Jobs Report Gives Fed Green Light for December Rate Hike
Caseslattery - DECEMBER 7, 2015
In This Issue
Markets shrugged off a volatile week Friday to close positive, buoyed by a strong jobs report and an easing of uncertainty around the Federal Reserve's next interest rate decision. For the week, the S&P 500 grew 0.08%, the Dow gained 0.28%, and the NASDAQ added 0.29%.[1]
Stocks surged late last week after a strong November jobs report gave investors renewed confidence in the economy. Data shows that the economy gained 211,000 jobs in November, beating the forecast of 200,000. More importantly, the October report was revised upward, giving us back-to-back months of strong labor market growth.[2] The unemployment rate remained flat at 5.0%, while wages increased by 2.3% from a year ago.[3] Digging deeper into the data, we see that jobs were created in multiple sectors of the economy, supporting broad-based growth.[4] The upbeat report may give the Fed what it needs to go ahead with interest rate increases in the coming months.

Fed chair Janet Yellen also signaled her readiness to raise interest rates in speeches last week. She told Congress that gradual rate hikes are likely to begin in December as long as there are no major shocks that might undermine confidence in the economy. She also warned that waiting too long to raise rates might force the Fed into tightening monetary policy quickly to avoid overheating the economy.[5]

However, the news overseas is not so rosy. Markets slid on Thursday when investors here and abroad reacted badly to the European Central Bank's new stimulus plans. Investors felt that the ECB's plans were too little, too late, and they responded by selling.[6] In China, economic sentiment remains cautious as additional data shows that demand is still weakening and further risks to growth exist.[7]

Bottom line: The jobs report and other domestic data may give the Fed the boost it needs to raise interest rates at the mid-December Open Market Committee meeting. Weighing on the other side are ongoing concerns about global growth; however, as long as nothing major happens between now and the December meeting, the odds seem to favor an interest rate increase.

Looking at the week ahead, investors will be poring over November retail sales data, consumer sentiment, and inflation reports ahead of the Fed's meeting on the 15th and 16th. Positive news would likely fuel additional speculation about a December rate hike.[8]

Right now, markets appear to have a somewhat unhealthy codependence on central banks. As decoupling between the U.S. and the rest of the world continues, we can expect a seesaw of emotions to drive additional volatility. At the moment, a solid jobs report is being viewed favorably by investors because it takes away some of the uncertainty around interest rate hikes. However, sentiment could sour quickly when some other headline changes the odds. On top of the standard end-of-year shuffling of portfolios, we're expecting the next couple of weeks to be volatile.


ECONOMIC CALENDAR: 
Tuesday: JOLTS
Wednesday: EIA Petroleum Status Report
Thursday: Jobless Claims, Import and Export Prices. Treasury Budget
Friday: PPI-FD, Retail Sales, Business Inventories, Consumer Sentiment




Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

HEADLINES:

Holiday deal-making drives auto sales. Black Friday and early holiday shopping propelled November motor vehicle sales to the biggest month in 14 years.[9]

Beige book shows economic activity expanding. A Federal Reserve report of anecdotal business activity shows that the economy expanded moderately between October and November.[10]

OPEC votes to maintain production. Even as rig counts are falling under the weight of cheap oil, the important Organization of the Petroleum Exporting Countries (OPEC) organization voted to keep producing high volumes of oil to maintain market share.[11]

Manufacturing report suggests gloom. A measure of manufacturing activity in the key Chicago area shows that a strong dollar, slowing global growth, and other factors may foretell weakness in the manufacturing sector.[12]

"Do not hold the delusion that your advancement is accomplished by crushing others." 
 - Cicero

Slow Cooker Pot Roast
Come home to a classic pot roast using your slow cooker.

Serves 6

Ingredients:

1/4 cup tomato paste

1 tablespoon Worcestershire sauce

1 pound baby carrots

1 pound baby potatoes (about 15)

1 medium onion, cut into 1/2-inch wedges (leave the root intact at the end)

2 stalks celery, washed and cut into 1-inch pieces

2 bay leaves

1 3-pound beef chuck roast, fat trimmed from the ends

Kosher salt and black pepper


Directions:
  1. Turn your slow cooker on high. Add the tomato paste and Worcestershire sauce and whisk in one cup of water. Add the vegetables and stir them to coat in the sauce. Lay the roast on top and sprinkle with a pinch of pepper and a pinch of salt.
  2. Cover and cook on high for 4-6 hours or on low for 7-8 hours. If you prefer your meat to be shreddable, cook for longer. Let the meat rest for 10 minutes before slicing across the grain to serve. Taste the meat and sauce for seasoning and add more salt or pepper as needed. Serve the sliced roast on top of the vegetables, topped with sauce.

