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for Congress, released last Thursday (5/24/18) an analysis of President Trump’s 10-year budget forecast that was originally made public by the White House on 2/12/18.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).

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