline is being led by young Americans aged between 18 and 34; almost 40 percent of millennials plan to spend less than $400 on summer travel, double all other age groups combined.

Thoughts for Labor Day

Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don't turn up at all. ~ Sam Ewing

Perseverance is the hard work you do after you get tired of doing the hard work you already did. ~ Newt Gingrich

Winners embrace hard work. They love the discipline of it, the trade-off they're making to win. Losers, on the other hand, see it as punishment. And that's the difference. ~ Lou Holtz

August's Employment Report

The American economy hit a little bit of a speed bump in August, according to the monthly jobs report released this morning. According to the Bureau of Labor Statistics, we created just 173,000 jobs in August, the smallest number since March. But the overall unemployment rate fell from 5.3 percent to 5.1 percent, the lowest it's been since April 2008.

The disappointing August numbers should be taken with a grain of salt.  August's employment numbers have ended up getting revised upward in 17 of the last 20 years. Since 2009, the Labor Department's initial August report has later been revised to add a total of 440,000 new jobs.

For this August, health care was the sector that added the most jobs, with 56,000. Financial activities added 19,000, including 8,000 for real estate and 5,000 for securities, commodity contracts and investments. The biggest loser among the sectors was manufacturing, which decreased by 17,000.

The Return of Job Confidence

How far have we come as a nation in terms of our economic confidence? Gallup's latest survey suggests that Americans are significantly more secure in their jobs than they were just four years ago.Among the findings of Americans' employment fears in 2011 versus 2015:

• Benefits will be reduced: 44 percent vs. 34 percent
• I’ll be laid off: 30 percent vs. 22 percent
• My wages will be reduced: 33 percent vs. 20 percent
• Hours will  be reduced: 30 percent vs. 19 percent
• Jobs will be sent offshore: 13 percent vs. 9 percent

“This could be a positive sign that Americans see their lives returning to the way things were in the early 2000s, although not quite all the way," Gallup said in the study. "Or it could be that workers now see conditions as a new reality after the Great Recession and thus not a cause for worry.”

Currency Issues

Despite the gyrations of the stock market recently, American corporations are still flush with cash, according to S&P Dow Jones Indices. Cash holdings reached a record high last quarter at more than $1.33 trillion, edging past the mark set in the fourth quarter of 2014.

But one thing they're not doing with all that money is paying out dividends. Globally speaking, companies paid out $404.9 billion in dividends last quarter, which was down 7 percent from the previous quarter.

This two trends might seem to be at odds, but there's a logical explanation. With the dollar so strong, international companies paying out the same dividends in their local currency have seen the value of those dividends decline in dollar terms. According to Henderson Global Investors, if currency values had stayed flat last quarter, overall dividends would have risen to $451.7 billion.

Surveying the Wreckage of August

A pretty brutal August is now in the books, and although things didn’t turn out quite as bad as they looked at this time last week, the markets still ended up suffering. The Dow Jones Industrial Average finished the month down 6.6 percent, ending August with its steepest monthly loss since May 2010.

The other major indexes had it about as bad. The S&P 500 index was off by 6.3 percent, and the Nasdaq Composite was down by 6.9 percent. For both those indexes, it was their largest monthly decline since May 2012.

And it’s possible the carnage is not over. According to S&P Capital IQ, there have been 11 other times that the S&P 500 fell by more than 5 percent in August since 1945. The index went on to decline in September as well 80 percent of those times.

What Does This Volatility Mean?

That was some ride in the stock markets last week, wasn't it? Here's how wild it was: The Dow Jones industrial average went six straight days with moves of at least 200 points. That had never happened before.The S&P 500 had six straight days with 1 percentage moves, which hadn't happened since 2009.

Is there anything we can learn from this? According to the market research firm Convergex, these volatile stretches tend to occur at two distinct points: at the beginning of a bull market, or toward the end of one. For example, there were 82 moves in the S&P of more than 1 percent in 1982, when that bull market was just beginning. That declined to 28 by 1985, then picked back up to 61 in 1986 and 95 in 1987 as the bull ended its run.

We saw similar moves at the beginning of this bull market: There were 118 plus or minus 1 percent moves in 2009, but just 38 in 2014. We're at 40 already in 2015.

