- Payroll Diversion Scams: In 2018, the Internet Crime and Complaint Center, received over 100 payroll diversion complaints, resulting in losses of over $100 million. In these scams, criminals target employees through phishing emails designed to capture the employee’s login credentials, and the stolen credentials are then used to redirect their direct deposit information.
- Extortion Schemes: In 2018, IC3 received over 51,000 complaints – a 242 percent increase over 2017 – about Internet extortion schemes, with losses totaling over $83 million. These schemes typically take the form of ransomware, denial of service attacks, network intrusions, and sextortion.
- Tech Support Fraud: In 2018, IC3 received over 14,000 complaints related to tech support fraud, resulting in losses of approximately $40 million – an increase of over 160 percent from 2017. The majority of the victims in these schemes were elderly.
Tuesday, April 30, 2019
The Rise in Internet Crime
How bad is internet crime getting? The FBI’s Internet Crime and Complaint Center received 50,000 more complaints in 2018 (351,936) than in 2017 (301,580), with losses from those complaints amounting to $2.7 billion, a $1.3 billion jump from the $1.4 billion in losses reported in 2017, according to the agency’s new crime report. The most prominent scams:
Monday, April 29, 2019
First Quarter GDP
A strong economic sign: The U.S. economy expanded at a 3.2 percent annual pace in the first three months of 2019, the government said Friday. This was the first time since 2015 that first-quarter GDP topped 3 percent.
Fueling the stronger GDP growth were stronger inventory building and trade. Exports rose 3.7 percent, while imports dropped by the same amount, leading to a smaller trade deficit.
One unexpected factor was a sharp upturn in state and local government spending. Spending by local governments likely picked up due to the partial federal government shutdown, jumping 3.9 percent after a 1.3 percent drop in the prior three months. This was the fastest gain in three years. The contribution from state and local government spending came largely as a result of highway and road construction.
Fueling the stronger GDP growth were stronger inventory building and trade. Exports rose 3.7 percent, while imports dropped by the same amount, leading to a smaller trade deficit.
One unexpected factor was a sharp upturn in state and local government spending. Spending by local governments likely picked up due to the partial federal government shutdown, jumping 3.9 percent after a 1.3 percent drop in the prior three months. This was the fastest gain in three years. The contribution from state and local government spending came largely as a result of highway and road construction.
Thursday, April 25, 2019
Losing Affluence
A sign of how America has changed over the past generation: More than half of Americans who grew up rich no longer think of themselves as rich. That’s according to a recent poll of more than 4,000 Americans by Business Insider.
The survey asked respondents to identify their upbringing and define their current financial situation. Of those who responded, around 36 percent who said they grew up affluent think they're still affluent today. But nearly 60 percent now consider themselves to be in a lower class — about half said they're middle class or upper middle class, while the other half said they're poor or working class.
Similarly, nearly 60 percent of those with an upper middle class upbringing now identify with a lower class. Half of this group think they're middle class, while the remaining half think they're poor or working class. Around 34 percent of those brought up upper middle class think their station has remained the same - only about 4 percent think they're now affluent.
The survey asked respondents to identify their upbringing and define their current financial situation. Of those who responded, around 36 percent who said they grew up affluent think they're still affluent today. But nearly 60 percent now consider themselves to be in a lower class — about half said they're middle class or upper middle class, while the other half said they're poor or working class.
Similarly, nearly 60 percent of those with an upper middle class upbringing now identify with a lower class. Half of this group think they're middle class, while the remaining half think they're poor or working class. Around 34 percent of those brought up upper middle class think their station has remained the same - only about 4 percent think they're now affluent.
Americans' Confidence in Retirement Is Surging
The Employee Benefit Research Institute's 29th annual Retirement Confidence Survey has found 82 percent of retirees are confident in their ability to live comfortably throughout retirement. That's up from 75 percent last year, and ties a record for this survey. This year’s survey equals the highs measured in 2005 and 2017.
The percentage of those still working who say they are very confident in their ability to live comfortably throughout retirement reached 23 percent. That level is consistent with what we saw in the late 1990s and early 2000s, prior to the recession.
EBRI also found the age at which Americans expect to retire and when they actually do doesn’t always match up. The median age for retirement is 62, even though many workers think they’ll be working until 65. Sometimes, that's because people can afford to retire - but sometimes it's not voluntary, but rather due to a health or disability problem, or issues with the employer.
