Vorisek Financial Weekly Market Update for July 18, 2018

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Good morning!

Strong economies need crude oil to feed their growth.  But disruptions in Africa (Libya) and North America (Canada) are raising concerns about the world supply of oil: will the top producers of crude (Saudi Arabia, Russia, and the United States) be able to increase their output to make up the difference?  The fear is that a reduced supply of oil could lead to higher prices which can reduce global consumption.  The 3 largest oil consumers worldwide are the USA, China and India (source: International Energy Agency).     

US tariffs that have been in place for 6 weeks have not dented investor enthusiasm for domestic stocks at this time.  The S&P 500 finished last week at 2801, its highest close since 2/01/18, and the tech-dominated NASDAQ Composite closed at 7826, its highest closing value ever.  Stock buyers may believe a self-inflicted trade war is a battle that the United States can win, tilting the corporate playing field in favor of American exporters.  The reality is that our nearly 9 ½ year old bull market will change direction at some point, but it didn’t happen last week (source: BTN Research).                

Anthony Kennedy, the longest serving current Supreme Court justice, is retiring at the end of this month.  Kennedy’s 30 ½ years on the nation’s top judicial court ranks him as the 14th longest serving justice in history.  4 of the 9 current justices have served at least 23 years.  Supreme Court justices have “life tenure” (source: Supreme Court).      

Notable Numbers for the Week:

  1. DOLLARS IN, DOLLARS OUT - After 9 months of fiscal year 2018 (i.e., the 9 months ending 6/30/18), the USA has collected $1 of tax receipts for every $1.24 of outlays, creating a deficit to date of $607 billion (source: Treasury Department).

  2. CAPITALIST WITH A CONSCIENCE - 6 out of 7 Millennials (86%) would “consider” taking a cut in pay in order to work for a company that follows “a mission and values” that aligned with their own.  Millennials were born between 1981-97 and are age 21-37 in 2018 (source: LinkedIn Workplace Culture Trends).

  3. REPETITIVE PROCESS - 40% of the robots used in the United States today are in the auto industry (source: Department of Transportation).  

  4. HEAD SOUTH FOR WORK - The government divides the USA into 4 geographical areas: Northeast, South, Midwest and West.  As of May 2018, the Northeast states had 1.075 million job openings while the states in the South had 2.432 million job openings.  The total number of job openings nationwide: 6.638 million (source: Department of Labor).        

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for July 11, 2018

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Good morning!

Washington political decisions are intersecting significantly with the global supply of oil.  The State Department announced last week its intention to cut off all Iranian oil exports by November 2018, i.e., driving the rogue nation’s oil exports from 2.5 million barrels a day to zero.  The attempt to financially squeeze Iran will greatly test the strength of the White House relationship with China and India, the primary importers of Iranian crude.  To replace Iran’s oil in the global market, President Trump is pressuring Saudi Arabia to increase its oil production by 2 million barrels a day, action that OPEC’s largest player could achieve within 6 months but not without additional drilling and expense.  The price of oil closed at $73.80 a barrel last week, up +23% YTD (source: BTN Research). 

Tariffs on an estimated $34 million of Chinese imports went into effect at midnight Washington time last Thursday night (7/05/18), impacting 818 different Chinese products.  Additional tariffs will target as much as $216 million of Chinese imports in the coming months should China retaliate against the US.  To the surprise of many stock market watchers as the 2 largest global economies careen towards a possible trade war, the S&P 500 shrugged off the conflict and gained ground last week with the index closing last Friday up +4.3% YTD (total return) (source: BTN Research).                  

The November mid-term congressional elections, set for 11/06/18, are less than 4 months away.  The S&P 500 gained just +2.2% (total return) in the 4 months leading up to the 2014 mid-terms, a fraction of the +16.0% gained in the 4 months leading up to the 2010 mid-terms (source: BTN Research).       

