9/8/17 – Stocks Retreat as Irma Dominates Headlines

Stocks declined this week while much of Florida prepares for one of the strongest storms on record to hit the mainland. The Dow declined 0.9% while the S&P 500 declined 0.6%.

While Irma headlines justifiably dominated the news cycle, there were some important financial developments this week as well. First, sources reported that President Trump is unlikely to nominate Senior Economic Advisor Gary Cohn to the Chair of the Federal Reserve. It was widely believed Cohn was well-positioned for the role and markets were eagerly anticipating his ascension into the role. Mr. Cohn is a former trader and #2 at Goldman Sachs. He lacks the academic pedigree of previous Fed Chairs, but many investors were excited to have an individual with significant market experience. In addition to the Fed Chair position, this report could signal the end of the Cohn’s role in the Administration. Cohn has been an important driver for tax reform, so his leaving the Administration could threaten that push. Read More

The 10-year Treasury bond approaching 2% was another important development this week. I’ve written about this a couple times in the last few months, but the yield on the 10-yr continuing to decline suggests the bond market doesn’t believe growth is improving in the US economy. Some of the rise we’ve seen in the stock market is predicated on the idea that overall economic growth will break out from our slump of the last 8-16 years. The 10-yr traded below 2% for eight months leading up the election in November, but rose sharply following Trump’s victory. Much of the enthusiasm in the bond market about Trump’s victory and what it meant for economic growth is gone. It is important to note that the bond market is notoriously pessimistic. There’s an old joke that the bond market has correctly predicted nine of the last five recessions, meaning it often signals recessions that never happen. I don’t believe we are nearing a recession, but the prospects for 3% annualized growth seem dim. Read More

One of the under-reported aspects surrounding hurricane Irma is the Florida insurance market. After hurricane Wilma in 2005, Florida implemented a lot of new restrictions and regulations on property insurance sold to state residents. As a result, many large insurance companies significantly reduced their exposure to the state. Smaller competitors popped up and many Florida residents have insurance through these smaller companies. A long stretch with minimal hurricane damage pushed premiums lower, creating a situation where insurance companies might be under-capitalized heading into this storm. Florida requires many of these small insurance companies to reinsure their exposure, some of which was done through catastrophe bonds. Catastrophe bonds are sold to large institutional investors. The bonds pay higher interest rates than government or corporate bonds, but also carry more risk. If there are no major claims situations, the investors make a good amount of money. However, a massive storm like Irma could see large losses on many of these bonds. Pension funds and other large investors are about to see whether they’ve been appropriately compensated for the risk they assumed. Similar to the mortgage crisis, I’m guessing many institutional investors are about to realize they have not been. Fortunately the catastrophe bond market is significantly smaller than the mortgage market. In addition to potential investor losses, this could set up a situation where numerous policy holders find their insurance company isn’t able to pay a claim. Read More

Oil increased this week, gaining 0.5% to close at $47.55/barrel. The yield on the 10-yr Treasury moved sharply lower, down 2.05% from 2.17% last week. The average rate on a 30-yr fixed continued lower to 3.78% from 3.82% last week. This is the lowest mortgage level of the year.

Close Weekly YTD
Dow Jones 21,797.79 (0.9%) 10.3%
S&P 500 2,461.43 (0.6%) 9.9%
Oil 47.55 0.5% (11.8%)
10-yr Treasury (∆ in bps) 2.05 (11) (39)

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9/1/17 – Economic Growth and Jobs Headline Week

Strong Growth and Decent Jobs Headline the Week

Stocks continued moving higher this week, with the Dow gaining 0.8% while the S&P 500 added 1.4%. On Wednesday, stronger than expected economic growth numbers were released. Growth in the second quarter was estimated at an annualized rate of 3.0%, exceeding the 2.7% consensus estimate. This is a good number, but it is only one quarter. Multiple quarters over the last eight years have seen annualized growth over 3%, and yet the economy grew at a less-than 2.5% rate every year. It’s always good to see positive growth and hopefully this is a start of a higher growth trend, but I’d like to see it for a few more quarters before I’m a believer. Read More

The August jobs report released this morning showed the economy added 156k net new jobs while the unemployment rate ticked higher to 4.4% from 4.3%. The consensus estimate had been for 179k new jobs this month. Additionally, the last two months of data were revised lower. All this supports my above thought that 2Q growth might be more of a blip than the start of a trend. We’ve basically been in the same job and economic growth trend since the financial crisis ended in 2009. Job growth averaging under 200k a month with annualized economic growth under 2%. Both figures are okay, but underwhelming. Growth is more difficult on a bigger base, but from the end of World War II through 2000, the US economy averaged 3.1% annualized growth. Read More

