Millennial Moves…

7-7 Market Highlights (April 28 – May 04, 2019)

Unemployment in the USA is the lowest in half century and the millennials are on the move to perpetuate future economic growth. And, Madison, Wisconsin is the new mecca for the millennials as the small-town USA promises the job, more and meaningful career opportunities with affordable housing and lower living costs. Growth is supported by tech sector likes of Foxconn and university. Other small-town USA where millennials moving into and staying are: Oklahoma City, Grand Rapids, Omaha, Durham, El Passo, Salt Lake City…  

Venezuela crisis is intensifying. Meanwhile, people are thrusted into inhumane and unimaginable suffering. They have no food, no security, and many millions are fleeing and abandoning homeland for safety and food to neighboring countries.  Human suffering, too, will continue in the Middle East as the sectarian war unrelenting and Trump is choking off Iranian oil supply where China, India, Japan, South Korea… may suffer the sanction's wreath. 

Market closed early on Friday, 5/03/2019 @:  DOW: 26,505.00;   S&P 500: 2,945.64; NASDAQ: 8,164;  Gold: $1,279.60; Oil: $61.85; US 10-Year: 2.527% 

Here are the highlights of the 18th week of 2019:   

 1.   Millennial Moves.   Millennials are pouring into smaller cities and buying homes cities like Madison, Wisconsin where they can afford to buy. Madison, Wisconsin, is a new mecca for millennials, according to a recent study from the National Association of Realtors, which ranked the top millennial housing markets based on both their high share of current young residents and of millennials moving in. Three out of 4 recent transplants to Madison were millennials and they have mostly stayed in the area. The growth is partly due to a burgeoning tech sector as well as the growing popularity of the University of Wisconsin with out-of-state students. Also, Google recently announced it was expanding its Madison offices. Also, Foxconn’s plans in Wisconsin have been in question following little visible progress and reports of fluctuating plans for a $10 billion plant. Other metro areas that are seeing millennials multiply: Oklahoma City, Grand Rapids, Michigan, Omaha, Nebraska, Durham, North Carolina, El Paso, Texas, and Salt Lake City, Utah. Even some pricey markets like Seattle and Denver are getting an influx. While a large share of millennials initially moves into major metropolitan markets, like New York City, San Francisco and Boston, they don’t tend to stay and buy homes. Housing: in the Madison area right now the median price range around $265,000, according to Ziegler. 

2.   Young Millionaire Rules.   According to an investor who became a millionaire at 26: ‘To make a lot of money, master these 10 rules.’ First impressions are important, whether you like it or not. It doesn’t matter what job you have — a first impression happens in less than a second, and it’s the biggest influencer in how people respond to you: Be confident with good style… In a recent study, researchers observed 1,000 people during three-minute speed-dating sessions. The results showed that people formed their opinions in a fraction of a second. It didn’t matter what evidence was presented to undermine their opinions. In the end, appearance trumped facts. Essentially, if you want to grow your business and make a lot of money, master these 10 rules for making a positive first impression. Look at these rules: 1) No narcissism, ever, 2) Listen like your life depends on it. 3) Kill the foolish jargon. 4). Catch their draft and make them feel comfortable talking to you. 5) Dress the part. 6) Act the part. 7) Compliment a bit. 8) Make eye contact. 9. Rock through it with positive Energy and attitude. 10) Know your role. Don’t speak out of turn. Don’t shame. Don’t run your mouth. People can be weird but let them be and look for deeper points of connection. 

3.   Jobs Are At…         Job gains in the services sectors continued to rocket higher in April as hiring remained hot for computer system designers, social workers and health-care professionals. Manufacturing, on the other hand, posted a third straight month of lackluster employment figures.  The government said the U.S. economy added 263,000 jobs last month, more than the 190,000-increase expected by economists polled by Refinitiv. The business and professional services sector alone added 76,000 jobs, with strong hiring in computer systems design, temporary help services, and building and dwelling services like pest extermination, landscaping and housekeeping. The health care and education sector with a gain of 62,000 jobs. The manufacturing industry added just 4,000. “Total nonfarm payroll employment increased by 263,000 in April, compared with an average monthly gain of 213,000 over the prior 12 months,” the Labor Department. Leisure and hospitality had a healthy net job gain of 34,000.  While the retail trade employment shed 12,000 jobs following a loss of 15,000 jobs in March.

