Tag Archive | "Stock Market"

Congress Has Six Weeks to Avoid Debt Ceiling Crisis

On Monday, Treasury Secretary Jack Lew gave Congress until the middle of October to raise the U.S. debt ceiling, or risk a possible debt default. This means that the rate of currently authorized spending will drive the U.S. debt above the $16.7 trillion debt limit.

What makes this a bit confusing is that it will occur two weeks after Congress must pass the FY 2014 budget, due September 30. Many Republicans said they will only pass a budget that takes away funding (defunds) Obamacare.

What Will Probably Happen

Congress won’t risk a repeat of the 2011 debt ceiling crisis. This was devastating to the economy, and no one won. Instead, it will pass a short-term continuing resolution to raise the debt ceiling by October 15, just like it has throughout history. House Speaker John Boehner can pass this debt ceiling override, even without 100% of Republicans agreeing.

However, this is only a temporary fix. The FY 2014 budget needs to be passed, or many government agencies will run out of money as of the end of September (the end of the Federal fiscal year). This is a bigger issue. Republicans will insist that nothing will be passed unless Obamacare is defunded. Therefore, the budget probably won’t be passed.

This isn’t as dire as it sounds. The FY 2013 budget has never been approved, either. Instead, Congress enacted a continuing spending resolution in October 2012 and March 2013.

That’s probably what will happen with the FY 2014 budget. This means that spending will continue at current levels, continuing the sequestration spending cuts.

How It Affects You

You will hear a lot of reports in the news that there could be another crisis brewing. This could disrupt the stock market, and your investments. Gold prices will probably rise, like they did in 2011.

However, in all likelihood, it will pass over by November. Your best bet is to focus on leading economic indicators, to see how the real economy is performing. For example, yesterday’s Durable Goods Orders report showed there could be a temporary soft spot.

Related Articles

  • Who Owns the U.S. Debt?
  • Watch the Video: What Is the National Debt?
  • The History of the U.S. Debt Clock

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Best iOS apps for August 2013

Top 5 Stock Market Apps for iOS

Best iOS apps for August 2013I found some great stock market apps for iPhone, iPod touch and iPad. These apps help with managing your portfolio, researching stock picks and getting real time market news. Some have technical analysis features and let you do virtual trading try out investment strategies. Check out my iOS apps of month for August, 2013:

  • StockWatch for iPhone
  • Real-time Stock Tracker + Alert
  • StockTouch for iOS
  • Thomson Reuters News Pro for iOS
  • Stock Wars – Virtual Investing
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Posted in SoftwareComments Off

Why Retail Sales Will Improve in the Next Six Months

Retail sales reached $424.5 billion in July, rising just .2% after increasing .4% in June. Investors, who were upset about June’s report, were happy about the July report. Why, since it was worse? Because they were focused on the core retail sales, which excludes the volatile categories of autos, gas and building supplies. It rose .5%, its largest gain in seven months, compared to just a 0.15% increase in June. The core retail sales is seen as a more accurate predictor of consumers’ confidence and future shopping habits. This is especially important as we head into the fall and the all-important holiday shopping season.  (Source: U.S. Commerce Dept, U.S. Retail Sales, August 13, 2013)

However, many retailers are worried that back-to-school sales won’t do as well this year. The National Retail Federation forecast sales will drop 12%, to $26.72 billion, after a record 2012. The International Council of Shopping Centers projected an increase of 3.1%, but that’s the smallest gain since 2009.

There are many reasons for their pessimism. First, the payroll tax holiday ended in January, reducing most families’ disposable income. Second, people have changed shopping habits, so consumers are now waiting until they absolutely need to buy things. (Source: CBS Marketwatch, Back to School Sale Are a Tough Test for Retailers, August 12, 2013)

However, these are outweighed by rising home prices, and the strongest stock-market gains in years. As a result, many families feel more confident and are wealthier, even though their actual incomes may not have risen. As a result, retail sales are rising — and will continue to do so — despite the setbacks.

How It Affects You

Consumer spending drives 70% of U.S. economic output. As home values and the stock market continues to rise, expect more spending on high-value items. If you’re a retailer, focus on providing that value whether it’s personalized customer service, intriguingly useful items, or engaging displays. Customers want to celebrate their “wealth” without spending more of their income. That’s the difference between Dollar Tree and K-Mart. Dollar Tree doesn’t just rely on the low price to attract customers. They also manage to package high-value items attractively, making the shopping experience fun.