Notable Numbers for the Week:

  1. HOW HIGH ARE YOURS? - 45 US states collect statewide sales taxes, i.e., 5 states (Alaska, Delaware, Montana, New Hampshire and Oregon) have no state sales tax.  California has the highest state sales tax (7.25%) in the nation (source: Tax Foundation). 

  2. FEWER LINES - A draft of the new Form 1040 for tax year 2018 released in late June 2018 has just 23 lines, compared to 79 lines on the existing Form 1040 tax form (source: Internal Revenue Service).   

  3. KIDS COST MONEY - The annual household costs of a family with 2 adults and 2 children is 140% of the annual household costs of a family with 2 adults and no children (source: Organization for Economic Cooperation and Development). 

  4. NEXT CENTURY - With a life expectancy of 81.3 years, a baby girl born in the United States next year (2019) could anticipate living until the year 2100 (source: National Vital Statistics Reports). 

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for June 27, 2018

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Good morning!

With 1 trading week remaining in the first half of 2018, the S&P 500 is up +4.0% YTD (total return) through Friday 6/22/18.  Over the last 25 years (i.e., 1993-2017), the S&P 500 has produced an average gain of +9.7% per year.  The first 6 months of the year (i.e., January-June) have gained an average of +4.5% over the last 25 years.  The stock index has experienced much success in the 2nd half of the year as it has closed at its calendar year high during the final 6 months of the year (i.e., July-December) 74% of the time since 1950.  In 15 of the last 25 years, the index’s calendar year high has occurred during the month of December (source: BTN Research).          

For the last 35 years (1983-2017), the total income of our nation’s Social Security program (i.e., payroll taxes collected plus interest income) has exceeded the total cost of the program (i.e., benefits paid out plus administrative expenses), a streak that has been projected to end in 2018.  Total Social Security program benefits forecasted to be paid out in 2018: $992 billion or $2.7 billion per day (source: Trustees Report 2018). 

The world has been bracing for a trade war for months as multiple countries have promised to match US tariffs dollar-for-dollar.  The potential impact on American manufacturers, farmers and consumers will play out in the coming months.  American consumers bought $2.41 trillion of imported goods in calendar year 2017.  22% of that total ($526 billion) were purchases of Chinese products, including cell phones, computers and TVs (source: Commerce Department).      

Notable Numbers for the Week:

  1. THE SAME NUMBER - There are as many Americans with outstanding student loan debt (45 million) as there are retired American workers (45 million) who are receiving monthly Social Security retirement benefits (source: Social Security Trustees Report 2018). 

  2. OLDER FOLKS - The population of the United States has doubled since 1950, while the number of Americans at least age 65 has quadrupled since 1950 (source: Social Security).      

  3. BOYS AND GIRLS - A baby girl born in the United States in 2017 has a “life expectancy at birth” of 81.4 years, 55 months longer than the “life expectancy at birth” (76.8 years) of an American baby boy born last year (source: Social Security).

  4. BEFORE TRADE DISPUTES - US farm income has dropped by 52% over the last 5 years because of falling commodity prices (source: Department of Agriculture).

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If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for June 20, 2018

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Good morning!

If the 2007-08 US economy was a “patient” in free-fall, the “medicine” provided by the Federal Reserve was to reduce interest rates to historically low levels to stimulate borrowing and spending by American consumers.  The action, unprecedented in our nation’s history, kept the cost of borrowing at near zero for 7 years until December 2015.  In the subsequent 2 ½ years, the Fed has raised short-term rates 7 times (including last week’s rate hike) and has signaled another 5 possible rate hikes by the end of 2019.  Their logic: the “patient” is now experiencing accelerating growth and rapid job creation, causing the Fed to turn its concern to the possibility of rising inflation and its inherent problems (source: BTN Research).                   

The spread between the 10-year Treasury note yield and the 2-year Treasury note yield fell to just 35 basis points last Thursday 6/14/18, i.e., 2.94% less 2.59%, the tightest spread between the 2 debt instruments since 8/27/07 or almost 10-years ago.  Some, but not all market watchers believe that if expectations for interest rates for the next 2 years are growing, but not expectations for the next 10 years, the implication is that the bond market thinks the Fed will go “too far” in raising short-term rates, leading to a slower US economy and thus lower yields on the longer-end of the curve (source: BTN Research).  