The Houston area suffered a massive hurricane over the last week. Some parts of Houston received almost 50 inches of rain in 4-5 days. The average annual rainfall in the US is 39″ a year, so this storm dropped 125% of the national average in less than a week. That’s hard for me to comprehend. In total, over 15 trillion gallons of water hit the Houston area, that’s double what Katrina dropped on New Orleans. There’s been a lot of talk about whether Houston was prepared and how the response has been, but so far only 30 people have died. During Katrina, over 1,800 people died. That seems like a pretty good result, all things considered.

Oil declined again this week, dropping 1.1% to close at $47.29/barrel. The yield on the 10-yr Treasury moved slightly lower, rounding up 2.17% versus rounding down to 2.17% last week. The average rate on a 30-yr fixed continued lower to 3.82% from 3.86% last week.

Markets are closed on Monday for the Labor Day holiday. Have a happy long weekend.

Close Weekly YTD
Dow Jones 21,987.56 0.8% 11.3%
S&P 500 2,476.55 1.4% 10.6%
Oil 47.29 (1.1%) (12.2%)
10-yr Treasury (∆ in bps) 2.17 (1) (28)

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8/25/17 – Stocks Rebound, but Risks Remain

Stocks reversed a two week losing streak, but risks remain. For the 10th consecutive week, investors have pulled money out of stock mutual funds. Over that period, $30 billion has left the equity markets through mutual fund redemptions. With so much passive money in the market these days, equity flows can be a good predictor for future price performance. Mutual fund flows can indicate how retail investors are feeling about the market. Additionally, as funds are forced to carry out large sell orders these fund flows can move the market. Given that we are close to all-time highs with continued concerns around tax reform and North Korea, I’m comfortable holding higher-than-average cash balances in portfolios. For the week, the Dow increased 0.6% while the S&P 500 increased 0.7%.

Heading into fall means football. A staple for bars and restaurants during football season is chicken wings. Consumer demand for wings continues to grow and prices are starting to follow. The wholesale price of chicken wings has increased 20% this year and frozen storage stocks are a third lower than at the same time last year. The driver seems to be increased consumer demand. If you’re in restaurants and bars in the coming weeks, expect to see higher prices on wings and specials on boneless wings. Boneless wings are made from breast meat and are less expensive for restaurants to buy. Wings were once an afterthought and restaurants started pushing them as appetizer specials. Well, a market was successfully created and prices are responding accordingly. Read More

Oil declined again this week, dropping 1.6% to close at $47.83/barrel. Hurricane Harvey put some pressure on oil later in the week as any damage to refineries could increase global supply as ships lose the ability to unload oil to some gulf coast refineries. The yield on the 10-yr Treasury moved lower, closing at 2.17% from 2.19% last week. The average rate on a 30-yr fixed rate moved to the lowest level of 2017, 3.86% from 3.89% last week.

Close Weekly YTD
Dow Jones 21,813.67 0.6% 10.4%
S&P 500 2,443.05 0.7% 9.1%
Oil 47.83 (1.6%) (11.2%)
10-yr Treasury (∆ in bps) 2.17 (2) (27)

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8/18/17 – Trump Tax Reform Still Possible?

Is Trump Tax Agenda Still Possible?

Stocks declined for the second straight week. This is the first time we’ve had consecutive down weeks since May. For the week, the Dow declined 0.8% while the S&P 500 was down 0.6%. All the week’s losses occurred on Thursday as the Dow was down more than 1% for the first time in 63 trading days. It was a tumultuous week for the President and rumors yesterday suggested that Gary Cohn, Director of the National Economic Council, might leave the administration. Many market participants think highly of Mr. Cohn and fears rose that if he left, other pro-business members of the administration could leave as well. Today, Steve Bannon, the controversial Trump advisor stepped down. This calmed markets because it increases the likelihood that Cohn and others will remain.

