July 17, 2019

Good morning!

It was an “old movie” that long-time stock investors have seen before: the chair of the nation’s central bank calmed the fears of skittish investors and all but guaranteed that a rate cut would occur in the coming weeks, causing stocks to surge.  Alan Greenspan, Fed Chair from 1987-2006, did it so often it became known as the “Greenspan Put,” i.e., whenever a financial crisis arose, the Fed would come to the rescue by lowering interest rates.  Current Fed Chair Jerome Powell oversees an economy with a historically low jobless rate, low inflation and a stock market already at record levels, but he is still concerned that global speed bumps may eventually work their way into our economy – thus the need now for a rate cut in the near term (source: BTN Research).                     

Stock investors celebrated Chairman Powell’s comments to Congress last week by pushing the S&P 500 above 3,000 for the first time ever.  The stock index closed at 3014 on Friday (7/12/19), its 10th record close this year and 217th in the ongoing 124-month bull run that has produced a gain of +453% since March 2009, equal to an annualized return +18.0% per year.  Rumor has it that bulls don’t last forever, but that fact has been lost for now on this streak of more than 10 years (source: BTN Research).

OPEC, once the king of global oil production, has seen its status diminish with the boom of American shale oil.  The 15-nation cartel was the source of just 29.8% of the world’s daily production of oil as of July 2019, its lowest total by percentage in almost 29 years, i.e., since September 1990.  OPEC generated 39.5% of the world’s oil in April 1998 (source: International Energy Agency).

Notable Numbers for the Week:

1.     WHERE DID THEY GO? - The number of publicly listed companies, i.e., companies traded on an exchange, has dropped from a peak of 8,090 in 1996 to just 4,336 today (source: theglobaleconomy.com). 

2.     WANT A PENSION? - 83% of full-time state and local government employees were participants in a defined benefit pension plan in 2018.  Just 16% of full-time workers in the private sector were participants in a defined benefit pension plan in 2018 (source: Urban Institute).   

3.     RICHEST - The top 1% of wage earners in the US reported at least $480,804 of pre-tax income in 2016 and own an estimated 29% of the total wealth in the country (source: Survey of Consumer Finances). 

4.     GRAY HAIR OR NO HAIR - An estimated 56 million Americans will be at least 65 years old by the year 2020, i.e., 1 out of every 6 Americans.  An estimated 73 million Americans will be at least 65 years old by the year 2030, i.e., 1 out of every 5 Americans (source: Census Bureau).      

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