Oil production in the United States reached 10.9 million barrels per day for the week ending 6/08/18, the highest level recorded for our country per records that have been maintained since 1920 or nearly a century ago.  Oil production 10 years ago (June 2008) was just 5.1 million barrels per day (source: US Energy Information Administration). 

Notable Numbers for the Week:

  1. TO AGE NINETY - 25% of Americans that reach age 65 will live at least another 25 years to age 90 (source: Social Security Administration). 

  2. LOTS OF RULES - Medicare covers the cost of 100 days of care at a “skilled nursing facility.”  A new 100-day benefit clock begins if the patient has gone 60 days without requiring a “skilled level of care” (source: Medicare).  

  3. SURPRISE - 23% of households headed by individuals at least age 75 will experience an “extraordinary” out-of-pocket medical expense of at least 1% of household income this year (source: JP Morgan Chase & Co. Institute). 

  4. A FORCE - China has more millennials (400 million) than the population of the United States (328 million).  Millennials were born between 1981-97 and are age 21-37 in 2018 (source: Financial Times).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.
If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for June 13, 2018

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Good morning!

In 1983, Alan Greenspan had yet to begin his 18 ½ year run as Fed Chairman (that started 4 years later in August 1987).  Yet it was in 1983 (35 years ago), that Greenspan first left his financial footprint when he chaired a committee that recommended changes to Social Security that were successfully passed in Congress.  The modifications – pushing back the “normal retirement age” and raising the payroll tax rate – saved the Social Security program from looming insolvency and added a projected 75 years to its lifespan.  Greenspan-type leadership is needed again in 2018.  Last week’s release of the annual Social Security Trustees report stated that “if substantial actions are deferred for several years, the changes necessary to maintain Social Security solvency would be concentrated on fewer years and fewer generations” (source: Social Security Trustees 2018 Report).         

The US trade deficit, i.e., imports exceeding exports, was $46.2 billion in April 2018, our smallest monthly deficit since September 2017.  What’s driving the shrinking deficit – rising exports.  US corporations exported $211.2 billion of goods and services in April, an all-time monthly record for the United States (source: Commerce Department).      

Conventional Wall Street wisdom says that stocks suffer during rising interest rate periods.  The Federal Reserve has raised short-term interest rates 6 times since 12/16/15 (i.e., over the last 30 months), for a total increase of 1.5 percentage points.  Yet over that 2 ½ year period (12/16/15 to last Friday 6/08/18), the S&P 500 has gained +41.1% (total return), an average return of +14.9% per year (source: BTN Research).  

Notable Numbers for the Week:

  1. MORE AND MORE OF THE STATE BUDGET - The 5 retirement systems supporting defined benefit pension plans for state workers in Illinois will require a fiscal year 2019 (i.e., the 12 months that begin 7/01/18) contribution of $8.5 billion, more than triple the $2.8 billion contributed in fiscal year 2009 (source: State of Illinois).  

  2. FIND A NEW BUYER – Since Janet Yellen announced on 9/20/17 a plan to shrink the Fed’s balance sheet by having bonds mature without reinvesting the principal into newly issued bonds, the “securities held outright” by the Fed have declined by $117 billion to $4.1 trillion (source: Federal Reserve). 

  3. NOT SO GOLDEN - 46% of the San Francisco Bay Area residents surveyed plan to move from California within the “next few years” primarily due to the cost of housing and traffic (source: Bay Area Council poll). 

  4. EMAIL – If passed, HR 4610 (“Receiving Electronic Statements to Improve Retiree Earnings Act”) would eliminate the 1974 ERISA requirement to deliver hardcopy retirement plan documents to participants (source: House).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.  If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for June 6, 2018

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Good morning!