The Big Bonus

There's an interesting effect in American compensation trends, uncovered by a new study out from Aon Hewitt, an international human capital and management consulting company. Companies are spending more than ever on compensation - but with a twist. While the pay raises are impressive, bonuses are growing at a much faster rate.

Aon Hewitt predicts that base pay for salaried exempt employees will increase by 2.9 percent in 2015. That means base salaries will roughly be keeping pace with the growth of the U.S. economy. But variable pay increases - which includes bonuses and other incentives - will increase 12.9 percent.

Companies have long budgeted more money to  bonuses than across-the-board pay raises, but the trend has sharpened greatly in recent years. A similar survey in 1996 showed a much closer relationship -  salaries rose by 3.9 percent while bonuses rose by 7.5 percent.

GDP Moves Up

After a tumultuous week in the stock markets, there was some surprisingly good news out this morning from the Commerce Department. Following its initial estimate of second quarter GDP growth at 2.3 percent, Commerce has now revised that upward to a robust 3.7 percent.

What changed in the new revisions? Businesses increased investment by 3.2 percent increase of a drop of 0.6 percent, with spending on structures such as office buildings rising by 3.1 percent instead of the initial estimate of a drop of 1.6 percent. Consumer spending, the main driver of U.S. economic activity, was revised up slightly to 3.1 percent instead of 2.9 percent.

There were also upward revisions to state and local government spending and inventories. Also fueling the rise: Corporate profits rose an estimated 2.4 percent in the second quarter, after declining by 5.8 percent in the first quarter.

A History of Corrections

It's been a rough couple of days on the stock market, but as any experienced investor will tell you, you have to expect these kinds of things. A correction - a 10 percent drop in value - is a regular occurrence in the markets.

Stock researcher Ed Yardeni has compiled a decade-by-decade record of how often these drops happen. This is the second correction since 2010, which is about par for the course. And barring a total meltdown like we had in 2008-09, the numbers usually don't get much worse than what we've already seen. Here's Yardeni's full chart:

The S&P Corrects Itself

Yesterday we noted that the S&P 500 hadn't tumbled into correction territory - meaning it wasn't yet down 10 percent or more from its recent peak. But that situation ended on Monday, when the index lost 3.9 percent, to close 11 percent below its May 21 record close of 2,131. That ended the S&P 500’s fifth-longest correction-free streak ever.

What does that mean for the future? If history is any guide, that means there is a good chance that a 20 percent selloff is coming, which would put it into bear market territory. Following the last correction-free streak, which ended after a record of about 84 months in October 1997, the S&P 500’s decline peaked at 10.8 percent, which would seem to bode well for this sell-off.

However, the other three streaks that were longer than the current one ended with eventual declines of 22 percent, 34 percent and 57 percent. The average overall decline of the those declines was 31 percent. Let's hope history does not repeat itself.

What Happened on Friday?

Friday was a disaster day on Wall Street, especially for the Dow Jones industrial average. The Dow lost 3.1 percent on Friday alone, sending it down to 10.1 percent off the high it set back in May. That puts the index officially into correction territory.

In addition to the Dow, the S&P 500 and and the Nasdaq indexes also had their worst single-day percentage declines since 2011 on Friday, although the other two indexes aren't in correction territory - yet. Indexes in France, the Netherlands, Spain and Belgium are also now officially in correction, down more than 10 percent from recent highs.

The carnage could also been seen at the level of individual stocks. Among the S&P 500 companies, 492 of them lost value on Friday. Some 328 have dropped 10 percent to be in correction, and 147 have fallen 20 percent from recent highs, putting them in bear-market territory.

Airlines Getting Busy

If you've traveled this summer, you may have noticed that airfares have been declining. Airline fares fell 5.6 percent in July from a month earlier, the biggest decline since late 1995, according to the Labor Department’s consumer-price index. That's the biggest single monthly drop in airfares since 1995.

The biggest factor in this is that jet-fuel prices have declined nearly 35 percent over the year, tracking the drop in oil prices, according to the Labor Department’s producer-price index. Since 35 percent is much larger than 5.6 percent, the decline has helped airlines produce their best-ever profits.