All of this gets to corporate tax reform. One of the larger questions about the market rally this year is the extent that future tax reform is already priced in. Are current stock valuations based on current earnings and fundamentals or are investors already pricing in higher earnings going forward based on lower corporate taxes? If it’s the latter, any change in expectation about tax reform should cause a market sell-off. Corporate tax reform should be a relatively easy issue. We have, by far, the highest corporate tax rate in the industrialized world. We are also the only country that taxes global earnings instead of simply US earnings. Most politicians on both sides agree we need to make changes, but Republicans can’t seem to put a plan together and Democrats seem to think ‘doing nothing’ is their best political move. I think the market is expecting, at best, a 50% chance of meaningful tax reform. Nothing about the way DC has functioned in the last nine years suggests a big, bipartisan compromise will happen. Corporate earnings have been good, the economy is reasonably strong and stock prices continue to look attractive relative to bonds. Those factors give me confidence that there is support for the market’s gains this year even if no tax reform occurs.

Oil declined again this week, dropping 0.3% to close at $48.63/barrel. The yield on the 10-yr Treasury remained steady, closing at 2.19% again this week. The average rate on a 30-yr fixed rate moved slightly lower this week, to 3.89% from 3.90% last week.

Close Weekly YTD
Dow Jones 21,674.51 (0.8%) 9.7%
S&P 500 2,425.55 (0.6%) 8.3%
Oil 48.63 (0.3%) (9.8%)
10-yr Treasury (∆ in bps) 2.19 0 (26)

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8/11/17 – Geopolitics Drives Markets Lower

Volatility is Back on Geopolitical News

Stocks declined this week, largely driven by concerns around the North Korea situation. President Trump appeared to draw a firm line in the sand about preemptively attacking North Korea only to have Kim Jong Un almost immediately cross that line by threatening to attack Guam. The situation seems to have diffused somewhat over the last two days, but this will be an important issue to follow. While North Korea has no impact on the global economy, any war could quickly cause massive damage in South Korea, Japan or even China, all of which would have a big impact on the global economy. Over the last week, I’ve been selling stocks to raise cash and provide some protection from this potential sell-off. The markets are near all-time highs and it seemed prudent to me to completely sell some positions and reduce some others. While I hope Kim Jong Un will recognize any military action is a losing proposition for him personally and will back down, I’m comfortable reducing risk in your portfolios given the uncertainty. For the week the Dow declined 1.1% while the S&P 500 dropped 1.4%.

Retail Earnings – Traditional brick and mortar retailers continue to feel the pain from Amazon’s increasingly large share of retail sales. Most of the major department stores reported earnings yesterday. Since then, Macy’s is down 10%, Kohl’s is down 8%, Dillard’s is down 21% and JC Penney’s is down a shocking 24%, in two days. JC Penney’s is now at an all-time low valuation, going back to the 1970s. Customer traffic keeps declining and while some earnings and sales weren’t that bad, the future expectations aren’t inspiring. Read More 

Stock Settlement – When you buy or sell a stock, the transaction doesn’t officially close, or settle, for three days. This is important when it comes to how quickly you can access money in an investment account. Cash is always available same day, but if stocks need to be sold, it takes three days to get access to the funds. Meaning, if a stock is sold on Monday, that money could not be transferred out until Thursday. This has been the market convention for years, but that’s changing this week. Stock settlement is being reduced to two days. I don’t understand why it can’t be one day, but it is still an improvement.

Oil declined again this week, dropping 1.4% to close at $48.76/barrel. The yield on the 10-yr Treasury moved lower, closing at 2.19% from 2.27% a week ago. The average rate on a 30-yr fixed rate moved lower this week, to 3.90% from 3.93% last week.

Close Weekly YTD
Dow Jones 21,858.32 (1.1%) 10.6%
S&P 500 2,441.32 (1.4%) 9.0%
Oil 48.76 (1.4%) (9.5%)
10-yr Treasury (∆ in bps) 2.19 (7) (26)

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Dow Tops 22k, 401k Changes on the Horizon?

Stocks continued climbing higher this week with the Dow index exceeding 22k for the first time ever. Boeing was the largest driver of the index, adding ~35% of the 1,000 points between 21k and 22k. The Dow index is a strange index in that it is weighted by the share price of the member companies instead of the total value of the company. This means that Boeing, which is the most expensive stock on a dollar price basis, has the most impact on the Dow’s performance, even though it is only the 20th largest company of the Dow’s 30 companies. For the week, the Dow gained 1.2% while the S&P 500 gained 0.2%.

Strong Jobs Report for July – The economy added a net 209k jobs in July, exceeding the consensus estimate of 180k. The unemployment rate dropped to 4.3%, matching a 16-year low. This is the 82nd straight month that combined public and private employment has increased. That’s almost three years longer than the second-best streak from 1986-1990.