Despite growing trade tensions, US stocks advanced late last week, surprising many investors.  The “temporary exemptions” from the steel and aluminum tariffs that had previously been granted to Canada, Mexico and the 28 nations of the European Union all expired last Friday (6/01/18), setting the stage for retaliatory tariffs on a range of US exports.  Instead of being scared off however, stock investors were boosted by the news of a North Korea/US summit that is back on the calendar for next week and a May 2018 American jobless rate of only 3.8%.  The US has not reported a lower unemployment rate since December 1969 (source: Department of Labor).              

The monthly collection of jobs data in the USA is a combination of science and art.  60,000 American households are asked to complete employment surveys by the 12th of the month.  The employment status of the individuals in those 60,000 households is then extrapolated to project national figures for our country’s actual 120 million households, i.e., just 1 out of every 2,000 households provides the data that determined May’s 3.8% jobless rate (source: Department of Labor).  

On 11/30/16 with the price of oil at $49.44 a barrel, the 14-members of OPEC agreed to slash production by 1.2 million barrels a day, along with additional cuts of 600,000 barrels a day from non-OPEC member countries (including Russia) – a combined reduction of 1.8 million barrels a day.  OPEC and Russian oil officials will discuss boosting the global oil supply by 1 million barrels a day when they meet on 6/22/18.  The price of oil closed at $65.81 a barrel on Friday 6/01/18 (source: BTN Research).      

Notable Numbers for the Week:

  1. JUST THREE - The top company in the Fortune 500, an annual evaluation based upon total revenues for the previous calendar year, has been held by just 3 different companies over the 63 years that the magazine has published the rankings (source: Fortune).

  2. STRONG BANKS - No US banks failed during the first 5 months of 2018 (January-May), the first time that has occurred since 2006.  Since 2007, 531 banks have failed, an average of 48 per year over the last 11 years (source: FDIC).  

  3. THEY REALLY OWE NOTHING - An estimated 45% of the 176.1 million tax returns projected to be filed next year for tax year 2018 will legally pay zero federal income tax (source: Tax Policy Center).

  4. JUST IN TIME FOR SUMMER TRAVEL - The Euro was worth $1.1685 as of 5/31/18, down from $1.2012 as of 12/31/17, i.e., Euro down and US dollar up.  A stronger greenback means Americans will pay less to travel in Europe this summer (source: BTN Research).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for May 30, 2018

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Good morning!

The Congressional Budget Office (CBO), the number-crunchers for Congress, released last Thursday (5/24/18) an analysis of President Trump’s 10-year budget forecast that was originally made public by the White House on 2/12/18.  The CBO projects a 10-year cumulative deficit for the country of $9.5 trillion vs. $7.2 trillion of deficits per the White House projection.  The $2.3 trillion variance for the fiscal years 2019-2028 is driven “largely because of differences in economic forecasts” that produced very diverse revenue projections (source: Congressional Budget Office).     

There were 3.85 million births in the United States in 2017, the smallest number of births since 1987 or 30 years ago.  The nation’s “general fertility rate,” defined as the number of births per 1,000 women between the ages of 15-44, was just 60.2 births, a record low rate for birth data that has been tracked nationally since 1909 or for the last 109 years.  The implications for our aging population are dramatic – as the number of Americans aged 65 and older continues to strain the resources of Social Security and Medicare, the number of new taxpayers paying into the system is shrinking each year (source: National Center for Health Statistics).     

58 publicly-held US companies produced at least $1 billion of sales per week in 2017, up from 39 companies that accomplished that level of weekly sales in 2007.  Just 1 domestic company generated more than $1 billion of sales per day during 2017 (source: Fortune). 

Notable Numbers for the Week:

  1. FEELING CONFIDENT - 47% of Americans surveyed in December 2017 believed that there was at least a 75% chance that a diversified stock portfolio would increase in value during 2018.  The 47% who expressed confidence in the 2018 stock market at the end of 2017 was the largest percentage recorded in a survey that has been conducted each December since 2002 (source: University of Michigan).  