The percentage of those still working who say they are very confident in their ability to live comfortably throughout retirement reached 23 percent. That level is consistent with what we saw in the late 1990s and early 2000s, prior to the recession.
EBRI also found the age at which Americans expect to retire and when they actually do doesn’t always match up. The median age for retirement is 62, even though many workers think they’ll be working until 65. Sometimes, that's because people can afford to retire - but sometimes it's not voluntary, but rather due to a health or disability problem, or issues with the employer.
Wednesday, April 24, 2019
Behind the New Market Highs
The S&P 500 and Nasdaq closed at record highs yesterday, behind a batch of solid corporate earnings. The Dow Jones Industrial Average is currently less than 1 percent away from its record.
A range of companies reported strong earnings, helping to lead the way to the higher marks, including:
A range of companies reported strong earnings, helping to lead the way to the higher marks, including:
- Twitter was up 16 percent after reporting user growth well beyond analyst forecasts.
- United Technologies rose 2.3 percent after the company reported earnings and revenue that beat analyst expectations, while raising expectations for its full-year performance
- Coke rose 1.7 percent on better-than-expected earnings
Tuesday, April 23, 2019
The Trouble in the IT Sector
This earnings season looks like it might be a rough one for IT. According to FactSet, the information-technology sector of the S&P 500 index is expected to see earnings drop about 10.6 percent from last year. It is one of just three S&P sectors projected to experience a double-digit percentage decline; the entire index is expected to see earnings drop about 3.9 percent.
One reason for this: The S&P 500’s IT sector no longer includes internet companies like Alphabet, Facebook, Twitter and Netflix. They have all been moved into the new communications services sector, which is expected to see earnings fall by 1.3 percent.
Last year’s tax reform is another factor. IBM, for instance, has seen its net income decline by more than 13 percent, thanks in large part to a huge tax benefit it enjoyed in the first quarter of 2018.
One reason for this: The S&P 500’s IT sector no longer includes internet companies like Alphabet, Facebook, Twitter and Netflix. They have all been moved into the new communications services sector, which is expected to see earnings fall by 1.3 percent.
Last year’s tax reform is another factor. IBM, for instance, has seen its net income decline by more than 13 percent, thanks in large part to a huge tax benefit it enjoyed in the first quarter of 2018.
Monday, April 22, 2019
Shifts in the Housing Market
The number of applications for homebuyers to get pre-approved for loans jumped to a nine-year high last week, according to Freddie Mac's most recent mortgage survey. That's potentially a sign of a strong spring homebuying season.
At 4.17 percent, the average 30-year mortgage rate remains 30 basis points below what it was a year ago, enticing more homebuyers. But the more recent trend is that these rates have been going up - exactly what you'd expect when there's great demand for them.
That 4.17 percent for the 30-year was up from 4.12 percent the week before, the third straight weekly increase, which we hadn't seen since September. The 15-year fixed-rate mortgage averaged 3.62 percent last week, up two basis points from the week before.
At 4.17 percent, the average 30-year mortgage rate remains 30 basis points below what it was a year ago, enticing more homebuyers. But the more recent trend is that these rates have been going up - exactly what you'd expect when there's great demand for them.
That 4.17 percent for the 30-year was up from 4.12 percent the week before, the third straight weekly increase, which we hadn't seen since September. The 15-year fixed-rate mortgage averaged 3.62 percent last week, up two basis points from the week before.
Friday, April 19, 2019
Happy Easter Weekend
Are you spending money to celebrate the holiday this weekend? American consumers are expected to drop $18.11 billion on Easter, according to the National Retail Federation. Eighty-seven percent of Easter shoppers are expected to buy candy, spending $2.49 billion. Consumers are also projected to spend $5.74 billion on food, $3.27 billion on clothing, $2.87 billion on gifts, $1.29 billion on flowers, just over $1 billion on decorations and $780 million on greeting cards.
More than half of consumers (54 percent) plan to cook a holiday meal, while 16 percent will get a meal from a restaurant. Less than half (49 percent) of shoppers will attend church on Easter, and 15 percent will open gifts. Just under a third of consumers are planning an Easter egg hunt for the little ones in their lives.