Potential 401k Changes – A huge potential source of government revenue involves eliminating the tax-destructibility of 401k contributions. This change has been mentioned again recently during the tax reform discussions. CNBC estimated the other day it could be worth almost $600 billion in additional taxes through 2020. 401k plans are a major source of retirement savings for most Americans. In theory the tax deduction encourages people to save. 401k plans work similar to a traditional IRA, where you get a tax deduction in the current year, but when you withdraw money in retirement you pay taxes on withdrawals as if it was regular income. If you have a 401k/IRA with $1 million, you really have approximately $750k because the government has a tax claim on the rest. The potential change would generate significant revenue for the government currently, but has met sharp resistance. Personally, I think this could be a big benefit to investors over the long-term. This would convert 401k plans going forward into Roth 401ks. In a Roth, there is no current tax deduction, but future withdrawals are not taxed. Even if people save slightly less in a Roth 401k, they will likely finish out ahead in retirement. It’s the same reason I recommend a Roth IRA over a traditional IRA for people who qualify. The ability to have tax-free withdrawals in retirement is more valuable than the current benefit for most people. Read More

Oil pulled back slightly this week, dropping 0.6% to close at $49.45/barrel. The yield on the 10-yr Treasury moved lower, closing at 2.27% from 2.29% a week ago. The average rate on a 30-yr fixed rate ticked higher this week, to 3.93% from 3.92% last week.

Close Weekly YTD
Dow Jones 22,092.81 1.2% 11.7%
S&P 500 2,476.83 0.2% 10.5%
Oil 49.45 (0.6%) (8.2%)
10-yr Treasury (∆ in bps) 2.27 (2) (18)

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7/21/17 – Stocks Near Record Highs, Hedge Funds Lagging

The S&P 500 reached new record highs this week before pulling back slightly today. The Dow was pulled lower on the week by disappointing earnings reports from Goldman Sachs and IBM. Numerous large companies reported earnings this week including Microsoft, GE, Philip Morris International, Colgate, Visa and Travelers Insurance among others. Generally companies have exceeded analyst estimates, but a few notable misses hurt the Dow index. Overall, it was a pretty quiet week, typical for the last couple weeks of July and first few weeks of August. Next week we’ll continue to get earnings report as well as the first report on 2nd quarter GDP. Many investors are anticipating to the GDP report since increasing economic growth has been a major talking point for the Trump administration.

Hedge Fund Performance and Taxpayers – Hedge funds are investment vehicles for the very wealthy and large institutional investors. They charge exorbitant fees on the promise of delivering strong returns. Most hedge funds charge 2% of the assets under management plus 20% of any gains. However, through the first half of 2017, hedge fund performance was roughly half the overall market, up only 4.8%. This was the best six-month period for hedge funds since 2009, in a market that has generally been strong. This poor track record has become a long-term trend for the sector, partially because of the fee structures. Where do taxpayers come into this situation? Many pension funds, both government and private sector, invest heavily in hedge funds. Many states and municipalities are forced to make sizable pension contributions because their investments haven’t performed like they expected. Pension funds are supposed to have a fiduciary responsibility to pensioners and yet many have endured years of poor performance even though the hedge fund managers have made millions, or even billions from managing pension assets. How much longer are governments going to ask taxpayers to fund large pension contributions when the investing side is under-performing while collecting huge fees? Read More

Oil declined this week, decreasing 2.1% to close at $45.61/barrel. The yield on the 10-yr Treasury moved lower, closing at 2.24% from 2.33% a week ago. The average rate on a 30-yr fixed rate moved lower this week, to 3.96% from 4.03% last week.

Close Weekly YTD
Dow Jones 21.580.07 (0.3%) 9.2%
S&P 500 2,472.54 0.5% 10.4%
Oil 45.61 (2.1%) (15.4%)
10-yr Treasury (∆ in bps) 2.24 (9) (21)

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7/14/17 – Stocks Close at All-Time Highs

Stocks rallied this week following comments from Fed Chairwoman Janet Yellen that we might not see additional interest rate increases this year. Markets responded very positively to the news and closed the week at all-time highs. For the week, the Dow gained 1.0% while the S&P 500 increased 1.4%. Earnings seasons started today with JP Morgan, Wells Fargo, PNC and Citigroup reporting. All four beat expectations, but all four stocks traded lower on the news. Over the next few weeks we’ll get 2nd quarter earnings from most major companies.