  2. UNTOUCHED - 91% of participants in defined contribution plans in the United States, e.g., 401(k) plans, did not change the asset allocation of their retirement assets in 2017 (source: Investment Company Institute). 

  3. THE BIG FOUR - The 4 largest economies within the 28 nations that comprise the European Union (EU) are Germany, the United Kingdom, France and Italy.  The UK will leave the EU on 3/29/19 (source: Eurostat). 

  4. WHO WILL BE HURT? - The average rate nationwide on a 30-year fixed rate mortgage was 4.66% last week, the highest level in the United States since 5/05/11 or 7 years ago (source: Freddie Mac).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for May 23, 2018

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Good morning!

For all the belt tightening that Americans implemented 10 years ago when the global real estate market crashed, today’s consumer is not letting a lack of cash flow get in the way of buying what he/she wants.  Total American household debt reached $13.21 trillion as of 3/31/18, the highest level ever recorded.  Mortgage debt makes up 68% of that total ($8.94 trillion) as home buyers who previously were shut out of the housing market when banks tightened their underwriting requirements are now competing over a diminishing inventory of existing homes.  Student loan debt is also at a record high ($1.41 trillion), having increased +9.2% annually over the last decade.  Remarkably, student loan debt exceeds auto loans ($1.23 trillion) as of the end of the first quarter 2018 (source: Federal Reserve Bank of New York).      

Venezuela is a country in chaos, as reports of food shortages, lack of basic medical care and hyperinflation have become the norm since 2013.  Ironically, the country is sitting on the largest deposit of unextracted proven oil reserves in the world (301 billion barrels), worth $21 trillion at Friday’s closing price of $71.34 a barrel (source: WorldAtlas.com).        

The Senate rejected a budget plan last week from Senator Rand Paul (R-KY) that proposed to balance the USA’s budget in 5 years.  In our nation’s last 60 fiscal years (1958-2017), Washington has operated in the “black” just 6 times, i.e., 1960, 1969, 1998, 1999, 2000 and 2001.  With the mid-term Congressional elections now just 5 ½ months away, 5 out of 6 Americans surveyed (83%) in early May 2018 disapprove of “the way Congress is handling its job” (source: Gallup).      

Notable Numbers for the Week:

  1. HUGE PROFITS - The operating earnings per share of the companies in the S&P 500 in the 1st quarter 2018 were up +26.4% on a year-over-year basis (source: S&P).  

  2. ROBBING PETER TO PAY PAUL - New Jersey passed a 2017 law (“Lottery Enterprise Contribution Act”) that redirects the proceeds from the state’s lottery to the state’s pension system for 30 years.  The lottery funds, about $1 billion annually, was supporting K-12 education in New Jersey (source: Manhattan Institute).      

  3. OIL - From the end of 2016 to Friday 5/11/18, the number of operating oil rigs nationally is up +59% to 1,045 rigs and the field production of crude oil is up +22% to 10.723 million barrels a day (source: Department of Energy).

  4. CHEAPER DRUGS - The US government’s Food and Drug Administration approved 763 generic drugs in 2017, a record number of approvals (source: FDA).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for May 16, 2018

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Good morning!

The USA’s current economic expansion (in its 107th month) is our nation’s 2nd longest expansion based upon data that has been tracked by the government since 1854, i.e., for the last 164 years.  The longest expansion ever in our history: the 120 months that ran from April 1991 through March 2001.  The current stretch of good times also means that we have not had a domestic recession since the country suffered an 18-month economic downturn that ended in June 2009.  The USA has had 18 recessions in the last 100 years, an average of 1 every 67 months (every 5 ½ years), yet as of today we are nearly 9 years removed from our last recession (source: National Bureau of Economic Research). 