This year's overall figure is a slight dip from the $18.16 billion projected in 2018. But with nearly 80 percent of survey respondents expected to celebrate, shoppers are projected to spend a little more on average: $151.25 in 2019 vs. $150.05 in 2018.
More than half of consumers (54 percent) plan to cook a holiday meal, while 16 percent will get a meal from a restaurant. Less than half (49 percent) of shoppers will attend church on Easter, and 15 percent will open gifts. Just under a third of consumers are planning an Easter egg hunt for the little ones in their lives.
This year's overall figure is a slight dip from the $18.16 billion projected in 2018. But with nearly 80 percent of survey respondents expected to celebrate, shoppers are projected to spend a little more on average: $151.25 in 2019 vs. $150.05 in 2018.
Thursday, April 18, 2019
The Mystery of Low Volume
Stocks are on the verge of record territory, with the S&P 500 about 15 points away from a new all-time high. So why are stock trading volumes remaining near the lowest levels of 2019?
Monday’s trading session marked the lowest full-day, total composite trading volume—roughly 5.7 billion shares—since September 10, according to Dow Jones Market Data. In fact, Monday’s session saw even less trading than the infamous holiday-shortened Christmas Eve session’s turnover of 5.79 billion shares.
To take a slightly longer view, the rolling 10-day average of total composite volumes is now at its lowest since September 12. Trading volume is on pace for its lowest monthly average since last August, and the average volume for April, if it holds, would represent the worst April since 2013.
Monday’s trading session marked the lowest full-day, total composite trading volume—roughly 5.7 billion shares—since September 10, according to Dow Jones Market Data. In fact, Monday’s session saw even less trading than the infamous holiday-shortened Christmas Eve session’s turnover of 5.79 billion shares.
To take a slightly longer view, the rolling 10-day average of total composite volumes is now at its lowest since September 12. Trading volume is on pace for its lowest monthly average since last August, and the average volume for April, if it holds, would represent the worst April since 2013.
Wednesday, April 17, 2019
Boomers Fighting Retirement
It should be no surprise to find that boomers are still not ready for retirement, despite the fact that 47 percent of them are now retired. In fact, according to the “Boomer Expectations for Retirement 2019” study from the Insured Retirement Institute, 45 percent of the boomers have no retirement savings.
About 34 million boomers have already retired. U.S. Census data indicate that by 2030, when all boomers will have hit the traditional retirement age of 65, one out of every five people in the U.S. will be of retirement age. But this group is fighting hard against retirement.
Among the study’s findings are that a third of boomers intend not to retire till age 70, if then. A third of boomers ages 67 to 72 have already postponed retirement. Only 23 percent of boomers ages 56 to 61 expect income from a private company pension plan.
About 34 million boomers have already retired. U.S. Census data indicate that by 2030, when all boomers will have hit the traditional retirement age of 65, one out of every five people in the U.S. will be of retirement age. But this group is fighting hard against retirement.
Among the study’s findings are that a third of boomers intend not to retire till age 70, if then. A third of boomers ages 67 to 72 have already postponed retirement. Only 23 percent of boomers ages 56 to 61 expect income from a private company pension plan.
Tuesday, April 16, 2019
The End of Tax Season
Tax season ended yesterday, with the traditional April 15 deadline to file. Even though the tax code was changed this year, U.S. taxpayers’ 2018 tax liability was largely on par with their expectations, according to a study released yesterday by Janus Henderson Investors.
Asked in late March about the amounts they paid throughout the year and any outstanding liability or refund, 32 percent of the study participants said they had expected to pay more than they had in 2017. But only 30 percent actually incurred a larger tax bill than in the previous year.
The situation was a little different among the more affluent. Among respondents making $100,000 or more, 42 percent ended up paying more in 2018, whereas only 36 percent expected a larger bill. At the same time, 19 percent of these wealthier taxpayers paid less in 2018 - but 28 percent had expected their liability to be lower.
Asked in late March about the amounts they paid throughout the year and any outstanding liability or refund, 32 percent of the study participants said they had expected to pay more than they had in 2017. But only 30 percent actually incurred a larger tax bill than in the previous year.
The situation was a little different among the more affluent. Among respondents making $100,000 or more, 42 percent ended up paying more in 2018, whereas only 36 percent expected a larger bill. At the same time, 19 percent of these wealthier taxpayers paid less in 2018 - but 28 percent had expected their liability to be lower.
