Since election day, all eyes have been on the stock market in anticipation of what the new administration may bring. In addition, the yield curve has clearly shifted up in anticipation of a potential December interest rate increase. Listen to SH&J’s discussion on the current state of the U.S. economy and the impact of international quantitative easing policies on the dollar.
Today we bring you a special edition of Inside the Economy with SH&J, at a time when our country is divided and there is a great deal of uncertainty surrounding the potential impacts of the outcome of this election. The media has anticipated turbulent stock markets, but this hasn’t been the case thus far. Listen in to learn why and hear more about our unbiased view of the state of the current economy.
As we enter the 4th quarter of 2016, here in the U.S., there is less stress in the financial system than when we started the year and the S&P 500 is at the top end of its forward price-to-earnings ratio. However, overseas, Deutsche Bank is fighting a $14 billion penalty from the U.S. Department of Justice for “mis-selling” mortgage securities before the 2008 recession. Listen in to hear more on the German bank as well as why Japan has such low interest rates despite the amount of sovereign debt outstanding.
It is no surprise that the Fed elected not to raise interest rates this month, although the Consumer Price Index is creeping back to the level the Feds are seeking. In addition, funds from Japan and the Eurozone continue to flood into U.S. based investments and will likely remain here for the foreseeable future. Why is this important? Listen in to hear this week’s economic update.
If you have any questions or topics you would like addressed, please let us know in the comments section below and we will cover them during our next recording on October 10th.
Despite a decline in both the manufacturing and non-manufacturing ISM (Institute for Supply Management) survey indices, 10 year Treasury yields increased to 1.67%. For the first time in a while, we are also starting to see German and Japanese 10 year bonds in positive rate territory. Here in the U.S., household debt remained low and a survey released by BLS (Bureau of Labor Statistics) indicates that 2015 spending increased, mainly due to increased personal insurance and retirement contributions. Listen in to hear more on these issues as well as how total household debt as a percentage of GDP in the U.S. compares to Canada.
Julie Fletcher, CFP® at Sharkey, Howes & Javer wrote an article that was featured in the Denver Post this week. Below is a small excerpt from her piece as well as a link to read the full article.
Why Americans are scared of financial advisors
We can blame the movies, and our “money taboo” society
Since the 1980’s, Hollywood has made millions of dollars creating a slew of movies depicting the greed and crime of the financial services industry. Which is your favorite? “Wall Street,” the “greed is good” movie from 1987? “Boiler Room,” “The Wolf of Wall Street” or “The Big Short”? Based on the media’s portrayal of “financial professionals,” it is no wonder that Americans are scared to death to trust anyone with their hard-earned money. Based on these movies, I would guess that a person who has never met with a financial advisor likely envisions it would go something like this:
As a frightened receptionist walks me through their chaotic cubicle hell, red-faced frenzied suits scream “SELL, SELL NOW!!” into their phones. When we finally reach the conference room, the theme song from “Jaws” runs through my mind as a cigar smoking man wearing a red bow tie slowly turns in his chair to face me. He puffs out smoke as his smile creeps into a wide Cheshire cat grin. “Welcome. Please have a seat. Did you bring all your account statements?” As I cautiously hand my private and personal information to a complete stranger, his grin turns into a frown. “Did you not read our website? I hardly think $150,000 meets our $50 million minimums.”
This week’s Inside the Economy with SH&J brings a focus on inflation, both in the U.S. and globally, with insight on what needs to happen and why it’s important to have an economy with inflation. Will it be entrepreneurs or the government that steps up to the plate? Here in the United States, although existing home and new auto sales have slowed, overall wealth is growing. Listen in to hear about these issues and more, including international equities and employment in Italy.