As consumer spending rises, so with the total economic output. Look for continued prosperity this fall, even if the Federal Reserve tapers its QE purchases.

Related Articles

  • Why Is Black Friday So Important to Retailers?
  • Consumer Spending Trends
  • What Are U.S. Retail Sales?

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Two of the five best stock market Android apps for 2013 are JStock and USA TODAY Portfolio Tracker.

Best Stock Market Apps for Android

Two of the five best stock market Android apps for 2013 are JStock and USA TODAY Portfolio Tracker.This month’s picks for the best Android apps are stock market apps.  I’m really impressed with how far these apps have come over the past couple of years, although the hardware that runs them is largely responsible for all the capabilities you’ll get with one or more of these.  Of course, you get quotes (some are real time) and news, but now you can stream video, have access to international exchanges and use technical analysis tools.  Your brokerage may offer a great a app, so these are really best for those who want to consolidate their portfolio information from multiple brokerages in one place, or as a supplement to fill any gaps your brokerage’s app may have.

My picks for the best Android stock market apps for 2013 are:

  • Bloomberg for Smartphone
  • USA TODAY Portfolio Tracker
  • JStock Android – Stock Market
  • TheStreet Mobile
  • Stock Market Live Wallpaper

Image: JStock Android – Stock Market and USA TODAY Portfolio Tracker

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Source: About.com


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Posted in SoftwareComments Off

A Data-Based Approach to Saving

I found an interesting article on Lifehacker about how much you need to save for retirement based on stock market data going back to the 19th Century. A financial planning professor from American College ran the numbers to see whether it’s possible to generate enough retirement income in any market. Past performance is no indicator of what will happen in the future, but if you like statistics this is the chart for you.

Source: About.com


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Posted in FinanceComments Off

Economy Added 162,000 Jobs in July

There were 162,000 jobs added in July, slightly more than the 150,000 minimum required for healthy economic growth. This means that third quarter economic growth will probably continue at the anemic 1.7% rate that was revealed in yesterday’s GDP report. Job growth was driven by retail (46,800), restaurants (23,000), and financial services (15,000). Both the May and June reports were revised down by about ten percent by the Bureau of Labor Statistics.

The unemployment rate dropped to 7.4%, mainly because job seekers have dropped out of the labor force. (The labor participation rate dropped from 63.5% to 63.4%.) Many of these are going back to school, retiring or leaving to take care of relatives. The number of people who dropped out because they gave up looking for work declined, from 1.027 million 988,000. The total number of unemployed is now 11.5 million. (Source: BLS, Employment Situation Summary, August 2, 2013

How This Affects You

This biggest concern for job seekers is that most of the employment gains are in relatively low-paying retail and restaurant sectors. Many of these position only pay the minimum wage, which is $7.25 an hour in the U.S. — putting most families below the Federal poverty level.

This lackluster report means the Fed may not start tapering off Quantitative Easing until past September. That’s why the stock market didn’t really fall further. Investors are more concerneed about Fed tapering than a lackluster jobs report.

Related Jobs Articles

  • Current Employment Statistics
  • Current Unemployment Statistics
  • What’s the Difference Between the Three Jobs Reports?

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Business Investment Up 4.2% in June

Companies ordered $244.5 billion in durable goods, during June. This 4.2% increase in orders means economic growth will remain strong. That’s because businesses are confident enough in the future to purchase the machinery and equipment needed to boost supply.

This confidence builds on the 5.2% rise in May, and April’s 3.6% increase. As usual, transportation orders (mostly commercial aircraft) rose 12.8% alone, $87.1 billion.

Shipments of previously ordered durable goods were flat. That means second quarter Gross Domestic Product (GDP) will probably be disappointing, as shipments are included in the quarterly GDP report due Wednesday. (Source: Census Bureau, Advance Report on Durable Goods, July 25, 2013)

How This Affects You

Durable goods orders show what’s happening in the real economy, as opposed to the stock market. As business increase their orders for capital equipment, they will surely need people to run the machinery and equipment, and maintain the trucks and aircraft. These orders can take nine months or a year to fill, so these added jobs might not show up for a year or more. However, it does mean that companies believe the future is bright enough to make these expensive investments.