Monday, April 15, 2019
Fear Strikes Out
With the markets continuing to soar, the CBOE Volatility Index, better known as the Fear Index, touched its lowest level in six months on Friday. The index hit an intrasession low at 11.95 on Friday, marking the lowest it had been since October 3.
The Fear Index spiked above 36 back in December amid a brutal selloff at the end of 2018, culminating on Christmas Eve. But since that point, it has declined by a whopping 67 percent.
It's not surprising that the Fear Index generally declines when the markets are doing well. The recent dip comes as the Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index are on the verge of setting all-time record highs.
The Fear Index spiked above 36 back in December amid a brutal selloff at the end of 2018, culminating on Christmas Eve. But since that point, it has declined by a whopping 67 percent.
It's not surprising that the Fear Index generally declines when the markets are doing well. The recent dip comes as the Dow Jones Industrial Average, the S&P 500 index and the Nasdaq Composite Index are on the verge of setting all-time record highs.
Friday, April 12, 2019
Good Tax News for New Jersey
This is the first tax season since the 2017 Tax Cuts and Jobs Act went into effect. Tax liabilities have gone down all across the nation, but guess which state saw the biggest cut? New Jersey!
The Garden State's taxpayers saw an average 29.1 percent decline in tax liabilities through March 31, according to H&R Block. That amounts to $1,972 less in taxes.
But even though Americans are getting taxed about 25 percent less, on average, their refunds are up only by 1.4 percent on average. In New Jersey, refunds have actually declined by $179. H&R Block said the answer, at least for its clients, lies in the fact that many people failed to update their withholding rates after the tax code was overhauled.
The Garden State's taxpayers saw an average 29.1 percent decline in tax liabilities through March 31, according to H&R Block. That amounts to $1,972 less in taxes.
But even though Americans are getting taxed about 25 percent less, on average, their refunds are up only by 1.4 percent on average. In New Jersey, refunds have actually declined by $179. H&R Block said the answer, at least for its clients, lies in the fact that many people failed to update their withholding rates after the tax code was overhauled.
Thursday, April 11, 2019
What's Fueling Inflation
The Consumer Price Index rose 0.4 percent in March, boosted by increases in the costs of food, gasoline and rents, the Labor Department said yesterday. That was the biggest monthly increase since January 2018 and followed a 0.2 percent gain in February.
But overall, the inflation picture remains muted. In the 12 months through March, the CPI increased 1.9 percent. The CPI gained 1.5 percent in the 12 months through February, which was the smallest rise since September 2016.
What's rising? Food prices gained 0.3 percent in March after rising 0.4 percent in February. Health-care costs were up 0.3 percent after slipping 0.2 percent in February. Apparel prices fell 1.9 percent, the biggest drop since January 1949, after two straight monthly gains. There were also decreases in the price of used motor vehicles and trucks, airline fares and motor vehicle insurance.
But overall, the inflation picture remains muted. In the 12 months through March, the CPI increased 1.9 percent. The CPI gained 1.5 percent in the 12 months through February, which was the smallest rise since September 2016.
What's rising? Food prices gained 0.3 percent in March after rising 0.4 percent in February. Health-care costs were up 0.3 percent after slipping 0.2 percent in February. Apparel prices fell 1.9 percent, the biggest drop since January 1949, after two straight monthly gains. There were also decreases in the price of used motor vehicles and trucks, airline fares and motor vehicle insurance.
Wednesday, April 10, 2019
A Warning on Oil Prices
Don’t look now, but U.S. oil prices have spiked 50 percent since plummeting to $42.53 a barrel on Christmas Eve. What’s odd about this price rise is that the U.S. is experiencing a boom in oil production: America pumped a record 10.96 million barrels per crude a day in 2018, up by 17 percent from the year before, according to the US Energy Information Administration.
Nevertheless, trouble in the OPEC nations has helped send U.S. oil prices climbing back above $64 a barrel. Brent crude, the global benchmark, is already above $71 a barrel for the first time since mid-November.
We’re starting to see the effects at the gas pump. A survey of more than 5,000 gas stations conducted by AAA shows that the average price for a gallon of regular gas is now $2.75, up 11 percent in the last month. And the average price is already above $3 a gallon in six western states: California, Hawaii, Washington, Oregon, Nevada and Alaska.
