Vorisek Financial Weekly Market Update for June 7th, 2017

Good morning!

The S&P 500 may be up +9.9% YTD (total return) through Friday 6/02/17, but only 27% of stock investors are currently bullish on US equities for the upcoming 6 months.  Ironically just 5 days before a bull market began in March 2009, only 19% of individual investors were “bullish” on US stocks at that time.  That bull market run will begin its 100th month at the end of the upcoming week (Friday 6/09/17), having gained +325% in the process (source: AAII).   

The 4.3% national unemployment rate that was just released for May 2017 is a rate last seen in the United States in May 2001 or 16 years ago.  During the global real estate recession that began in 2008, our national jobless rate peaked at 10.0% in October 2009, representing 15.4 million out-of-work Americans.  The latest 4.3% jobless rate equates to 6.9 million individuals actively looking for employment.  One ongoing conundrum for economists: a tumbling jobless rate typically is a precursor to rising wage inflation.  However in 2017, wage inflation remains stubbornly low (source: Department of Labor).         

Their plate may be full, but their time is limited.  Over the next 8 weeks (through the end of July 2017), Congress will be in session just 27 legislative days.  At that point, lawmakers will begin their traditional 5-week summer recess.  Still remaining on Washington’s to-do list: raising the nation’s $19.8 trillion debt ceiling; set spending guidelines for fiscal year 2018 spending (which begins 10/01/17); modify the Affordable Care Act (ACA) or replace it with some version of the House’s American Health Care Act (AHCA); tax reform for both individuals and corporations (source: Congress).         

Notable Numbers for the Week:

1.     THE REALLY RICH - The top 0.1% of US taxpayers (i.e., top 1 out of every 1,000 taxpayers) paid 19.9% of all federal income tax for the 2014 tax year (source: Internal Revenue Service). 

2.     WHAT TO CHARGE? - Health insurance companies have a 6/21/17 deadline for the submission of a “qualified health plan” (QHP) application for participation in 2018 ACA exchanges.  The application must include 2018 health insurance premium rates (source: Centers for Medicare and Medicaid Services). 

3.     KEEPS ME UP - 60% of 2,652 full-time employees surveyed in November 2016 “worry about money.”  30% of those surveyed “lay awake at night” worrying about money (source: MetLife). 

4.     ALMOST HALF - 47% of 2,749 adults surveyed in February 2017 have at least $25,000 of debt, not counting any mortgage debt they have on their home (source: Northwestern Mutual). 

 

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