Credit Keeps Steaming Forward

Consumer borrowing stayed strong for the second straight month in November, a good sign for the economy. The Federal Reserve reported yesterday that total consumer credit increased $22.1 billion in November. That figure is down only slightly from a $25 billion gain in October, which had been the fastest pace in 11 months.

This is the third month out of the past four in which total consumer credit has grown by more than $20 billion. That hadn’t happened in four years. Prior to these recent months, consumer credit had been trending around a $15 billion growth rate.

Revolving credit, which includes things like credit cards, actually cooled off a bit in November, rising by 5.5 percent after a 10.9 percent gain in October. On the other hand, nonrevolving credit, which is typically auto and student loans, picked up, rising 7.1 percent in November after a 6.5 percent gain in the prior month.

Changes at the Top

For years, Apple was the most valuable corporation in the world, with its market valuation exceeding $1 trillion for a time. That changed at the end of November, when Apple stumbled and Microsoft beat it out. November was the first time in eight years that Microsoft was bigger than Apple.

But Microsoft's reign at the top ended up lasting just over a month. Amazon.com reached $797 billion in market value yesterday, overtaking Microsoft's roughly $788 billion valuation to become the most valuable publicly traded company in the U.S.

For its part, Apple isn't even Number Three anymore. Apple finished yesterday with a market cap of $702 billion, placing it at Number Four behind Google-parent Alphabet’s $746 billion.

Some Troubling Trends in Retirement

There's a troubling new look at the confidence of those of us in retirement. According to a new study from Transamerica, only 46 percent of retirees agree that their nest egg is large enough to sustain them throughout retirement.

More than half of them, a total of 56 percent, ended up retired sooner than they planned, at an average age of 63. But just 11 percent of them retired early because they were financially able to do so; 54 percent pointed to employment-related reasons for early retirement, including job loss, organizational changes, general unhappiness, and/or an incentive or buyout, and 47 percent cited health woes or family reasons.

Many are getting by on pretty small incomes: Their estimated median household income is just $32,000, with 25 percent having a household income of less than $25,000. Just 15 percent have an income of $100,000 or more. 

December's Jobs Report

The economy added an unexpectedly strong 312,00 jobs in December, the Bureau of Labor Statistics reported this morning.  U.S. employers hired their highest number of workers in 10 months, while also boosting wages. Nevertheless, the unemployment rate rose to 3.9 percent in December, due to growth in the overall labor force, up from 3.7 percent in November.

The employment figures for October and November were also revised to show 58,000 more jobs added than previously reported. All told, the economy created 2.6 million jobs last year, compared to 2.2 million in 2017.

There was more good news on the wage front. Average hourly earnings rose 11 cents, or 0.4 percent, in December after gaining 0.2 percent in November. That lifted the annual increase in wages to 3.2 percent.

2018's Biggest Winners

In 2019, even the winners had a roller-coaster ride. The biggest-gaining stock in the S&P 500, Advanced Micro Devices, was up 79.6 percent on the year - even though it lost 40 percent of its value in the fourth quarter.

The Top Ten biggest winners in the S&P last year:

1. Advanced Micro Devices (AMD), up 79.6 percent
2. Abiomed (ABMD), up 73.4 percent
3. Fortinet (FTNT),  up 61.2 percent
4. Advance Auto Parts (AAP), up 57.9 percent
5. TripAdvisor (TRIP), up 56.5 percent
6. Chipotle Mexican Grill (CMG), up 49.4 percent
7. Keysight Technologies (KEYS), up 49.2 percent
8. Red Hat (RHT), up 46.2 percent
9. O'Reilly Automotive (ORLY), up 43.1 percent
10. Boston Scientific (BSX), up 42.6 percent

Farewell to 2018

Let's get the bad new out of the way quickly: For the year 2018, the S&P 500 fell 6.2 percent, the Dow Jones industrial average dropped 5.6 percent, and the Nasdaq Composite lost 3.9 percent. That marked the worst annual performances for all three indexes since 2008.

Much of the blame lay on a horrible December. In the last month of the year, the S&P 500 and Dow both logged their worst monthly declines since February 2009, and their worst performances for the month of December since 1931.

How unlikely was the late-year decline? This year marked the first time since 1978 that the Dow finished out the year in the red after rising in the first three quarters. It was the first time the S&P 500 had done so since 1948.

Thoughts for New Year's Day

"Every time you tear a leaf off a calendar, you present a new place for new ideas and progress." ~ Charles Kettering

"A year from now, you're gonna weigh more or less than what you do right now." ~ Dr. Phil McGraw

"All of us every single year, we're a different person. I don't think we're the same person all our lives." ~ Steven Spielberg