It's also produced some of the busiest times for airlines in the industry's history. It's been forecast that some 14.2 million passengers will be flying over the long Labor Day weekend, an increase of 3 percent over last year's number.

To Have or to Have Not

Do you consider yourself a "have" or a "have-not"? Gallup recently asked that question of Americans, and a solid majority, 58 percent, consider themselves to be "haves" in U.S. society. Just 38 percent put themselves in the "have-not" group.

The percentage of Americans perceiving themselves to be have-nots rose in the 10 years between the initial 1988 survey and 1998, and more than doubled between 1988 and 2006, when it reached 35 percent. Meanwhile, the "have" percentage has settled into a tight range between 57 percent and 60 percent.

Oddly, it doesn't take a whole lot of wealth to put someone in the "have" category. While 77 percent of Americans with annual income of $90,000 or more consider themselves haves, so do more than half of those - 59 percent - who earn between $36,000 and $90,000 per year.

Buybacks Reach a Record

Corporate buybacks have been surging since the financial crisis, with the S&P 500 companies spending nearly $2.3 billion on them since 2009,  according to a new report from Aranca Investment Research. Last year’s $553 million in buybacks fell just short of the peak reached in 2007, while the $904 million spent on buybacks and dividends combined set a new record.

This year looks even better: The companies in the S&P 500 are poised to spend more than $1 trillion on buybacks and dividends in 2015, breaking the record set last year. Buyouts and dividends totaled $237 million in the first quarter alone.

This is all of particular interest to investors. Over the past decade, the S&P 500 buyback index — which measures the performance of the 100 S&P stocks with the highest buyback ratios – delivered 11.3 percent annualized returns, easily beating the overall 7.8 percent annual returns from the entire S&P 500.

Standing Still

Does it feel like the stock market hasn't moved a whole lot this year? That has certainly been the case: The Dow Jones industrial average’s closing high for this year is just 6.7 percent above its closing low. Through the middle of August, that is the smallest range in the index’s entire history. The next-narrowest range through the middle of August was 7.7 percent, which happened in 1992.

The story is similar for the S&P 500 index. For the S&P, this year’s closing high is 6.9 percent above its closing low. That is the second-smallest such spread for the index, behind 1993, when the spread at this point of the year was 6.4 percent.

But even that understates the case. As long as the S&P 500 doesn’t set a new closing high or low this week, 2015 will become the smallest spread on record, since the index began a series of yearly highs in late August 1993.

Looking to a Bright Future

More Americans are optimistic about their financial future today than they were in 2011, according to a new survey from the Lincoln Financial Group. The turnaround has been staggering – 81 percent of those surveyed said they feel optimistic about their financial future, up from just 13 percent who felt that way in 2011.

In addition, 83 percent feel their lives are headed in the right direction, a significant increase from the 66 percent who felt that way in 2011. And 59 percent report they are optimistic that their financial situation will improve in the next year, nearly twice the 33 percent that felt that way in 2011.

One downside: the feeling of “preparedness” for the financial future has not improved. Only 1 in 5 Americans feel “very prepared” for their financial future, including retirement, protecting their wealth and “handling income disruptions of varying durations.”

For Social Security, an Unhappy Birthday

Today is the 80th anniversary of Franklin Roosevelt signing the Social Security Act into law, but for most Americans, it's not a very happy birthday. Most Americans under 50 doubt that they will ever get their Social Security benefits.

Among those Americans aged 30 to 49, just 32 percent think Social Security will eventually pay them a benefit. Younger people are slightly more optimistic; 34 percent of those aged 18 to 20 expect to receive benefits, although 64 percent said they don't expect to receive anything.

While the vast majority of Americans aged 65 and older who are still working do believe they will get their Social Security benefits, 43 percent of current retirees predict that eventually there will be cuts in their benefits. This figure tends to move with the strength of the economy; 56 percent expected such cuts in 2010, but just 32 percent did in 2005.

Behind the Hiring Trends

The number of job openings in the U.S. fell slightly in June - but that might not be a bad thing. After peaking at a record 5.36 million in May, job openings slipped to 5.25 million in June, according to the  Labor Department’s Job Openings and Labor Turnover Survey, known as Jolts.