Nevertheless, trouble in the OPEC nations has helped send U.S. oil prices climbing back above $64 a barrel. Brent crude, the global benchmark, is already above $71 a barrel for the first time since mid-November.
We’re starting to see the effects at the gas pump. A survey of more than 5,000 gas stations conducted by AAA shows that the average price for a gallon of regular gas is now $2.75, up 11 percent in the last month. And the average price is already above $3 a gallon in six western states: California, Hawaii, Washington, Oregon, Nevada and Alaska.
Tuesday, April 9, 2019
The Equity Outflow Puzzle
U.S. stocks at the end of March posted their best quarter in nearly a decade, but they did so without help from investors in U.S. stock mutual funds and exchange-traded funds. For the quarter, the S&P 500 rose 14 percent, and has added another 1.9 percent so far this month.
But individual investors seem to be leaving the stock market. U.S. equity funds posted outflows of $39.1 billion in the first quarter, according to a Bank of America analysis of EPFR data. So why do prices keep going up?
The divergence between outflows and outsize gains can be partly explained by corporate buybacks, as S&P 500 firms have repurchased $227 billion of their own stock in the first quarter of 2019, according to FactSet data. That's up from $143 billion in the first quarter of 2018. But that can't account for all of this year’s rally, which has seen the total market capitalization of the S&P 500 rise by $2.96 trillion.
But individual investors seem to be leaving the stock market. U.S. equity funds posted outflows of $39.1 billion in the first quarter, according to a Bank of America analysis of EPFR data. So why do prices keep going up?
The divergence between outflows and outsize gains can be partly explained by corporate buybacks, as S&P 500 firms have repurchased $227 billion of their own stock in the first quarter of 2019, according to FactSet data. That's up from $143 billion in the first quarter of 2018. But that can't account for all of this year’s rally, which has seen the total market capitalization of the S&P 500 rise by $2.96 trillion.
Monday, April 8, 2019
Tough to Max Out That 401(k)
The current annual limits on 401(k) contributions are $19,000, with an additional $6,000 for those 50 and older to make in catch-up contributions. That might not seem like such a hard target to reach, but only a fraction of investors actually accomplish it, according to a report from Vanguard.
Only 13 percent of participants maxed out their 401(k) contributions in 2017, when the limit was $18,000, Vanguard says. For comparison, 9.1 percent of workers whose 401(k) plans are managed by Fidelity Investments reached the cap, up slightly from 9 percent at the end of 2017 and 8.1 percent at the end of 2013.
Boomers were most likely to max out their 401(k) plans, followed by Generation X, and lastly millennials. Unsurprisingly, these investors had higher incomes, were older and had longer tenure at their employers.
Only 13 percent of participants maxed out their 401(k) contributions in 2017, when the limit was $18,000, Vanguard says. For comparison, 9.1 percent of workers whose 401(k) plans are managed by Fidelity Investments reached the cap, up slightly from 9 percent at the end of 2017 and 8.1 percent at the end of 2013.
Boomers were most likely to max out their 401(k) plans, followed by Generation X, and lastly millennials. Unsurprisingly, these investors had higher incomes, were older and had longer tenure at their employers.
Friday, April 5, 2019
March's Jobs Report
After a disappointing February, the employment picture bounced back strong in March, according to figures out this morning from the Bureau of Labor Statistics. The economy added 196,000 jobs last month, after adding just 33,000 jobs in February. The headline unemployment figure was unchanged at 3.8 percent.
Even after February's down figure, the average monthly jobs gain in 2019 stands at 180,000. That's very solid, and not too far off the pace of 2018's numbers, when the economy averaged 233,000 new jobs per month for the entire year.
For March, the health care sector led the way with 49,000 new jobs. Professional and technical services added 34,000, food and drinking establishments added 27,000, and construction added 16,000. The one disappointment: Manufacturing, which lost 6,000 jobs.
Even after February's down figure, the average monthly jobs gain in 2019 stands at 180,000. That's very solid, and not too far off the pace of 2018's numbers, when the economy averaged 233,000 new jobs per month for the entire year.
