Retiring Around the World

Thinking of retiring abroad? There are lots of other countries where people get to retire earlier than we do here in America. A new study from Aperion Care looked at retirement ages around the world, and here were the lowest:

1. United Arab Emirates, 49
2. China, 56.25
3. Russia, 57.5
4. India, 60
5. Japan, 62.7

On the other hand, the U.S. falls in the Top Five oldest retirement group:

5. Australia, 65
4. Netherlands, 65.75
3. United States, 66
2. Iceland, 67
1. Norway, 67.75

The Fed Speaks

The Federal Reserve raised interest rates on yesterday for the third time this year - and signaled they will raise rates again in December. The Fed's increase of the Fed funds rate to a range of 2 percent to 2.25 percent set the benchmark interest rate at its highest level since April 2008.

The Fed’s statement on Wednesday also included the release of updated economic projections. The most notable change is a steep upgrade in expectations for economic growth this year. Fed officials’ median forecast now calls for GDP growth to hit 3.1 percent in 2018, up from 2.8 percent in June’s projections and substantially higher than the Fed’s forecast for 2.5 percent GDP growth this year at the end of 2017.

The Fed described the economy as “strong,” writing that information since the Fed’s August meeting shows “the labor market has continued to strengthen and that economic activity has been rising at a strong rate.... Household spending and business fixed investment have grown strongly.”

Consumer Confidence Keeps Soaring

Consumers’ outlook on the U.S. economy improved further in September, to the highest level since the waning days of the dot-com boom.  The Conference Board said Tuesday that its index of consumer confidence rose to 138.4, up from 134.7 in August. The consumer confidence index was last higher 18 years ago, in September 2000.

In a sign of optimism on the labor market, the labor differential, measuring the gap between respondents saying jobs are plentiful and those saying jobs are hard to get, widened for a third month to 32.5 percentage points. That’s the biggest difference since January 2001.

Just about all the future readings were strongly positive. For example, 27.6 percent of consumers said they expect better business conditions in next six months, up from 24.4 percent in August. That's the highest that number has been since December 2003.

New Sector on the Block

Friday will see the launch of the brand-new S&P Communications Services sector, a reshuffling of major industry groups that will impact some of the most widely followed and traded names on Wall Street. The new sector includes both companies that facilitate communication operations, as well as ones that offer the content and information. The move was seen as a way to address how some companies span multiple sector categories and don’t always reflect the industry they’re currently classified in.

The new sector will include companies that are currently in three different industry groups: telecommunications, including AT&T and Verizon Communications; technology, including Facebook and Google parent Alphabet; and consumer discretionary, where Walt Disney and Netflix are making the shift.

The new sector will account for nearly 10 percent of the S&P 500’s market capitalization. The weighting of the technology sector will drop from about 26 percent of the overall market to 21 percent, though it will remain the single biggest influence. The discretionary sector will drop to 10 percent from roughly 13 percent.

Investors Unfazed by Dow Records

The U.S. stock market is back at record levels, but investors aren’t in a celebratory mood. According to the weekly survey of sentiment conducted by the American Association of Individual Investors, market participants are feeling somewhat tepid about the market.

That's in spite of a lengthy move higher that took both the S&P 500 and the Dow Jones Industrial Average to records last week. That was the first such milestone that the Dow had reached since its previous record set last January.

But according to the survey, 32 percent of investors describe themselves as bearish on the market, meaning they expect prices will be lower in six months. That represents a slight dip of 0.8 percentage points from the previous week, although it is still above the historical average of 30.5 percent.

Those Soaring Corporate Profits

These are boom times for American corporations. The Commerce Department said this week that after-tax profits across the U.S. rose 16.1 percent in the quarter ended June 30 from a year earlier. That's the largest year-over-year gain in six years.

Lower taxes were a big driver of this. Because of the lower corporate tax rate signed into law last year, taxes paid by U.S. companies in the quarter were down 33 percent from a year earlier, according to the government data, or more than $100 billion at an annual rate.

Strong economic growth also played a role. The Commerce Department recently revised upward its estimate of how fast the U.S. economy grew in the second quarter, to an annual rate of 4.2 percent from an earlier estimate of 4.1 percent.

Safety First

What's been driving the market rally in September? A flight to security. This month, the biggest gainers in the S&P 500 include firms focusing on telecommunications services, consumer staples and utilities—so-called safe sectors whose steady dividend payouts have long made them investor favorites when markets are volatile or declining.

These shares typically lag behind major indexes during rallies, in part because they are perceived to offer limited potential gains. But in September, telecom shares are up 3.1 percent, consumer staples are up 1.5 percent and utilities are up 1.5 percent, versus a 0.1 percent increase in the S&P 500.

Meanwhile, many well-known high-flyers have been tumbling. Apple, Amazon.com and Alphabet each has declined at least 3 percent apiece in September, partly reversing double-digit percentage gains for the year. Facebook has declined more than 8 percent this month, adding to its retreat in the second half of this year.