WMC- Happy New Year!

December 28, 2015 Follow Us On Facebook, LinkedIn and Twitter! | Kalispell MT | (406) 756-3787 |

CWMP's New Year's Resolution To Our Clients

No matter what specific resolutions you make for 2016, we're here to ensure you have the information and support you need to make sound financial decisions. Happy New Year from the CWMP team!

The Markets

It was a short week, but it wasn't quiet. Oil prices moved higher, according to The Wall Street Journal, after the U.S. Energy Information Administration reported crude-oil inventories fell unexpectedly last year. Analysts had predicted oil supplies would rise. One expert cited by The Wall Street Journal suggested the stockpile decline and subsequent oil price rally owed much to Gulf Coast refiners reducing inventories "to mitigate state ad valorem taxes on year-end crude stocks." If that's the case, the oil price increase may not be sustained. Regardless, improving oil prices gave U.S. stock markets a boost. In particular, the Standard & Poor's 500 Index (S&P 500) benefitted from improving performance in the energy sector: "Of 80 U.S. listed oil and gas producers, all but one - a bankrupt company - rose on the day, with nearly half of the companies up more than 10 percent. Energy shares were the biggest gainers Wednesday in the S&P 500, up 3.8 percent and helped the S&P 500 on the whole gain 1.2 percent in late-afternoon trading." Barron's reported energy stocks had gained 5 percent for the week, but were still off by about 22 percent for the year. The Organization of the Petroleum Exporting Countries (OPEC) released its World Oil Outlook last week. BBC reported OPEC anticipates oil prices will begin to rise in 2016, although its producers' share of the market is expected to shrink by 2020 as rival oil-producers proved to be more resilient in the face of low oil prices than had been expected. LOOKING BACK... Each week 'The Economist Explains' blog expounds on subjects ranging from current events to economics, from philosophical or scientific issues to everyday oddities. Let's take a quick look at a few of its headlines during 2015:  1. Why the Swiss unpegged the Swiss franc (January 18, 2015). Remember when the Swiss National Bank removed its currency peg last January? The Swiss franc realized double-digit gains in value and the Swiss stock market dropped. 2. Everything you want to know about falling oil prices (March 18, 2015). "The main reason for falling prices is increased supply from America thanks to its fracking boom, which has reduced its demand for oil imports. Other countries, notably Saudi Arabia, have been loth to curb supply lest they lose their share of the global oil market." 3. Why so many Dutch people work part time (May 11, 2015). More than one-half of the working population in Netherlands is employed part-time - a higher percentage than anywhere else in the world. "This is partly a relic of prevailing Christian attitudes which said that mothers should be home for tea time and partly down to the wide availability of well-paid "first tier" part-time jobs." 4. What Greece must do to receive a new bail-out (July 14, 2015). After challenging negotiations, Greece and its European creditors cut a deal, allowing the country to remain in the euro area. 5. China's botched stock market rescue (July 30, 2015). Chinese stocks lost nearly a third of their value last summer. China's authorities "resorted to heavy-handed measures to prop up swooning share prices, from pressuring banks to buy stocks to blocking big investors from selling theirs." 6. Why is the Nobel prize in chemistry given for things that are not chemistry (October 7, 2015)? Apparently, five of the last 10 Nobel chemistry prizes have been awarded for pursuits that might better be described as biology. A possible explanation is "the diversity of chemistry prizes reflects the fact that chemistry is found everywhere..." 7. How the Fed will raise interest rates (December 14, 2015). Just as the Fed employed unconventional monetary tools to stimulate the economy, it is using new policy tools to try to increase the Fed funds rate. We hope 2015 has been a memorable and rewarding year for you, and we look forward to working with you in the New Year. Weekly Focus - Think About It "It is not enough to have a good mind; the main thing is to use it well." --Rene Descartes, French philosopher, mathematician, and scientist

New Year's Resolutions

With 2016 just around the corner, it's time to start thinking about your News Year's resolutions. To help you come up with ideas, here are some not so successful resolutions and statistics. Top 5 New Year's Resolutions 1. Lose Weight 2. Get Organized 3. Spend Less, Save More 4. Enjoy Life to the Fullest 5. Stay Fit and Healthy How Long Do People Stick With Their Resolutions? Through the First Week: Past Two Weeks Past One Month Past Six Months 75% 71% 64% 46% No matter what your New Year's resolution is, we wish you the happiest of  New Year's and good fortune!

WMC - It's Not a Surprise!

