Stock Market Commentary
For the week of June 8, 2009
The markets ended the week in positive territory, shrugging off troubling unemployment data released by the Department of Labor. Employers cut fewer jobs than analysts expected, but unemployment rose to 9.4 percent, a 25-year high. The 345,000 jobs lost in May were the smallest monthly loss since September. For the week, the Dow gained 3.18 percent to close at 8,763.13, the S&P rose 2.33 percent to end at 940.09 and the NASDAQ climbed 4.23 percent to finish the week at 1,849.42.
More Out Than In – For each of the previous 25 years (1984-2008), tax receipts collected by the U.S. government during the month of April exceeded outlays paid by the government. The average amount by which tax receipts exceeded outlays during the month of April over the period was $67.6 billion. However outlays exceeded tax receipts by $20.9 billion during April 2009 (Source: Treasury Department, BTN Research).
Another Degree – More than one in four college graduates (27 percent) from the class of 2009 will not attempt to enter the work force immediately but instead plan on attending graduate school (Source: National Association of Colleges and Employers, BTN Research).
I Want It Now – A person born in 1947 is eligible for full Social Security retirement benefits at age 66 or in 2013. If that individual elected to take his/her benefits early at age 62 (i.e., in 2009), the monthly checks will be permanently reduced by 25 percent vs. what he/she would otherwise receive at his/her full retirement age (Source: Social Security Administration, BTN Research).
Reset Arm – The dollar value of ARMs (adjustable rate mortgages) that are expected to be reset from their initial interest rate level will peak in August 2011 and is estimated to be $40 billion for that month. Less than $20 billion of ARMs are expected to be reset this month (June 2009). The previous peak in monthly ARM resets occurred in July, August and September 2008, when $35 billion was reset each month (Source: Credit Suisse, BTN Research).
WEEKLY FOCUS – Tying the Financial Knot
Wedding season is in full swing. On the list of important “to-dos” before saying “I do,” couples should add the following items to ensure they start their life together on the right financial foot.
1. Check the withholding on your paychecks. You may need to adjust one or both.
2. Consider the impact of your combined income on contribution limits for your IRAs.
3. Change the beneficiary on your IRA, 401(k), bank accounts and insurance policies. Putting your spouse’s name on the forms helps ensure assets transfer directly rather than going through probate.
4. Make a will. No it’s not romantic, but it’s necessary.
5. Evaluate life and disability insurance amounts, particularly if you own or will be purchasing a home, so mortgage payments can be made if one of you dies or can’t work.
6. Compare health care insurance to determine who has the most complete and cost-effective coverage.
7. Consider changing auto insurance to a single underwriter, which may qualify you for a multi-car discount. You may get even greater discounts if the same company underwrites your life, disability, homeowners and/or renters insurance.
8. Request and compare your FICO credit scores. If one is significantly lower, that may impact how you title accounts and property.
9. Keep one credit card in your name only to ensure access to emergency funds. Otherwise, if you or your spouse has additional accounts, consider closing accounts or combining balances to reduce fees.
10. Consider using a single financial advisor, even if you each maintain separate investment accounts. He or she will get a better overall picture of your financial situation and goals as a couple.
If your child, grandchild or other family member has recently become engaged or married, give a gift that’s not on the department store registry – a financial consultation. We’d love to help you or a loved one navigate post-nuptial finances. Call our office to schedule an appointment. Please consult your tax and legal advisor for your specific situation.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Written by Securities America. SAI# 298050