Highlights of this Week’s Update:

  1. Social Security announces 2015 COLA-1.7%-with no increase in Medicare Part B Coverage.
  2. Major stock indices end last week slightly higher.
  3. Interest rates dip.
  4. Employment numbers show steady improvement, but don’t account for the “underemployed”.
  5. Don’t’ forget Veterans Day on Tuesday, November 11th.

READ ON FOR MORE DETAILS………………………………………….

Social Security and Medicare Cost-of-Living Increases for 2015:

The Social Security COLA increases benefits by 1.7% in 2015.  The good news for recipients is that they will be able to keep the entire increase next year as Medicare Part B rates remain the same.  Those on Medicare should take this time to review their current Part D drug plan and have until December 7th in the open enrollment period to make a change.  The social security wage base will rise by 1.28%, from $117,000 in 2014 to $118,500 in 2015 (+1.28%).  This means wage earners making $118,500 + in 2015 will pay 6.2% or $7,342 and the same amount matched by their employer.  An Additional Medicare tax of 1.45% (matched by employer) will also be paid on all earnings.

The Markets:

Last week the major U.S. stock indices managed to eke out gains, with the Dow Jones Industrial Average gaining 1.05%, led by gains in Visa, while the S&P 500 rose just .69%. (MarketWatch) The mid-term election results produced no major surprises, and ended in line with most pre-election polls.  As we indicated last week, we felt the markets had already priced in the outcome.

Interest rates eased lower, with the yield on the 10 year U.S. Treasury ending at 2.32% and the 30 year U.S. Treasury Bond finishing the week at 3.04%.  The average rate for a 30 year fixed rate mortgage was 4.05% and the 15 year fixed rate ended Friday at 3.19%.  (Bankrate.com)

The recent economy might once again be referred to as a “Goldilocks” period – not too hot and not too cold. It’s moderate economic activity that’s not too hot and not too cold. In other words, it can lead to noninflationary growth, which might possibly promote corporate profits and encourage an expansive monetary policy – all which can be a positive for stocks.

This brings us to the labor market and last Friday’s release of the jobs’ report. The U.S. Bureau of Labor Statistics (BLS) reported nonfarm payrolls grew by 214,000 in October, and August and September were revised modestly higher.

We’ve now experienced nine straight months of nonfarm payroll growth in excess of 200,000, the longest 200,000-plus winning streak since the mid-1990s (BLS). In some sense, it’s been a Goldilocks labor market since the start of the year. Not too hot, or one that would encourage a significantly tighter monetary policy, or one that is too cold, which might be signaling an economic contraction.  Unfortunately, this does not account for the “underemployed” or those that have accepted part-time work vs. their need and desire for a full-time job.


Shaded area marks recession; Last date: Oct 2014

A bond market holiday

Tuesday November 11th is Veteran’s Day. The stock market will be open but the bond market is closed.  Don’t forget to express your heartfelt gratitude for all the men and women who have so valiantly served our great nation. Many have made extraordinary sacrifices so we may live in freedom, relative safety, and prosperity.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.


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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.

4 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.

5 London Bullion Market Association; gold fixing pricing at 3 p.m. London time; 2013 year-end price fixing at 10:30 a.m. London time; Prices can and do vary; past performance does not guarantee future results.