Fully Employed ?

7-7   Market Highlights, (June 11 – June 17, 2017)

Do you feel fully employed? Well, according to government data, 4.3% unemployment rate, America is fully employed. So, are you bringing home living wages to invest for your retirement and make payments on your American Dream home, car, children's education, and healthcare? Can you afford a house? In reality, gaps between the housing "haves and have-nots" widened leaving many hardworking Americans out of ever getting into that American Dream home. Hmmmm... So what really "Fully Employed" means to you?

Perhaps you may consider moving to Washington, Colorado, New Hampshire, South Dakota, New Jersey... for best possible paying job as these states according to recent report show much promises. And, regardless of your current financial condition, it may be critical for you to think and prepare for that inevitable retirement. Or, plan to work many more years beyond retirement age. Hope your plan will lead you to a good retirement. Best wishes.

Trump Healthcare bill is about to be voted for possible replacement of Obamacare. One hundred percent opposition by Democrat, and tantalizing few Republican Gran-standers pose challenges for the future of American people's healthcare. Can Americans pay for medical wants, needs of all working, not working, with perfect satisfaction? Who is going to pay for it? What say ye?

Oil price is heading back to $30's according the industry analysts and warn staying away from it. What economic impact? But, Singapore, Hong Kong, and China are bubbling up to become wealthiest region. And Chinese A share stocks may be getting $17 billion inflow shortly as MSCI decided to add 5% of the floating market cap for 222 China A shares and that will eventually give mainland China a weight of 0.73% in the emerging markets index. Invest in Asia, China? You decide for yourself.

Note. What is 'Full Employment'? Full employment is an economic situation in which all available labor resources are being used in the most efficient way possible. Full employment embodies the highest amount of skilled and unskilled labor that can be employed within an economy at any given time. Any remaining unemployment is considered to be frictional, structural or voluntary.

Market closed on 6/23/2017 @: 

DOW: 21,394.76; S&P: 2,438.30; NASDAQ: 6,285.25;  Gold: $1,256.90; Oil: $43.10

Here are the highlights of the 25th week of 2017: 

1.  Jobs Market, Full Employment.       Numbers can be misleading as many people are still struggling to meet the financial obligations yet employment statistic purports full employment. Here's what that means. The current unemployment rate of 4.3% indicates the economy has exceeded "full employment." The rate is important to the Fed and likely to give the central bank impetus to continue.  On its face, it seems like an oxymoron that only an economist could love: The job market has actually exceeded the level of "full employment," which sounds like there are more people working than there are jobs. "The job market is now slightly beyond full employment and any further job overshoot is likely to drive steady monetary policy tightening, in our view," some say. Normally such tight labor conditions would be pushing wages higher and cause inflation. However, the current climate is showing few signs that the low jobless rate is working its way into employee paychecks. The Bureau of Labor Statistics reported that average hourly earnings increased just 2.5% annualized in May. The Atlanta Fed's wage tracker shows gains for median wage growth of 3.4%, but that number actually has been falling. The long-run sustainable unemployment rate is 4.5%, still above the current rate. However, uncertainty in that forecast is "large."  So, do you feel you are fully employed? 

2.  Best States for Job.        So, where is the best state for job in America?  Personal finance site WalletHub ranked all 50 U.S. states to determine the most attractive states for employment. The ranking took two major factors into consideration: the job market (60%) and the economic environment (40%). The job market ranking encompasses factors such as the number of job openings, employment growth rate and employment outlook in an area, while the economic environment ranking includes factors such median annual income and average commute time. If you're looking for a new opportunity but aren't sure where to start, check out these 15 best states for finding a job. Here they are: 1) Washington, 2) Colorado, 3) New Hampshire, 4) South Dakota, 5) New Jersey, 6) Minnesota, 7) Massachusetts, 8) California, 9) Tennessee, 10) Florida, and next five states are: 11) Texas, 12) Vermont, 13) Utah, 14) Connecticut, 15) Kansas. Best wishes to all for getting your dream job that will pay you good living wages.

3.  Divide Widens Between Housing 'Haves and Have-Nots.'  The median price of an existing home sold in May set a record high, but it's not the price itself that is so stunning. The National Association of Realtors reported the median price of an existing home is $252,800, a 5.8% increase from the price reported in May 2016. That means half the homes sold in May were priced higher, and half were priced lower. Other measures of home prices use so-called repeat sales figures, meaning they are looking at the year-to-year gains that the same or similar houses would see. Sales of existing homes priced below $100,000 dropped 7% year over year, and sales of homes priced between $100,000 and $250,000 rose just 2%, according to the NAR. On the other side, sales of homes priced over $500,000 jumped more than 20% and sales of million-dollar homes surged nearly 30%. There are very few low-priced homes for sale, and far more expensive homes for sale. Homebuilders may claim they are increasingly targeting that first-time buyer, but their price points even for entry-level homes are still mostly above $200,000. It is difficult for first-time, mortgage-dependent buyers to compete. Employed, but still cannot afford to get into American Dream…