Recipe adapted from Sarah Copeland | RealSimple.com[13]

 

 


 

 

Year-End Reminders from the IRS

As we get close to the end of the year, the IRS has a few reminders to help you avoid mistakes:
  • Avoid excess contributions. If you contribute more than the 2015 limit to your individual retirement accounts, you will be subject to a 6% tax on the excess amount for each year that the excess remains in your account. You can withdraw any excess (without penalty) by the due date of your 2015 tax return.
  • Take your required distribution. If you are at least age 70-1/2, you must take a required minimum distribution (RMD) from your Traditional IRA, normally by December 31 each year. However, if you turned 70-1/2 in 2015, you have until April 1, 2016. You face a 50% excise tax on the RMD amounts you fail to take.
For more information on excess contributions, RMDs, and other year-end tax issues, please contact a qualified tax expert.

Tip courtesy of IRS.gov[14]
Train Your Grip with Toothpaste

Keeping consistent, light pressure on the club is something that many amateurs struggle with. You want the pressure in your hand to stay constant all the way through the swing. One way to keep yourself from holding the club in a death grip is to do the toothpaste check. Grip a tube of toothpaste the way you would normally grip the club. Set up for a shot and swing. If you squirt out just a tiny amount from the tube, your grip is on target. If you make a mess with the toothpaste, your grip is too strong.

Another mistake many golfers make is to lose contact with the left palm during the backswing, causing them to lose control. Keep consistent contact with the fingers of your right hand to avoid losing your grip.

Tip courtesy of Randy Chang | Golf Tips Mag[15]
Ask Your Doctor About Videoconferencing Technology

If you live far away from a physician or specialist, getting to every appointment can become a chore or make it less likely that you'll seek care. If your appointment doesn't require a physical examination, it may be possible to have it done through a videoconferencing system. Ask your physician about whether they have plans to leverage technology to help patients keep in contact more efficiently.

Tip courtesy of AARP[16]
Make Some Green Resolutions

If you're interested in making your lifestyle greener and more sustainable, try committing to a few changes at a time. Focus on keeping your green resolutions and making consistent progress rather than overhauling your entire lifestyle. Here are a few simple changes to incorporate in your lifestyle:
  • Eat more local and organic foods. Start shifting your diet to more sustainable foods by shopping locally, subscribing to a Community Supported Agriculture (CSA) program during the growing season, and eating more seasonally-appropriate foods.
  • Audit your electricity usage. To lower your household's carbon footprint, take a look at how you use energy. Can you raise or lower the thermostat a few degrees each season to lower the bill? Can you switch to cold-water washes?
  • Make a "green strategy" for your house. Make a wish list of efficient appliances, home modifications, and other costly changes that you'd like to have. Incorporating them into your maintenance and purchase schedule can help ease the financial cost.
Tip courtesy of Seattle PI[17]
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These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information. 

 

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http://finance.yahoo.com/q/hp?a=10&b=30&c=2015&d=11&e=4&f=2015&g=d&s=%5EIXIC%2C+&ql=1
    
  


5 http://www.bloomberg.com/news/articles/2015-12-02/yellen-signals-confidence-in-economy-ahead-of-fed-rate-decision
  
6 http://www.usatoday.com/story/money/markets/2015/12/03/stocks-set-rebound-ecb-rate-decision-looms/76711922/
  
7 http://www.cnbc.com/2015/12/03/asian-stocks-expected-to-open-lower-as-ecb-decision-fed-comments-disappoint-investors.html
  
8 http://www.foxbusiness.com/economy-policy/2015/12/04/week-ahead-inflation-retail-sales-and-consumer-sentiment/


10 http://www.foxbusiness.com/economy-policy/2015/12/02/federal-reserve-beige-book/

11 http://www.cnbc.com/2015/12/03/us-crude-climbs-on-weaker-dollar-ahead-of-opec-meeting.html

12 http://www.marketwatch.com/story/chicago-pmi-suggests-us-manufacturing-is-still-gloomy-2015-11-30  

13 http://www.realsimple.com/food-recipes/browse-all-recipes/pot-roast-recipe

14 https://www.irs.gov/uac/Top-Year-End-IRA-Reminders-from-IRS

15 https://www.youtube.com/watch?list=UUPLAYER_GolfTipsMag&time_continue=18&v=q3m4q1cQVoo

16 http://www.aarp.org/health/conditions-treatments/info-2015/high-tech-ways-to-stay-healthy.html?intcmp=HEA-HLLV-FLXSLDR-SLIDE2-RL1

17 http://www.seattlepi.com/news/article/52-tips-for-living-green-1269861.php


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