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Showing posts from February, 2017

A Key Trump-Rally Indicator Starts to Crack

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The so-called Trump reflation trade - which anticipates increased inflation and rising interest rates - is showing signs of breaking down as many bond investors anticipate that actual inflation, rates, and economic growth won't rise nearly as fast under Trump as originally expected, according to How Investors Can Prepare for a Bond Bear Market .) Bloomberg. One key indicator suggesting this less than optimistic outlook is on the 10-year Treasury note, which rallied earlier this week in its longest bull streak since last summer. This price action signals to some investors that the long-anticipated end to the three-decade rally in bond markets may not have yet turned a corner. (See also: 10-Year Note's Big Advance "The wager against Treasuries, among the most resilient trades in the wake of Donald Trump’s election, is showing signs of crumbling," according to Bloomberg in a February 8 article. "The benchmark 10-year note gained for...

Healthier Credit Scores Point to Bullish Economy

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Investors have more than recovered their losses following the Great Recession, but the consumer recovery has been somewhat slower. After reaching 10% in late 2009, the unemployment rate only recently returned to its pre-crisis levels last year. The good news is that the economy appears to have stabilized and recent credit rating data shows that consumer credit is healthier than ever in nearly every city measured. Here's a look at Experian’s 2016 State of Credit report and what the data tells us about the economic recovery and outlook moving further into the new year. (For related reading, see:  Stocks Begin the Year on a High Note. ) Improving Credit Scores The most surprising takeaway from Experian’s 2016 State of Credit report is the broad increase in credit scores across the nation. Glendive, Mont., was the only city reporting a decline in credit scores while Victoria and Odessa-Midland in Texas were the only cities with scores that re...

Five Questions to Ask About Your Company's 401(k) Plan

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If you are like 80% of U.S. workers (89% of those in companies with 500-plus employees), you have access to a defined-contribution plan, such as a 401(k). Because each plan is unique, it's important to find out the plan's details and your options. Here are five questions you should ask about your company's 401(k) plan . 1. Does the Company Match My Contributions? This is perhaps the most important question to ask because a company match can significantly increase the value of your retirement account. It's common for employers to match a percentage of your contribution. Let's say you make $50,000 a year and contribute 5% of your salary ($2,500). Your company matches 50% of your contribution, which adds $1,250 to your account. The employer contribution may be limited by the plan (for example, the plan may match 50% up to 4% of your salary), or by your annual contribution limit as set by the IRS. If your company does match, try to contribute at least up to...

Top 25 Cities Where You Can Live Large on Less Than $70k

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We’ve all heard the real estate mantra: location, location, location. As far as price is concerned,  where  a house is located is typically more important than the actual features of the home. That’s why you can buy a sprawling six-bedroom, six-bath house for less than $250,000 in some markets and pay close to $1 million for a tiny one-bedroom condo in New York City. Beyond real estate values, location also affects the overall cost of living – what you pay not just for housing, but also for food, transportation, healthcare and other everyday expenses. Salaries, of course, play an important role: A smaller salary goes further in places with a lower cost of living, while a large salary might be barely enough to get by on in an expensive city. (See also: 5 U.S. Cities with High Paychecks and a Low Cost of Living). Top 25 Cities Where You Can Live Large on $70K a Year With this in mind, job-hunting site Glassdoor recently came up with a cost-of-liv...

Curb Your Enthusiasm Into Cisco Earnings (CSCO)

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Cisco Systems Inc. (CSCO) has dropped off the radar of many tech sector enthusiasts in recent years, with the company’s old-school networking technology translating into slow growth and even slower price movement. However, the stock has posted sizable gains since hitting a 21-month low in the first quarter of 2016 and could add to its winning streak following the Feb. 15 earnings report. That confessional will mark the traditional end to a fourth quarter earnings season that’s posted many upside surprises. However, substantial gains after the election discounted the majority of positive results, generating a low volume first quarter tape while triggering divergences across asset classes, due to confusion about economic prospects under the Trump administration. This lethargy could undermine CSCO price action following the results. CSCO Long-Term Chart (1993–2017) The stock split eight times during a rapid 1990s ascent underpinned by membership in the legendary Four Horsem...

Strong Earnings and Tax Cuts Send Stocks Higher (SPY, DIA)

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The major stock market indexes moved significantly higher over the past week, as of mid-day trading on Friday afternoon. President Trump’s promises to implement broad tax cuts and implement other pro-business policies helped boost equities to new all-time highs, while strong corporate earnings helped support valuations to some extent. The financial sector was the single largest beneficiary from these regulatory cutbacks, but the energy sector also received a boost from rising crude oil prices that helped boost earnings. International markets followed the U.S. markets higher over the past week. Japan’s Nikkei 225 rose 2.43%; Germany’s DAX 30 rose 0.13%; and, Britain’s FTSE 100 rose 0.93%. In Europe, the regional economy continued to keep pace or outperform the United States economy, while valuations are much more reasonable by many measures. In Asia, the Bank of Japan forecast stronger than expected growth over the coming quarters due to the rebounding gl...