Fund Managers Look Overseas

The hottest category in stock funds right now: Europe. In April, allocations to equities in the eurozone jumped to a 15-month high, according to the latest survey of fund managers by Bank of America Merrill Lynch.

Meanwhile, allocations to U.S. equities dropped to their lowest level since early 2008. Some 83 percent of the respondents - a record for this particular survey - said U.S. equities were overvalued. Nearly a third of investors said global equities were overvalued, which is close to a 17-year high in that reading.

Fund managers also boosted their cash allocations slightly, up to 4.9 percent in April from 4.8 percent in March. The 10-year average for cash allocations is 4.5 percent.

Good News, Bad News

First the good news: Median usual weekly earnings for full-time workers rose 3.9 percent in the first quarter from a year earlier, the Labor Department said yesterday. That was the best gain since late 2008.

Nearly eight years after the recession ended, weekly pay is nearing the 4 percent annual growth pace that was reached in the prior two economic expansions. That’s a sign that the economy has returned to full health.

But there's some bad news: When adjusting for inflation, paychecks are growing more slowly than they were a year ago. Inflation is still fairly low, but higher than it was in 2015. When factoring in price changes, weekly earnings rose just 1.2 percent from a year earlier. That matches the fourth quarter of 2016 as the smallest advance since late 2014.

Where Your Tax Money Goes

Today is tax day, when most Americans file their income taxes. The Wall Street Journal has helpfully broken down where our tax money goes. For every $100 you pay in federal taxes:

• Social Security gets $23.61    
• Medicare  gets  $15.26    
• National defense  gets  $15.24    
• Medicaid  gets  $9.55    
• Interest  claims  $6.25    
• Other spending  claims  $4.94    
• Veterans  get  $4.58    
• Civilian federal retirement gets   $2.57    
• Transportation  gets  $2.39    
• Refundable credits get  $2.21

The Slowing Sales Economy

Consumer retail sales in March fell unexpectedly by 0.2 percent, but that's not the end of the issue. At the same time, February’s previously recorded gain of 0.1 percent was revised down to a negative 0.3 percent. Those were the weakest consecutive monthly declines since the first two months of 2015.

The main headwind came from auto dealerships and gas stations. Auto deal sales fell to $87.8 billion from $89.1 billion in February, down from $90 billion in January. Gas station sales fell to $36.5 billion from $36.8 billion in February.

Aside from those two categories, though, sales pretty much treaded water in March. Excluding cars and gas, retail sales were up 0.1 percent last month.

More Oil Woes

As the price of oil remains fairly low, there's a new complicating factor. Global oil demand is expected to grow at a slower pace for the second year in a row in 2016, the International Energy Agency said yesterday.

OPEC launched an effort this year to cut almost 1.8 million barrels a day of oil, with help from other countries, including Russia, the world’s largest crude producer. And OPEC’s oil production fell by 365,000 barrels a day in March.

But it doesn't seem to be enough to lift prices. The IEA said the production cuts so far have had just a limited effect on massive levels of stored oil, which built up in 2015 and 2016 as traders bought cheap crude to sell later at higher prices. Combined with slack demand, that may keep prices low for some time.

The Amazing Shrinking Stock

One of the most amazing stories in the stock market is about a company called Dryships, a Greek shipping company. When companies grow, their stocks often split, but Dryships has fallen on hard times, and its stock has reverse-split - by a whopping 48,000 to 1.

Let's say you owned 48,000 shares of Dryships back in early 2016. It had a reverse split of 1-25 that March, which means your original 48,000 shares were now just 1,920 shares. Five months later, in August, it did another 1-4 reverse split, reducing the 1,920 shares down to 480. Just three months later, there was a 1-15 split, so those 480 shares you now held were reduced to just 32 shares. In January of this year, Dryships did a reverse split of 1-8, which reduced those 32 shares to just four. Then, this week it did another reverse split of 1-4 shares, reducing your original 48,000 down to just one measly share.

On a split-adjusted basis, Dryships was trading at over $8,000 per share back in early 2016. After all those reverse splits, it now trades at under $2 per share.

Healthy, Wealthy and Wise

Being wealthy has a lot of perks attached to it, but according to a new study in the British medical journal the Lancet, the rich get the biggest perk of all. They get to live longer.

In the United States, the wealthy live as much as 15 years longer than their poorer compatriots.  The studies not only find the richest 1 percent live up to 15 years longer than the poorest 1 percent, but that the gap in life expectancy between rich and poor has increased in recent decades.

The poorest among us are the ones on whom the system has taken the biggest toll, the Lancet reports. In fact, life expectancies have fallen in some groups despite advances in treatment. Women in the poorest 20 percent, born between 1930 and 1960, statistically lived four years less than women in the richest 20 percent.