For March, the health care sector led the way with 49,000 new jobs. Professional and technical services added 34,000, food and drinking establishments added 27,000, and construction added 16,000. The one disappointment: Manufacturing, which lost 6,000 jobs.
Thursday, April 4, 2019
The Latest Economic Indicators
Some good economic news: U.S. manufacturing activity rebounded more than expected in March, according to an industry report released this week, as production, new orders and hiring all picked up. The Institute for Supply Management (ISM) said its index of national factory activity rose to 55.3 from 54.2 in February, which had marked the lowest level since November 2016.
U.S. construction spending is also up. It increased for a third straight month in February, the Commerce Department said, rising 1.0 percent to a nine-month high after an upwardly revised 2.5 percent surge in January.
The one soft spot for the economy? The service sector. Growth in the U.S. services sector hit its slowest pace in more than a year, according to data from the ISM released yesterday. The ISM non-manufacturing index fell to 56.1 in March, the weakest it's been since August 2017, down from 59.7 in February.
U.S. construction spending is also up. It increased for a third straight month in February, the Commerce Department said, rising 1.0 percent to a nine-month high after an upwardly revised 2.5 percent surge in January.
The one soft spot for the economy? The service sector. Growth in the U.S. services sector hit its slowest pace in more than a year, according to data from the ISM released yesterday. The ISM non-manufacturing index fell to 56.1 in March, the weakest it's been since August 2017, down from 59.7 in February.
Wednesday, April 3, 2019
Happy April!
Now that we have embarked upon another April, it's good to know that this has been the kindest month for stocks over the past 20 years. Since 1999, the S&P 500 has risen 1.7 percent on average during the month of April, according to LPL Financial.
The S&P 500 has closed up in April for 12 out of the past 13 years. The Dow Jones Industrial Average has done even better - it has closed up in April for every one of the last 13 years.
Another reason to be optimistic: Since 1949, the S&P 500 has never finished in negative territory following a first-quarter gain of more than 5.4 percent, which has happened 21 times. In only two of these 21 years have the subsequent nine months of the year provided negative returns: in 1987 and 1956.
The S&P 500 has closed up in April for 12 out of the past 13 years. The Dow Jones Industrial Average has done even better - it has closed up in April for every one of the last 13 years.
Another reason to be optimistic: Since 1949, the S&P 500 has never finished in negative territory following a first-quarter gain of more than 5.4 percent, which has happened 21 times. In only two of these 21 years have the subsequent nine months of the year provided negative returns: in 1987 and 1956.
Tuesday, April 2, 2019
The World's Most Profitable Company
Saudi Arabia’s national oil company was the most profitable company on the planet in 2018, according to a new report. Citing data from Fitch Ratings, Bloomberg News reported that Saudi Arabian Oil Co. — known as Aramco — generated a whopping $224 billion last year, before interest, tax and depreciation.
Apple Inc.was a distant second, with $82 billion in 2018 profits. The next four on the list are all familiar names:
Apple Inc.was a distant second, with $82 billion in 2018 profits. The next four on the list are all familiar names:
- Samsung Electronics
- Royal Dutch Shell
- Alphabet Inc.
- Exxon Mobil
Monday, April 1, 2019
A Strong First Quarter
The first quarter of 2019 is now in the books, and it was a very strong one for the markets. The S&P 500 rose 13.1 percent this quarter and notched its best start to a year since 1998. It was the biggest gain for the S&P in any quarter since 2009.
The Dow Jones industrial average gained over 11 percent, while the tech-heavy Nasdaq rallied more than 16 percent. The small-cap Russell 2000 was up 14.2 percent.
Leading the way higher for U.S. stocks this quarter was the tech sector, which skyrocketed nearly 20 percent in the period. Tech giants Apple and Microsoft rose more than 16 percent each for the quarter, but the sector's best performer is an unlikely one: Xerox, which is up more than 60 percent.
The Dow Jones industrial average gained over 11 percent, while the tech-heavy Nasdaq rallied more than 16 percent. The small-cap Russell 2000 was up 14.2 percent.
Leading the way higher for U.S. stocks this quarter was the tech sector, which skyrocketed nearly 20 percent in the period. Tech giants Apple and Microsoft rose more than 16 percent each for the quarter, but the sector's best performer is an unlikely one: Xerox, which is up more than 60 percent.
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