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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