Market News – September 17, 2018

U.S. INDUSTRIAL PRODUCTION IS HEALTHY: For the third consecutive month, industrial production in the U.S. rose, this time by 0.4%. Manufacturing output increased by 0.2% largely due to a big increase in the production of motor vehicle parts. Industrial output in August was 4.9% higher than August of a year ago.

…AS ARE RETAIL SALES: Retail sales increased 0.1% last month. Sales were up 6.6% from August of a year ago.

INFLATION PAUSING: The core Consumer Price Index rose 0.1% in August and the annual pace of inflation slowed to 2.2%.

GENERALLY POSITIVE: Overall world trade news leaned positive this past week. Tech companies that had been taking a beating bounced back. That and some generally positive news regarding the U.S. economy got stocks advancing this past week. The S&P 500 has gone without a 1% decline since June 25.

RAISING RATES: In Turkey, against the president’s wishes, the Turkish Central Bank raised rates by 6.25% up to 24%! The bank felt something had to be done to curb the sell-off of the Turkish lira which had been affecting emerging markets generally. The value of the lira jumped on the news.

CREDIT FREEZE: Beginning September 21, a new federal law will require the big three credit reporting agencies (Equifax, Experian and TransUnion) to offer you a credit freeze free of charge. Such a freeze will restrict access to your credit file. Parents will also be able to get a credit freeze for their children under 16. A credit freeze does not prevent you from using your credit cards. It does stop most businesses (and others) from reviewing your credit file. If you sign up for a voluntary credit freeze, you will get a PIN to use when you want to unfreeze that credit file if you want to apply for new credit. Under the new law, if you request a freeze, the freeze must begin by the next business day. If you want to lift the freeze, that request must be honored within an hour.

DEBT ISSUES NEED ACTION: According to Moody’s Investors Service, public pensions in the U.S. are currently underfunded by about $4.4 trillion, or the equivalent to the economy of Germany. If you are banking on a publicly funded pension, can you rely on it? What will this mean for taxpayers who will be tapped to fund the shortfall?

Meanwhile, the U.S. federal deficit is projected to reach $985 billion in fiscal 2019, a very positive economic year. Revenues to the U.S. government are actually up, despite the tax cut, by about 1%. Spending increased by about 7%.

CREDIT FREEZE: https://amp.freep.com/amp/1156255002
U.S. INDUSTRIAL PRODUCTION IS HEALTHY: https://www.calculatedriskblog.com/2018/09/industrial-production-increased-04-in.html
…AS ARE RETAIL SALES: https://www.calculatedriskblog.com/2018/09/retail-sales-increased-01-in-august.html