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Last week was another strong one for equities, as the S&P 500 gained 2.1 percent. It was the fourth straight weekly gain, during which time it has risen 7.2 percent. It ended the week 16.9 percent higher for the year to date. The resilience of this rally has been something to behold. There have only been four weeks all year in which the S&P 500 fell, with an average decline of less than 1 percent. And there have been only six down weeks in the six months since this rally began last November, and the average decline is still below 1 percent. For the month of May at the sector level, financials, industrials, consumer discretionary and technology stocks are beating the market, in anticipation of improving economic activity in the months ahead, and providing some optimism that this rally can be extended with cyclical groups which have mostly trailed.
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Minneapolis – (May 14, 2013) – Countless studies have shown that many Baby Boomers don’t believe they have enough savings to live comfortably in retirement, but why are so many financially unprepared? Data from the Retirement DerailersSM survey, released today by Ameriprise Financial (NYSE: AMP), helps answer the questions many have about the retirement crisis in America.
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Stocks rose last week for the third straight week, during which the S&P 500 added 5.0 percent, to bring its return on the year to 14.5 percent. Notably, however, the leadership has recently shifted to more economically-sensitive sectors. So far in the month of May, industrial stocks have produced the best returns at 4.0 percent, whereas they lag behind for the year to-date, with a return of 13.5 percent. Consumer discretionary ranks second for the month, as it has for the year so far. But, in third place is the information technology group, with a return of 3.0 percent, despite rising just 8.2 percent for the year so far, ahead of only the materials sector. Even materials have beaten the broader index this month. Conversely, the dividend darling defensive groups of utilities and telecom are actually lower for the month so far. And barely positive are consumer staples and healthcare, both among the leaders on the year. The primary exception to this more cyclical rotation has been energy, which although positive for the month, has not exhibited the same degree of buoyancy.
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Last week’s better-than-expected employment report for the month of April put an abrupt halt to the negative sentiment regarding the pace of economic activity. Stocks surged more than 1.0 percent on Friday after the report showed a rebound in hiring from March, as well as significant upward revisions to the prior two months. While it contained some concerns, especially the decline in the length of the workweek, the jobs report was one of only a few recent economic reports that exceeded expectations. And, it was enough to suggest that the economy was not sliding into a serious second-quarter slump. Spending cuts from the sequester, combined with higher taxes, are creating headwinds for the economy, to be sure. And second quarter growth estimates are in the range of +/- 1.5 percent, a deceleration from the 2.5 percent pace of the first quarter. And many businesses have offered tempered guidance for the months immediately ahead in their first-quarter earnings reports. But the labor market report, in combination with an improving housing sector and still expanding manufacturing base should be enough to keep the economy expanding at a moderate pace.
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This morning’s Employment Report for the month of April was particularly good news. Job growth for the month was well ahead of expectations and payroll expansion for the prior two months was shown to have been much stronger than originally reported. Job growth numbers for February and March were revised higher by a combined 114,000. In fact, the 332,000 net new jobs now reported for February (revised from a previously reported +268,000) was the best month of job creation for the American economy since November 2005 (excluding the temporary influence of Census related hiring in 2010).
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Wednesday’s report on March new orders for durable goods (manufactured goods intended to last 3-years or more) is further evidence that the pace of economic activity has decelerated. New order trends also suggest that manufacturing activity is unlikely to improve much over the near-term, but neither do we expect the sector to see an outright contraction.
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Last week stocks suffered through their worst weekly performance since November, as the S&P 500 fell 2.1 percent, trimming its return on the year to 9.0 percent. After reaching a new high of 1593 on April 11, the S&P pulled back through last Thursday, and in the process closed below its 50 day moving average. But stocks did rebound last Friday, limiting the damage, and were higher well into afternoon trading on Monday as well. The extent of the pullback between April 11-18 was just 3.2 percent, and in terms of magnitude is reminiscent of the pullback between February 18-25 , when stocks fell 2.8 percent in response to an apparent misinterpretation of the Fed’s Open Market Committee meeting minutes.
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Over the last fifteen years, I’ve watched my father – a retired military service member – persevere to maintain his own physical and financial independence after suffering his third heart attack last year and undergoing cardiac bypass surgery almost 17 years ago.It has been very important to him to avoid being a physical, financial or emotional burden to his family, and I believe many retirees share that goal.Economic uncertainty, political gridlock and potential entitlement reform has caused many Americans to wonder if they’ve saved enough for retirement. Adding to their concerns is the threat of an unexpected or long-term medical expense in retirement derailing their financial stability and retirement lifestyle. If you’re feeling anxious about medical expenses in retirement, consider the following three ways to help prepare for and protect yourself against these risks.
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It was an extraordinary quarter for U.S. equity markets, one characterized by record highs, participation by all major sector categories, and a shift to positive flows among mutual funds. The S&P 500 delivered a 10 percent return, with six of its ten sectors delivering double digit returns, led by healthcare with a gain of 15.2 percent. The fact that the fiscal cliff was averted, the economy appeared to gain some momentum, and the Fed renewed its commitment to policy accommodation all contributed to the gains. And, I would argue, the fact that the sequester was triggered, rather than in spite of it, also made a positive contribution.
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