That's in part because more people are getting hired. Hires climbed to their highest level of the year in June at 5.12 million, and the number of Americans voluntarily quitting their jobs climbed to 2.75 million, up slightly from 2.73 million in May.

According to the Labor Department, the number of people voluntary quitting jobs tends to rise when people are confident about job prospects.  In recent months, while the number of quitters has held fairly steady, a gap between job openings and hires has opened, which suggests employers haven’t been able to find workers with the desired skills at the salary they're offering.

The Great Productivity Slowdown

Although we've seen fairly solid employment gains recently, there's a troubling measure that hasn't kept pace: The productivity of nonfarm business workers, or the output of goods and services per hour worked, increased at just a 1.3 percent seasonally adjusted annual rate in the second quarter, the Labor Department said Tuesday. The long-term average for productivity growth is 2.2 percent.

But the longer-term prognosis is even worse. That 1.3 percent gain followed two consecutive quarterly declines. From a year earlier, productivity was up just 0.3 percent.

On top of that, the Labor Department also revised some earlier numbers downward. It's now believed that labor productivity was flat in 2013, down from an earlier estimate of 0.9 percent improvement. Over the past five years, productivity has grown at just 0.4 percent annual pace—the weakest growth we've seen since the early 1980s.

Buffett's Biggest Deal

Even Warren Buffett’s smaller deals are worth following, but now he's made the biggest buy of his career. Buffett's investment vehicle, Berkshire Hathaway, said on Monday that it agreed to buy Precision Castparts, which furnishes parts such as fasteners and turbine blades to aircraft makers, for about $32 billion in cash. It's Berkshire’s largest takeover ever. 

The timing isn't really a surprise, since Berkshire has cash burning a hole in its pocket right now. Buffett has said he likes to have a cushion of $20 billion at all times, but Berkshire’s cash on hand totaled nearly $67 billion at the end of the second quarter.

The total cost of the transaction is $37.2 billion, which already looks like a steal for Buffett. Precision closed at $193.88 a share on Friday, but it was up 19 percent after the deal was announced on Monday morning.

Health Care Earnings Surging

Here's an interesting sidelight to the current earnings season: The sector showing the most strength, top to bottom, is undoubtedly health care. Among the S&P 500 stocks, 65 percent of the health care companies reported both earnings and revenue that came in higher than the analysts had expected.

None of the other S&P sectors reached even 50 percent by that measure. Consumer discretionary came closest, at 47 percent; technology and financials were close behind, at 46 percent and 45 percent, respectively.

In some sectors, very few stocks exceeded both revenue in earnings expectations.  In the consumer staples, energy, industrial and utility sectors, less than a third of all companies met those criteria.

July's Unemployment Report

July's employment report, released by the Bureau of Labor Statistics this morning, was very much more of the same: Total nonfarm payroll employment increased by 215,000 in July, which is almost exactly the average monthly increase we've seen over the past 12 months. The unemployment rate was unchanged at 5.3 percent. This keeps the Fed on track to raise short-term interest rates this year, maybe in September, since the jobless rate is already where Fed officials had forecast it to be by year-end.

Deeper in the figures, there's a little bit of worrisome news: The broader unemployment rate, including people stuck in part-time jobs and those who haven’t looked for work in at least a month, was still at 10.4 percent in July, down from 10.5 percent in June. That figure is still considerably higher than it was in November 2007, when the recession started; it was at 8.4 percent then.

In addition, the labor force participation rate remained stuck at 62.6 percent in July. Before touching that low in recent months, we hadn't seen that level since October 1977.

Superior Service

It looks like at least one part of the U.S. economy is in high gear: According to data released yesterday by the Institute for Supply Management, the service sector in July expanded at its fastest rate since the recession. The ISM’s non-manufacturing index is now at its highest point since August 2005.

Many of the underlying measures are at long-time highs. The gauge of service-industry orders climbed to the highest level since August 2005; the share of services companies boosting employment was the highest since ISM began keeping these records in 1997.

This is in strong contrast to the manufacturers’ side of the equation. The ISM’s factory index dropped in July to a three-month low of 52.7. The difference between the ISM’s non-manufacturing gauge and the factory index is now the biggest it's been since January 2009.