Related Articles

  • Durable Goods as a Component of GDP
  • Other Leading Economic Indicators
  • Types of Manufacturing Jobs

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Things To Remember About Making Money When the Financial World Falls Into Crisis

It has been said that most fortunes are built during a crisis of some sort.  It is true that a stock market crash or recession offers significant opportunity to those who are looking for it and have prepared themselves to be ready for such a moment.  Here are a few things to help you remember how to keep your head about you during a panic or meltdown …

Source: About.com


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Posted in InvestingComments Off

Bernanke Testimony Calms Markets, Depresses Gold

Federal Reserve Chairman Ben Bernanke confirmed that the Fed expects to begin tapering its Quantitative Easing sometime in the next few months as long as the economy continues to improve. Specifically, that means unemployment is dropping to the Fed’s target of 7.2% – 7.3%  (it’s currently at 7.6%). The Fed would also need to see GDP approach its targeted range of 2.3% – 2.6% (it was 1.8% in the first quarter). Last, but not least, the core inflation rate would need to be closer to the 2% Fed target  (it’s currently at 1.6%).

Bernanke added that the Fed would end QE within the first six months next year, as long as unemployment was headed toward a 6.5% – 6.8% range, GDP was chugging along at 3% – 3.5%, and inflation was around 2% year-over-year. Most important, the Fed plans to keep the Fed funds rate at zero until 2015, unless the economy does much better than the Fed’s forecast. (Source: CNBC, Fed to begin tapering bond purchases later this year, July 17, 2013)

How It Affects You

Since this is the same message the Fed’s been saying all along, stock market investors reacted calmly. Gold, however, dropped to $1,282 an ounce — exactly what it usually does during an economic recovery.

The yield on the benchmark 10-year Treasury note dropped to 1.47%. However, expect it to resume its upward path over the next year, as demand for this ultra-safe investment declines. That means fixed-rate mortgages will become more expensive.  For more, see How Do Treasury Yields Work?

On the other hand, short-term rates, like those on money market accounts and other savings, will remain low until 2015. That because they follow the Fed funds rate. That’s good for the stock market, as investors shift into higher-yielding dividend-paying stocks. Talk to your financial planner about rebalancing your investments to make sure they are well-diversified.

Related Reading

  • What Is a Well-Diversified Investment?
  • How Treasury Yields Affect Mortgage Interest Rates
  • Gold Price History

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Mortgage Rates Hit Two-Year High But Won’t Hurt Housing Recovery

Interest rates on 30-year fixed-rate mortgages rose to an average 4.66%, a two-year high. That’s more than a point above the 3.52% rate set just two months ago (on May 1). Rates on other mortgages followed suite: the 15-year fixed-rate mortgage rose to 3.75%, up from 3.62% last week. (Source: Bankrate.com, Mortgages reach highest levels in 2 years)

Even the rate on the 5/1 adjustable-rate mortgage rose to 3.63%, up from 3.48% last week. This just shows how much upward pressure there is on interest rates, since these variable rates usually follows the Fed funds rate, which hasn’t moved since 2008 and won’t change until 2015.

Fixed rates, like the 30-year rate, follow the yield on the 30-year Treasury bond, which follows the yield on the benchmark 10-year Treasury note. The yield on the 30-year Treasury is 3.64%, up from 3.47% last week.

What It Means to You

Interest rates for fixed-rate mortgages will keep going up. That’s because investors, who are finally becoming confident about the strength of the recovery, would rather put their money to work in the stock market than in Treasuries. Remember, last year the yield on the 10-year Treasury note reached at a 200-year low (at 1.442% on June 1, 2012). Back then, investors were worried about the eurozone debt crisis and the outcome of the 2012 Presidential election.

Will this hurt the housing market recovery? No, because home prices are also going up quickly. Prices in the 20 largest cities rose 12% in April. This was the biggest year-over-year gain since March 2006, according to the Case-Shiller housing report. Sure, as mortage rates rise it will price many homebuyers out of the market. However, it will push others into buying that home now, instead of waiting until later. Others will simply buy a smaller or less expensive home to compensate for interest rate increases. As long as buyers are confident that home prices are on the upswing, they will find a way to make that investment.

Related Articles

  • Inflation Rate: Current Rate, History and Forecast
  • Current Fed Funds Rate
  • How to Use the Treasury Yield Curve to Predict the Future

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