JP Morgan CEO Makes Headlines – JP Morgan released earnings today that far exceeded estimates, but comments from CEO Jamie Dimon on the earnings call created the headlines. It’s rare when CEOs speak so frankly, but his frustration with the lack of activity in Washington DC was apparent. The entire quote is in this link, but here’s the highlights, “Since the Great Recession, which is now eight years old, we’ve been growing at 1.5 to 2% in spite of stupidity and political gridlock. Because the American business sector is powerful and strong, and is going to grow regardless…what I’m saying is it would be much stronger growth had we made intelligent decisions and were there not gridlock…I don’t buy the argument that we’re relegated to this forever. We’re not. If this administration can make breakthroughs in taxes and infrastructure, regulatory reform…It’s almost an embarrassment being an American citizen traveling around the world and listening to the stupid sh*t we have to deal with in this country. And at one point we all have to to get our act together or we won’t do what we’re supposed to for the average Americans.” I find his candor refreshing and hope politicians on both sides can stop trying to win the 24-hr news cycle and make progress on key issues.

Pharmaceutical Pricing – The Orphan Drug Program encourages pharmaceutical companies to develop drugs for rare diseases and conditions. Without such a program, companies wouldn’t invest hundreds of millions, or billions, of dollars into drug research. Because of this, drugs for rare diseases often have exorbitant prices. Novartis, a Swiss pharmaceutical, finds itself in a difficult position with a rare disease drug called Ilaris. Ilaris treats rare inflammatory disorders and costs $16,000 per dose, or $64k a year. The company generated over $280 million in sales from Ilaris last year.

Recently a clinical trial showed Ilaris reduced complications (such as strokes) for patients who suffered a heart attack. This potentially opens the enormous cardiovascular market to Ilaris. Over 600,000 Americans suffer a heart attack each year. However, at $64k/yr, the drug is at least 10x more expensive the mass cardiovascular market would support. Federal regulations prevent a company from selling the same drug at different prices based on the use of the drug, meaning Novartis has a big decision to make. Slash the price and hope Ilaris can penetrate the cardiovascular market or maintain the price and retain a small, but consistent revenue stream. Some analysts think Ilaris could be a $1 billion drug in the cardio market, but there’s no guarantee doctors will embrace it. What is best for patients? What is best for Novartis? Is there a way to slightly change the drug to get a new patent and then have tiered pricing by use?  So far, Novartis hasn’t announced its plans, but I find it a fascinating example of the economics of drug pricing and drug research and development. Read More

Oil rebounded this week, increasing 5.1% to close at $46.61/barrel. The yield on the 10-yr Treasury moved lower, closing at 2.33% from 2.38% a week ago. The average rate on a 30-yr fixed rate moved higher this week, to 4.03% from 3.96% last week. This is the first time since May that average mortgage rates were above 4%.

Close Weekly YTD
Dow Jones 21,637.74 1.0% 9.5%
S&P 500 2,459.27 1.4% 9.8%
Oil 46.61 5.1% (13.5%)
10-yr Treasury (∆ in bps) 2.33 (6) (12)

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7/7/17 – Jobs Report Lifts Stocks

Strong Jobs Report Lifts Stocks Higher on the Week

Stocks rallied today following a better than expected June jobs report. Today’s moves pulled both major indices positive on the week. The combination of the jobs report and the sharp move higher in the the 10-yr Treasury the last week or so points to a better economy than some have thought over the last few months. Read More

June Jobs Report – The US economy added 222k net new jobs in June. This was well above the 179k average estimate among economists. Additionally the figures for April and May were revised higher by 47k total jobs. The unemployment rate moved slightly higher to 4.4% from 4.3% a month ago. We’ve had a relatively soft stretch in the labor market over the first half of the year, so hopefully this is the beginning of a stronger trend and not an outlier. There are still concerns in the labor market. Too many working age Americans are out of the labor force and have given up looking for work. Wage growth has largely been anemic over the last eight years, although low inflation has helped mask the lack of wage growth. Too many people are working part-time jobs out of necessity rather than choice. All that said, from my point of view, the labor market has remained remarkably consistent over the last eight years. Job growth continues at a rate faster than population growth, but the headline numbers can overstate the true strength of the labor market.