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Weekly Market Commentary

 

December 14, 2015

The Markets

It's not like it's a surprise! Last week, investors didn't appear to be thrilled with the possibility the Federal Reserve might raise rates this week. They also weren't too impressed by another drop in oil prices. There was red ink everywhere as markets from Australia to Hong Kong, across the Eurozone, and throughout the Americas moved lower last week. Bloomberg reported there was a 74 percent probability of a Fed rate hike at the December Federal Open Market Committee meeting. The Wall Street Journal's survey of business and academic economists put the chance at 97 percent. More than 80 percent of those surveyed said the Fed would lose credibility if it doesn't act in December. It's important to remember the Fed doesn't actually set interest rates. It takes actions designed to influence financial behaviors. Even if the Fed does push to increase interest rates, it remains to be seen whether its efforts will bear fruit. The Financial Times wrote: "...As "lift-off" has drawn closer some analysts have begun to highlight just how experimental this interest rate rise will be. The Fed's bloated balance sheet - swelled by its quantitative easing program - prevents it from using its traditional interest rate tools, so it has unveiled and has been testing new ones. The main new levers are known as the "interest on overnight reserves" and the "overnight reverse repo program," and central bank officials are confident that they will be able to lift the Fed funds rate, which is the main target. But some analysts caution that it could be a choppy take-off." If the Fed acts and interest rates don't respond, there may be further volatility. The Financial Times reported markets almost certainly have priced in a rate hike at this point. We'll find out next week. NEXT YEAR, CHINA'S RENMINBI (A.K.A. YUAN) WILL JOIN THE U.S. DOLLAR, euro, yen, and pound. When it is added to the International Monetary Fund (IMF)'s Special Drawing Rights (SDR) basket - a supplementary foreign exchange reserve asset that is defined and maintained by the IMF. It will become the third weightiest currency in the basket. After the renminbi is added, the U.S. dollar will comprise 42 percent of the basket (unchanged from 2010). The euro will be 31 percent (down from 37 percent in 2010). The renminbi will be 11 percent. The Japanese yen will be 8 percent (down from 9 percent in 2010). The British pound will be 8 percent (down from 11 percent). Managing Director of the IMF Christine Lagarde said: "The Executive Board's decision to include the RMB in the SDR basket is an important milestone in the integration of the Chinese economy into the global financial system. It is also a recognition of the progress that the Chinese authorities have made in the past years in reforming China's monetary and financial systems. The continuation and deepening of these efforts will bring about a more robust international monetary and financial system, which in turn will support the growth and stability of China and the global economy." So, is the renminbi likely to give the U.S. dollar a run for its money? Not any time soon, according to economists surveyed by The Wall Street Journal. Over the next 50 years, they gave China about a 34 percent chance of challenging the dollar. One said, "To match the dollar's appeal, China will need markets as deep as those in the U.S. and to produce economic indicators that are trustworthy." Weekly Focus - Think About It "Power is of two kinds. One is obtained by the fear of punishment and the other by acts of love. Power based on love is a thousand times more effective and permanent then the one derived from fear of punishment." --Mahatma Gandhi, Former leader of the Indian independence movement

How Not To Be A Grinch

How Not To Be A Grinch

We all know who The Grinch is-that nasty, green-colored creature of Dr. Seuss' imagination. He stole Christmas, nearly ruined everything, and then repented at the eleventh hour. Well, you don't have to literally steal gifts out from beneath the tree to ruin the holidays for yourself and your family-all it takes is the wrong attitude.  If you're feeling your inner Grinch start to crawl out of his cave, try a few of these techniques that should have you back to your regular, cheerful self in no time. Make Lists: Make a list of recipes you want to make over the holiday season. Make a list of gifts you need to buy. Make a list of crafts you'd like to make. You get the idea! Use a binder, websites like Pinterest, or apps like Evernote, to keep it all easily accessible. Simplify: Overwhelmed by hosting a holiday meal? Make it a potluck. Stressed at the thought of running all over town to purchase gifts? Buy them online. Keep it simple! Learn to Say No: Don't feel as if you have to attend everything you're invited to. And be sure to schedule days when you're doing absolutely nothing except sitting bundled up on the couch with a good book and a cup of hot cocoa. Take a Break: If you're introverted and are feeling emotionally exhausted because you have family around 24/7-make sure you take frequent breaks to get quiet, alone time. Balancing time with others and time by yourself is always important. Get the Kids Involved:  Kids can do everything from decorating cookies to trimming the tree-as long as you're not a perfectionist who insists on having it exactly your way, which brings us to the next point.