4.   FOMC:  Fed Funds Rate Unchanged at 2.25% - 2.5%.     The Federal Open Market Committee and the Chair Jerome Powell announced that it kept the benchmark interest rate unchanged at the target range of 2.25% - 2.5% in a widely expected. Sustained expansion of economic activity, strong labor market and inflation near target are the most likely outcomes. Economic activity rising at a solid rate. Market-based measures of inflation compensation have moved lower but survey-based measures of inflation expectations are little changed. Inflation, “transitory” and expected at 2% rate. Manufacturing is weak all around the world, but the USA outlook is a positive and healthy one. FOMA aims to work toward economic expansion and job creation… Now, the US unemployment drops to 49 years low. And, the solid economic fundamentals may be leading to his aim… And, there would be no rate cut anytime soon.

5.    Retirement Planning for 50-Something.        It’s coming. Your retirement years are ahead of you. Yes, it’ll come. Proper retirement planning is important at every age, but especially in your 50s. Here are four things that every 50-something should know about preparing for impending retirement. Do following if you want to retire well: 1) You can make catch-up contributions, up to $19,000 to a 401(k) and $6,000 to an IRA in 2019. But adults 50 and over are allowed an additional $5,000 to a 401(k) and $1,000 to an IRA, bringing their contribution limits to $25,000 and $7,000, respectively. 2) Be aware that you'll pay a penalty for early withdrawals. 3) Plan for Health care that might cost more than you think. 4) And, plan carefully when you start taking Social Security matters. Example: Adults with a full retirement age of 67 who begin claiming benefits at 62 will only receive 70% of their scheduled benefit amount per check; those with a full retirement age of 66 will only receive 75% of their scheduled benefit per check if they start at 62. SSA maxes out at age is 70, when you become eligible for 124% of your scheduled benefit if your full retirement age is 67, or 132% if your full retirement age is 66.

6.   Venezuela Crisis.  Venezuela, once one of Latin America’s most prosperous countries, has reached the point in an economic and political crisis. Mr. Maduro assumed the presidency after the death of his mentor, Hugo Chávez, in 2013, has overseen a drastic unraveling of Venezuela’s economy, and blames the US sanctions imposed. But others have attributed Venezuela’s economic demise to mismanagement and corruptions. In May 2018, Mr. Maduro won re-election, rigged with coercion and fraudulent voting, a new six-year term in the midst of a financial and humanitarian crisis. Many countries did not recognize Maduro as legitimate, including the United States, Canada and a dozen Latin American nations. Consumer prices have skyrocketed, and the IMF expects the inflation rate to reach 10,000,000% in 2019, possibly one of the worst cases of hyperinflation in modern history. Violence and hunger are widespread, and 80% of Venezuelans households have insufficient food. The 3 million migrants have left Venezuela since 2014, setting off a regional crisis impacting neighboring countries. President Trump quickly recognized Mr. Guaido as the country’s leader in January and about 50 country heads. And, Trump has not ruled out the use of military force in Venezuela, setting up a potential conflict with Russia, which backs Mr. Maduro.  

7.   Choking Off Iran Energy Exports.           The US launches plan to choke off Iran’s energy exports, casting uncertainty over oil prices. The Trump administration on Thursday stopped issuing waivers that allow several countries to buy Iranian crude. Washington had issued the waivers to prevent global supplies from suddenly dropping and oil prices from spiking. It remains to be seen whether Saudi Arabia and OPEC will fill the gap. The United States seeking to cut the Islamic Republic’s exports to zero and ushering in a new era of uncertainty for the oil market. The sudden move to cut off Iran’s exports threatens to wipe out much of the shipments, which have recently totaled more than 1 million barrels per day, or roughly 1% of global consumption. To fill that gap and prevent fuel costs from spiking, Trump has turned to his allies in Saudi Arabia, the top oil exporter. Key Iran oil buyers are: China, India, South Korea, Turkey, Japan, Italy, Greece, UAE, Spain… Oil prices jumped to six months high after Trump announcement, with international benchmark Brent crude to $75.60 and U.S. crude rising to $66.60. Tight oil market creates risk. But some analysts said the tighter sanctions alone will not cause a supply shock, but they make the oil market more vulnerable to a shortage that sends fuel costs higher.

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

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

~ S. Vincent Shin

   www.dhirubhai.net/in/vshin

References and Image credits to Bloomberg News, Getty image, AP Photo, Reuters, CNBC..., and special thanks to Image & Visual Consultant @U.Y.  All references, news, and images are from open source and public domain.