The Cost of Being Retired

What do people really spend in retirement? According to the latest Bureau of Labor Statistics data,  “older households” — defined as those run by someone 65 and older — spend an average of $45,756 a year, or roughly $3,800 a month. That’s about $1,000 less than the monthly average spent by all U.S. households combined.

In some categories, spending does indeed decrease, even in surprising ones like food. In others areas, like health care, life becomes more expensive as you age. Here’s the data shown as a monthly breakdown of how households headed by a retirement-age person spend money, on average, in seven major categories:

• Housing: $1,322 Housing is the biggest spending category for all age groups — retirees included.
• Transportation: $567 The average outlay is about one-third less than the average for households of other ages.
• Health care: $499 
• Food: $483  Retirees spend nearly 20% less than the average household does on food.
• Personal insurance/pensions: $237
• Cash contributions: $202
• Entertainment: $197 Older households spend about as much on fun stuff as do those ages 25 to 34.

Inside the Bond Market

In the midst of a strong year for stocks, bonds continue to suffer. The Bloomberg Barclays U.S. Aggregate Bond index, maybe the most prominent benchmark among bond indexes, is on track to post its second-worst showing in history.

Year to date, the index year is down around 2.5 percent on a total return basis, which takes into account both the value of bonds held in the basket and the yields derived from those assets. The Barclays Agg's weakest returns came in 1994, when the index slipped around 2.9 percent, so it wouldn’t take much for the index to log its worst yearly performance. 

What is the Barclays Agg? It is largely composed of U.S. government bonds and mortgage-backed securities backed by government-sponsored enterprises, including Fannie Mae and Freddie Mac, and underweights the riskier corners of the bond market, including high-yield corporate debt or collateralized loan obligations. Ultra-safe Treasury notes represented around 36 percent of the index in 2017.

September's Jobs Report

The employment outlook slowed slightly in September: The economy added 134,000 jobs over the month, compared with an average monthly gain of  201,000 over the prior 12 months. Nevertheless, the headline unemployment rate ticked down to 3.7 percent from 3.9 percent in August.

It's worth noting that we have now reached a remarkable eight straight years of monthly job growth. That's double the previous record. The unemployment rate is the lowest it's been in nearly 50 years, since 1969.

The key industries: Employment in professional and business services increased by 54,000 in September and has risen by 560,000  over the year. Health care employment rose by 26,000 jobs in September. Construction employment continued to trend up in September  with 23,000 new jobs. and has now added 315,000 jobs over the past 12 months.

Surprisingly Tough Times for Asset Management Stocks

You would think that financial services firms would be doing well in this lengthy bull run, but that's not necessarily so. The shares of America's biggest asset managers have been trampled during this year's market rise.

A selection of 10 large publicly traded asset-manager stocks put together by CNBC are off an average of more than 25 percent from their 52-week highs. Some of the biggest names are the worst off:

• Legg Mason, down 34 percent this year
• Franklin Templeton, down 34 percent
• Janus Henderson, down 36 percent
• AMG, down 37 percent
• Invesco, down 40 percent

The Dangers of a Cyberattack

Are you prepared for a cyberattack? Not if you're like most Americans. According to the new 2018 Chubb Cyber Risk Survey, a whopping 86 percent are clueless not only about what to do, but about how vulnerable their data is, in case of cyber threats.

The drained bank account actually isn’t the biggest risk people face, although that’s what 80 percent of respondents are most worried about. Bigger threats that insinuate themselves further into people’s lives involve Social Security numbers (60 percent), medical records (30 percent), email addresses (18 percent) and public WiFi exposures (12 percent).

People might think they’re safe as long as they have a password, but the report points out that only 40 percent reported using cybersecurity software and just 30 percent regularly change online passwords and use multifactor authentication to log into their accounts. Besides, 67 percent said they “always” or “often” use the same password for multiple sites.

What the Past Six Months Mean

The U.S. stock market has been on a roll the past six months, and it can keep on rolling if the past is any indicator. The S&P 500 rose for six months between April to September, something that has only happened six times since 1928. And each of those times, the stock market has gone on to notch strong gains for the remainder of the year, according to Bespoke Investment Group.

In the previous years that this has happened, the S&P 500 has risen four out of five times in October. The average gain in those October has been 2.38 percent, compared with 0.61 percent for all Octobers.

A solid April-to-September performance also has been a positive signpost for market performance in the fourth quarter. In the previous years when that has happened, stocks have notched an average rise of 9.2 percent in the final three months of the year.

The Big Third Quarter

The S&P 500 soared more than 7 percent in the third quarter, which ended on Friday. That's the strongest quarter for the S&P since the fourth quarter of 2013. The Dow spiked more than 2,100 points, or 9 percent, in the quarter.

Health care was the best-performing sector of the third quarter, surging 14.1 percent, its best quarterly gain since the first quarter of 2013. Industrials and tech, meanwhile, rose 9.7 percent and 8.5 percent.

The strong third quarter on Wall Street could also be a good omen for the rest of the year. When the S&P 500 rises in the third quarter, it has advanced an average of 3.8 percent in the fourth quarter of all years since 1945, according to CFRA Research. In midterm election years, the S&P 500 rallies an average of 7.1 percent in the fourth quarter following a third-quarter gain.