WMC- Flat Is The New Up

Weekly Market Commentary

 

December 7, 2015

The Markets

Anyone looking at U.S. stock market performance last week might assume it was a pretty quiet week. They would be wrong. It was a very bouncy week. U.S. stock markets moved lower on Monday, rebounded on Tuesday, and then appeared to suffer a one-two punch mid-week that knocked indices lower. On Wednesday, the benchmark U.S. oil price sank below $40 a barrel as supply continued to exceed demand, according to The Wall Street Journal (WSJ). Analysts had expected stockpiles of crude oil, gasoline, and other fuels to decline. Instead, stores increased to more than 1.3 billion barrels. The glut of fuel drove energy stock values down and energy stocks led the broader market lower, according to WSJ. Performance did not improve on Thursday. In part, this was because the European Central Bank (ECB) underwhelmed markets when it delivered economic measures that were less stimulative than many had expected. The Financial Times reported the ECB reduced rates and pledged to extend quantitative easing for six additional months, but it did not increase the amount of its bond purchases, which disappointed investors. Stock markets in Europe and the United States lost value on the news. On Friday, a strong jobs report restored investors' enthusiasm and markets regained losses suffered earlier in the week, according to ABC News. The Department of Labor announced 211,000 jobs were added in November, which was more than analysts had expected. Strong employment numbers made the possibility of a Federal Reserve rate hike seem more certain and investors welcomed certainty. The ECB jumped into the good-news pool on Friday, too, announcing it would expand stimulus measures, if necessary. The Standard & Poor's 500, Dow Jones Industrial, and NASDAQ indices were all up for the week. It's That Time Of The Year. No, not the holidays. It's the time when investors begin to consider pundits' forecasts for the coming year. Here are a few of those forecasts: "Flat is the new up," was the catch phrase for Goldman Sachs' analysts last August, and their outlook doesn't appear to have changed for the United States. In Outlook 2016, they predicted U.S. stocks will have limited upside next year and expressed concern that positive economic news may bring additional Fed tightening. Goldman expects global growth to stabilize during 2016 as emerging markets rebound, and Europe and Japan may experience improvement. Jeremy Grantham of GMO, who is known for gloomy outlooks, is not concerned about the Federal Reserve raising rates, according to Financial Times (FT). FT quoted Grantham as saying, "We might have a wobbly few weeks...but I'm sure the Fed will stroke us like you wouldn't believe and the markets will settle down, and most probably go to a new high." Grantham expects the high to be followed by a low. He has been predicting global markets will experience a major decline in 2016 for a couple years, and he anticipates the downturn could be accompanied by global bankruptcies. PWC's Trendsetter Barometer offered a business outlook after surveying corporate executives. After the third quarter of 2015, it found, "U.S. economic fundamentals remain strong, but markets and executives like predictability, and that's not what we've been getting lately... Trendsetter growth forecasts are down, so are plans for [capital expenditure] spending, hiring, and more. It doesn't help that we've entered a contentious 2016 election season..." The Economist had this advice for investors who are reviewing economic forecasts, "Economic forecasting is an art, not a science. Of course, we have to make some guess. The average citizen would be well advised, however, to treat all forecasts with a bucket (not just a pinch) of salt." Weekly Focus - Think About It "Weather forecast for tonight: dark." --George Carlin, American comedian

Holiday Spending

Holiday Spending

 CWMP

Kalispell, Montana 59901     406-756-3787

The Great Recession caused holiday spending to dwindle, but in recent years the amount of money Americans are spending on gifts for the holidays has only increased. According to the American Research Group, holiday spending in 2014 was $861 per family, up 8% from 2013. 

Set a Spending Limit

Before you can maximize your holiday budget, you need to set a limit on what you can comfortably afford to spend. Try your best not to rely on credit cards, as credit counseling agencies see a 25% increase.

Shop with a List

Instead of aimlessly wandering malls and shops, figure out what you're going to purchase before leaving your house. This way, you're not tempted to overspend or buy things you don't need. We've all thrown in an item or two (or ten) for ourselves when holiday shopping, but this is unfortunately the easiest way to go over budget.

Suggest a "Secret Santa"

Most likely, you're not the only one who wants to save a little money this Christmas. If you have a large family or are planning on purchasing gifts for your coworkers, suggest a "Secret Santa" where everyone draws a name and buys a gift for that person. You can set a spending limit of $20 to make sure you don't spend more than necessary.

Bake Treats

Everyone loves homemade goodies, especially teachers and coworkers. Rather than spending hundreds on gifts ($10 gifts for five different teachers and ten different colleagues can add up), spend an afternoon baking bread, cookies, muffins and other holiday treats.

The Bottom Line

It's just too easy to overspend during the holidays. To avoid that hefty credit card bill come January, shop with a purpose, a plan and a fixed budget. Know who you're going to buy for, avoid impulse shopping and shop the sales. The holidays will only wreck your budget if you let them.