Treasury Rates – I’ve been writing over the last couple months about the different messages the stock and bond markets were sending. The 10-yr Treasury rate, which is the rate the US government can borrow at for a 10-yr term, approached 2.1% just a few weeks ago. At that level, it’s hard to believe the economy can growth at anything approaching 3% a year. In the last 1-2 weeks, however, the 10-yr yield has spiked to 2.38%. That is still a very low level historically, but the sharp move suggests the bond market is not as pessimistic as it was. The stock market has largely moved sideways over the last month or more, so the optimism appears to be slowing in that market. I think we’re starting to see a consensus building that economic growth is likely to be similar to what it’s been over the last few years. Namely, a lackluster 2%-ish growth.

Oil reversed course this week, decreasing 4.0% to close at $44.35/barrel. The yield on the 10-yr Treasury moved higher again, closing at 2.38% from 2.30% a week ago. The average rate on a 30-yr fixed rate moved higher this week, to 3.96% from 3.88% last week.

Close Weekly YTD
Dow Jones 21,414.34 0.3% 8.4%
S&P 500 2,425.18 0.1% 8.3%
Oil 44.35 (4.0%) (17.7%)
10-yr Treasury (∆ in bps) 2.38 9 (6)

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6/30/17 – Stocks Lower in Great Week for Warren Buffett

Stocks finished down in the last week of June, but up for the month and the 2nd quarter. On the week, the Dow declined 0.2% while the S&P 500 declined 0.6%. Next week, markets are closed on Tuesday for the 4th of July holiday, but we will get some important news at the end of the week with the June jobs reports. We’ve had mixed reports the last few months and investors will be focused on the strength of the labor market and what that means for interest rate policy and economic growth. Have a Happy 4th of July Weekend!

Warren Buffett – Six years ago Bank of America was in trouble. It was still reeling from the financial crisis and needed a capital injection. While a risky investment at the time, Warren Buffett’s Berkshire Hathaway invested $5 billion in BoA in return for preferred shares that paid a 6% dividend and gave him an option to convert the shares into Bank of America stock at a price of just over $7/share. The preferred shares paid him $300 million annually in dividends and gave him until 2021 to convert to regular stock. As banks have strengthened, Bank of America announced it would increase its dividend. With the increase, the total dividends on the shares Buffett could convert exceed the $300 million he’s currently receiving. Additionally, Bank of America stock is now over $24/share. So, Buffett converts the shares, continues collecting $300+ million a year and now his $5 billion investment has a market value of $17 billion. Pretty good week for the Oracle of Omaha. It’s also a great lesson in staying the course. He is so good at ignoring the ups and downs of the market and investing heavily when he thinks the price is right. Read More

Illinois Bankruptcy – States can’t technically file bankruptcy like a company or municipality can. The situation in Illinois though is getting lawmakers attention and could lead to changes in bankruptcy law that would allow for a state filing. Illinois hasn’t had a budget in three years, it has $15 billion of unpaid bills and a staggering $251 billion in unfunded pension liabilities. The unfunded pension liability is almost five times the state’s annual spending.

The state pension is only 40% funded, a level many analysts believe is not possible to recover from. 25% of the state’s budget is going into pensions and it’s barely denting the problem. One issue from being so underfunded is the assets essentially can’t grow as fast as the liabilities because the asset base is so small. Even a relatively strong market this year is of minimal help. If the fund is earning a reasonable return, it’s still missing out on so much potential earnings because the fund is only 40% funded. However, future pension obligations keeps growing at the full rate.

Illinois’ state constitution prevents reducing pension benefits which gives the state limited flexibility in addressing the problem. As someone once told me, “If the law says one thing and the math says another, the math is eventually going to win.” That seems to be where Illinois is heading. Large pension cuts and pension reform is the only way this situation gets resolved. This highlights a point I’ve made here numerous times over the years. If you have the option to take a lump sum payment from a pension plan, especially a government pension plan, you should look closely at that offer. Read More

Oil broke a 5-week losing streak, increasing 7.2% to close at $46.20/barrel. The yield on the 10-yr Treasury moved sharply higher, closing at 2.30% from 2.15% a week ago. The average rate on a 30-yr fixed rate moved lower this week, to 3.88% from 3.90% last week.

Close Weekly YTD
Dow Jones 21,349.63 (0.2%) 8.0%
S&P 500 2,423.41 (0.6%) 8.2%
Oil 46.20 7.2% (14.3%)
10-yr Treasury (∆ in bps) 2.30 15 (15)

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