4.  Tips for Retiring.         You had jobs. You worked hard… Many dream of finally retiring and taking life easy. But do you have your finance in order for worry-free retirement? One of the most important and difficult financial decisions most people will make is when to retire. Many people often underestimate the financial planning for retirement. Perhaps following few steps may help you effectively enjoy the wealth you have accumulated and achieve the stress-free retirement that you've always imagined. Analyze: 1) Calculate monthly income and create a budget.  It is crucial to have an income that aligns with your desired lifestyle. 2) Wait to claim Social Security.   You should wait as long as possible to claim it rather than doing so as soon as you're technically able (at age 62), as benefit will increase 8% each year you delay until age 70. 3) Estate planning.  Review all your estate planning documents periodically with your children and other relevant family members so that your wishes are communicated. 4) Pass on your financial knowledge to your family. Discuss key principles such as starting an emergency fund, contributing to a retirement plan and paying off debts quickly as encouragement for building their own successful financial future. And, 5) Enjoy yourself.    Now is the time to, if you desire, spend time with family and friends, pursue a passion project, volunteer with an organization you care about or travel the world. Retirement is your reward for lifetime of hard work. Enjoy.

5.    Details of Senate Republican Obamacare Replacement Bill.           You are employed and working hard. But can you afford medical care now? Many are very angry about spiraling insurance cost and inability to get affordable and accessible medical care for hard working Americans. Obamacare is financially impossible for many people and firms providing care. And, Trump is still driving his campaign promise to replace the almost untenable Obamacare. What’s happening? The bill would significantly change how the federal government subsidizes individual health plans and funds Medicaid. GOP leaders want to have a vote on the bill before the Fourth of July recess. The House's own version of a health-care bill is deeply unpopular. Senate GOP leaders on Thursday finally released their bill, which would repeal Obamacare taxes, restructure subsidies to insurance customers, and both phase out Medicaid's expansion program and cap Medicaid spending. Republicans plan to bring the controversial bill to a quick vote next week, but face 100% opposition from Democrats and few critically important Republican grand-standers.  Now, Senator Dean Heller of Nevada becomes the fifth Republican senator to oppose the current GOP healthcare bill. The bill, if passed into law, would sharply reduce financial aid that currently helps millions of people obtain health coverage, while at the same time offering a tax break to primarily wealthy Americans. And it would loosen rules in a way that could lead to states allowing insurers to offer less-generous health plans. The bill would repeal, retroactive to the beginning of 2016, the Obamacare rule requiring most Americans to have some form of health coverage or pay a tax penalty fine. It will be a tantalizing weekend for lawmakers and for President.     

6.  $30 Oil on the Horizon? Crude has tanked over 20% year to date, and is on pace for its worst week of 2017.  Modest comeback did little to change the mind of one portfolio manager who is urging investors to avoid crude and energy stocks. Chad Morganlander, portfolio manager at Washington Crossing Advisors, warned against oil on Thursday saying the fundamentals were looking weaker for the commodity over time. "Our expectation is for lower lows in oil over the course of the next 18 to 24 months," he said. The technological changes in the shale industry and the rise of solar energy as a source pose concern for crude. Given that he also sees these industry changes accelerating, oil could fall to lows unseen since 2016. On Friday, it continued its slight rise from Thursday, with U.S. benchmark West Texas Intermediate crude trading at $42.82. "I wouldn't be surprised to see oil prices go down to the mid-$30s over the course of the next 12 months, so I would be avoiding this entire sector altogether," he said. It may be a very wise move now to analyze your investment position on oil. It’s always better to be safe.

7. $17 Billion or More May Flow Into Chinese Stocks.     Asia wealth growing, and China is strategizing for supporting growth... Should you consider China stocks for your future wealth? Well, MSCI announced decision in favor of stocks, known as A shares, to the firm's emerging markets index, which is tracked by an estimated $1.6 trillion. As a result, non-Chinese investors that follow the MSCI Emerging Markets Index must buy Chinese A shares to match the updated version of the index.  Due to limited access to the mainland Chinese stocks, foreign investors own less than 1.5% of that market, head of research for Asia Pacific at MSCI, said on a conference call. Estimated $17 billion to $18 billion could flow into Chinese A shares.  MSCI's decision to add 5% of the floating market cap for 222 China A shares will eventually give mainland China a weight of 0.73% in the emerging markets index. And, if China improves the ability of foreigners to access its markets, mid-cap mainland Chinese stocks could also be added to the emerging markets index. In that case, mainland China would have a 1.4% weighting in the index overall, and he estimated inflows could roughly double to $30 billion to $35 billion. Is this good momentum shifting good for your portfolio? You decide. 

Again, these are my researched and analytical thoughts on the highlights of the week. Perhaps  you should take a closer look at them, do additional research and analysis, if these are interest to you. This “7–7 Market Highlights” is presented for your general knowledge, resource for management, and perhaps as a tool for career development, and building wealth. As always you decide with your own final analysis and position. 

Mahalo. I welcome your thoughtful comments, “like” notes, and share.

~ S. Vincent Shin

  www.dhirubhai.net/in/vshin

Image credits to:  vShin, Bloomberg News, Getty image, AP Photo, Reuters, CNBC, and special thanks to Image & Visual Consultant @U.Y.