The British Economy Has Been Boosted 5-21-18

The Markets

Too much? Too little? Or just right? 

U.S. stock markets were relatively calm, although they finished the week lower. U.S. Treasury yields hit a 7-year high and finished the week above 3 percent. While these were notable, the most remarkable events last week occurred beyond our borders. These include:

• The Vatican publishing a position paper on financial markets. Its opening was, “Economic and financial issues draw our attention today as never before because of the growing influence of financial markets on the material well-being of most of humankind. What is needed, on the one hand, is an appropriate regulation of the dynamics of the markets and, on the other hand, a clear ethical foundation that assures a well-being realized through the quality of human relationships rather than merely through economic mechanisms that by themselves cannot attain it.”

• The royal wedding boosting the British economy. A normal Britain wedding costs about £18 thousand and includes about 80 guests. Prince Harry’s nuptials were a bit more lavish. A wedding planning company estimated the cost of hosting 600 or more guests at £32 million ($43 million in U.S. dollars). The largest component of the cost was £30 million for security, which included drone destroyers.

• Venezuela’s oil-based economy continuing to collapse as oil prices rise. “Venezuela leads the world in two things: oil reserves and incompetence,” opened The Washington Post. Poor management of the state-run oil industry has caused production to drop 23 percent since December. The country’s declining production helped push oil prices higher last week. Prices are at levels last seen in 2014, reported Financial Times. Regardless of the country’s economic woes, this weekend’s election is not expected to oust President Nicolás Maduro.

Rising oil prices have pushed the cost of gas higher, but that’s not expected to deter Memorial Day travelers, according to USA Today. We wish you safe travels during the holiday weekend.

DID YOU KNOW THERE’S A BILLIONAIRE CENSUS? 

Last week, the fifth edition of the Billionaire Census was released. Apparently, the wealth of billionaires increased by 24 percent during 2017. In addition, the billionaire population, which had suffered reduced numbers since 2015, expanded. It now includes 2,754 individuals. The previous high was 2,473 in 2015. According to Wealth-X:

• 816 live in the Asia-Pacific region
• 884 live in the Americas
• 1,054 live in Europe, the Middle East, and Africa

There is a bit of disagreement about the size of the ‘Three-Comma Club’ and the rate at which its wealth is increasing. In March 2018, Forbes reported there were “…2,208 billionaires from 72 countries and territories including the first ever from Hungary and Zimbabwe. This elite group is worth $9.1 trillion, up 18 percent since last year. Their average net worth is a record $4.1 billion. Americans lead the way with a record 585 billionaires, followed by Mainland China with 373.”

Two hundred and fifty-six women made the list, including 42 new additions.

The Giving Pledge is another exclusive group that some billionaires have joined. The objective of the Pledge is to “…help address society’s most pressing problems by inviting the world’s wealthiest individuals and families to commit more than half of their wealth to philanthropy or charitable causes either during their lifetime or in their will.”

As of February 2018, 175 billionaires from 22 countries had joined.

Weekly Focus – Think About It 

“Philanthropy is almost the only virtue which is sufficiently appreciated by mankind.” 

--Henry David Thoreau, American essayist and naturalist

The Employment Picture Has Shifted 5/14/18

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How do employers lure staff in a tightening labor market? The curly tail grubs and spinnies of the business world are higher wages and better benefits.  

During the past decade, the employment picture in the United States has shifted dramatically. In mid-2009, 15.4 million unemployed Americans were chasing 2.2 million available jobs. At the end of 2017, just 6.6 million Americans were unemployed, and employers were casting eagerly to fill 6.6 million open jobs, reports Barron’s.

Bloomberg offered some colorful examples:

“Want ads for truck drivers to haul crude oil in Texas are touting salaries as high as $150,000 a year. Some nurses are getting $25,000 signing bonuses. The U.S. unemployment rate just fell to 3.9 percent, one tick away from its lowest since the 1960's. And, on May 8, the Bureau of Labor Statistics reported there are 6.5 million unfilled jobs in the United States, the most on record. Some employers say they’re feeling the squeeze.”

Clearly, wages are moving higher for some types of jobs, but they’re not increasing everywhere. Last week, the Bureau of Labor Statistics reported real average hourly earnings for all employees were flat from March to April. ‘Real wages’ mean wages after inflation is subtracted.

The National Federation of Independent Business’ Small Business Optimism Index hit a record high in April, as small companies reported record profits. It was the 17th consecutive month of record optimism.

Major U.S. stock market indices moved higher last week as did many global stock market indices.

WHAT DO YOU WISH YOU HAD KNOWN BEFORE YOU BECAME A PARENT? 

Mother’s Day is behind us and Father’s Day is ahead. It seems like a good time to consider the challenges and responsibilities of parenting. 

National Public Radio’s Science Desk introduced a new series called, ‘How To Raise A Human.’ They kicked off the show by asking bloggers, “What's the one thing you wish someone had told you before you became a parent?” Here are a few of the answers:

“I wish someone told me that there are going to be moments where you're playing chess with speed metal music in your ears. You're trying to make intricate choices but there's so much chaos.”
--Alan Lawrence, That Dad Blog

“I wish someone had told me to block out the outside voices that come when you become a parent – and pay more attention to the children and what their needs are.”
--Saira Siddiqui, Confessions of a Muslim Mom 

“I wish someone had told me that even though your life changes when you become a parent, you still get to create the path you want.”
--Drea Duclos, OhDearDrea 

“Parents always told me to brace myself for the teen years, because that's when they'll hate you, be disrespectful to you, be sassy, talk back to you, be rude, be generally awful people. But I wish that someone had told me that's completely wrong.”
--Karen Walrond, Chookooloonks 

One of the many challenges parents face is helping their children understand financial issues. If you would like some ideas about how to talk with your children about money, contact your financial professional.

Weekly Focus – Think About It 

“I’m relieved I don’t work at SNL [right now]…The level of outrage is so high. It feels like talking to anyone, anywhere in 2018 is just landmine hopscotch.”
 --Tina Fey, American actress, comedian, writer, and producer