Market News – Week of August 7, 2017

SOLID LABOR REPORT:

In July, the U.S. economy added 209,000 more jobs and the unemployment rate moved to 4.3% from 4.4%.  That is the lowest unemployment rate since March 2001.  The Labor Force Participation rate edged up to 62.9% from 62.8%.

SLOW STEADY INCREASES:

Strong corporate earnings reports and a good July U.S. jobs report kept stock prices rising, albeit at a slow and steady pace.  The Dow Jones Industrial Average his the 22,000 mark for the first time this past week.  The S&P 500 has now gone 12 straight trading days without a daily move of 0.3% or more in either direction. It is the longest such streak ever for that index.  For the week, the S&P 500* increased 0.19% (up 10.63% for the year).  The MSCI All Country X US* increased 0.83% (up 17.86% for the year).  The Barclays Global Aggregate Bond Index* increased by 0.76% (up 6.78% for the year).  The HFRX Global Hedge Fund Index* decreased 0.10% (up 3.38% for the year).

401k ACCOUNTS FLYING HIGH:

The average 401k account balance now stands at $97,700, a 9.6% increase from the $89,100 average of a year ago.  For those who have IRAs, the average total in IRA assets held by individuals rose to $100,200 from $89,600 one year ago.  Many of these accounts have risen a good deal due to the run up in stock prices, especially U.S. stock prices.  One result of this is Baby Boomers now having a higher percentage of their retirement accounts in stocks than perhaps they should.  Investors should review their 401k percentage allocation to the stock market and ask if that is the appropriate allocation given their season in life and years left until retirement, among other factors.

STUDENT LOAN DEBT CLIMBS:

44 million borrowers in this country owe $1.3 trillion in student loan debt, higher than both car loan debt and credit card debt.  One of the results of this burgeoning debt is that the number of people living at home well into their twenties keeps reaching new records each year.  Another result is a higher burden on parents.  The 60-69-year-old age group has experienced an 89.6% increase in student loan debt.  By far, though, the age group carrying the largest amount of this debt (over $400 billion) are the 30 somethings.

References:

SOLID LABOR REPORT: http://www.calculatedriskblog.com/2017/08/july-employment-report-209000-jobs-43.html; https://www.cnbc.com/2017/08/04/us-nonfarm-payrolls-july-2017.html
401k ACCOUNTS FLYING HIGH: https://www.bloomberg.com/news/articles/2017-08-03/americans-keep-crushing-it-with-their-401-k-s
STUDENT LOAN DEBT CLIMBS: https://www.linkedin.com/pulse/student-debt-crisis-real-colleges-take-note-jeff-spear?trk=v-feed&lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BIezE80ImzX5cgZ4G4jod%2FQ%3D%3D;
SLOW STEADY INCREASES:  https://www.wsj.com/articles/stock-markets-look-to-u-s-jobs-report-for-direction-1501815872