The price of oil jumped to its highest level in 3 ½ years as tensions between the US and Iran spiked when President Trump withdrew the US from its 2015 nuclear deal with Tehran.  Geopolitical pressures have added to the efforts of the OPEC countries who have been working to restrain the world supply of crude oil, causing its price to nearly triple in the last 25 months, i.e., from $26.21 per barrel on 2/11/16 to last Friday’s close of $70.70 per barrel (source: NYMEX).    

The US government ran a $214.3 billion surplus in April 2018, the largest monthly surplus ever in US history.  The total was the difference between $510.5 billion of tax receipts (also a monthly record) and $296.2 billion of outlays.  The USA did not collect as much as $510.5 billion in tax receipts in a full fiscal year (all 12 months) until 1980 (source: Treasury Department).         

Notable Numbers for the Week:

  1. BORROW - The Treasury Department auctioned off $17 billion of 30-year bonds with a 3.125% coupon last Thursday 5/10/18.  The new bonds mature on 5/15/2048.  The government has auctioned off 30-year bonds since 1977.  The lowest yield ever on 30-year paper was 2.10% on 7/08/16 (source: Treasury Department). 

  2. NERVOUS FOLKS - Only 37% of American adults under the age of 35 are invested in the stock market today, down from 55% in 2002 (source: Gallup).  

  3. REALLY BIG BATTERIES - Clean-air legislation drafted in the United Kingdom (but not yet passed) would outlaw 98% of the vehicles currently in use by the year 2040.  The proposed rules would require new cars to travel at least 50 miles using only electric power (source: Financial Times).   

  4. OUT OF MY LEAGUE - The median sales price of single family homes for sale today in San Jose, CA is $984,000 (source: Zillow).

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If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.

Vorisek Financial Weekly Market Update for May 9, 2018

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Good morning!

The US trade deficit with China reached a record high of $375.2 billion in 2017, the difference between $130.4 billion of US exports to China and $505.6 billion of US imports from China.  The White House has upped its anti-China trade rhetoric since 3/01/18 when President Trump first announced his plans to impose steel and aluminum tariffs.  The latest salvo from Washington was delivered to Beijing late last week: a demand to reduce the $375 billion trade deficit to just $175 billion by the end of 2020, a call for the Chinese to significantly increase purchases of American exports (source: Commerce Department).        

The 3.9% jobless rate in the United States in April 2018 is the lowest nationwide since December 2000.  In the last 40 years, the unemployment rate has been 3.9% or less in just 5 other months, i.e., 1% of the months over the last 4 decades.  The 6.3 million jobless Americans as of 4/30/18 is down 59% from the dreadful 15.3 million Americans that were lacking employment as of 4/30/10 (source: Labor Department).   

As of 3/31/18, 64% of the 120 million households in the United States are homeowners, a record total of 77 million households.  34% of the 77 million homeowners (26 million households) are mortgage debt-free (source: ATTOM).                       

Notable Numbers for the Week:

  1. FIVE DAYS - The best 5 trading days for the S&P 500 over the last 10 years (2008-2017) gained +50.6% (total return), more than the +50.1% gained by the other 2,513 trading days in the decade (source: BTN Research).   

  2. INCREASING DEMAND - The global consumption of crude oil is projected to exceed 100 million barrels a day in the 3rd quarter 2018, the first time ever in history that consumption has reached that level.  In 2017 the USA consumed 19.9 million barrels a day of crude oil that had been refined into gasoline, diesel fuel, heating oil and jet fuel (source: Energy Information Administration).   

  3. RAPID CITY OR JACKSONVILLE? - The top 3 states for retirement in 2018 are Florida, Colorado and South Dakota.  This subjective evaluation was based upon 41 metrics that assessed affordability, health care, quality of life, crime, weather and the state’s tax environment (source: WalletHub). 

  4. YOU’RE OUT, THEY’RE IN - Mid-term elections occur on 11/06/18 or 6 months from yesterday.  All 435 House seats and 33 Senate seats are up for reelection in November.  In the last 4 mid-term elections (2002, 2006, 2010 and 2014), the balance of power changed in at least 1 of the 2 congressional institutions (source: BTN Research).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.