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Despite Disastrous Jobs Report Stock Surged 1.6% Friday

Despite Disastrous Jobs Report, Stocks Surged 1.6% Friday Since the Coronavirus bear market low on March 23, 2020, stocks have soared 26.8%! That’s only 14.5% off the all-time closing high on the S&P 500 on February 19, 2020. On the same day the Labor Department announced job losses that are literally off the chart, that the nation lost a decade of jobs gains, the stock market shot up by 1.6%! Why? Stocks are looking past the pandemic, at a sharp recovery. Here’s a look at three forecasts for the economy, from independent institutions. The most optimistic is the consensus forecast of 60 economists in early April. They expect a v-shaped recovery back to the pre-pandemic level of economic activity by the end of 2021. The international Monetary Fund forecast is a bit less sanguine, projecting that U.S. gross domestic product will be 1.5% smaller at the end of 2021 than at its pre-pandemic peak. And finally the least optimistic of the three forecasts is from the Congressional Budget Office, which project the economy will be 3% smaller at the end of 2021 than it was in the quarter before the outbreak. While the three forecasts differ about the precise strength of the recovery, That’s why, despite disastrous economic news, stocks have soared. Please contact us with any questions or to set up a meeting fulbrightteam@moneyful.com , and don't hesitate to share this video with people who might benefit from our work

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The Beginning of The End by Fulbright Financial Consulting, PA Of Durham, NC

The Beginning Of The End? The Coronavirus financial crisis is being compared to the near-collapse of the global financial system in 2008 and The Great Depression from 1929 to 1939, but there is one big difference this time: The Fed. The Federal Reserve Bank is using innovative new tools to contain the financial damage of the Coronavirus epidemic. In the financial crisis of 2008, the chairman of the Fed at the time, Ben Bernanke, an academic who had spent decades studying previous financial crises, repeatedly deployed a technique called quantitative easing, expanding the Fed’s balance sheet to buy back U.S. Government bonds on the open market to lower long-term interest rates. The tactic had never before been used by a central bank in a major economy. It worked! and QE was one of the reasons the U.S. recovered smoothly from The Great Recession of 2008 and 2009. The Fed’s response to the Coronavirus crisis is literally 10 times more powerful. Under the $2.2 trillion Coronavirus Aid, Relief, and. Economic Security Act enacted March 27, 2020, the U.S. Government allocated $454 billion to Federal Reserve Bank Special Purpose Vehicles that the central bank can leverage 10 to 1, enabling it to lend up to $4.54 trillion to companies. That’s reportedly more than all U.S. commercial and industrial loans outstanding at the end of 2019 plus all the new corporate bonds issued during 2019 combined! Although this expansion of the Fed’s power has been criticized already as a step toward a centrally planned economy, the government action limits the risk of massive corporate bond defaults. The U.S. led the worldwide economic recovery back from the global financial crisis of 2008, in part because of the Fed’s innovative approach, and Yankee ingenuity, in the form of the Fed’s new tools, is at play once again in fighting the Coronavirus financial crisis. Please contact us with any questions or to set up a meeting fulbrightteam@moneyful.com , and don't hesitate to share this video with people who might benefit from our work

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Fulbright Financial Consulting, PA Duham NC On A Case For Bull Market

A Case For A Bull Market In 2020 What if the optimists are right? What if the glass is half full? Although no one can predict the next move in stocks, and you don’t want to bet your retirement on it, it’s not hard to see the case for a bull market in 2020 — even after a spectacular year for stocks in 2019. The Standard & Poor’s 500 index historically trades at a market multiple of 16 to 18 times its expected earnings. Put another way, the average share in the S&P 500 historically is priced at between 16 and 18 times every dollar of profit per share it’s expected to earn in the next year. Lately the price of the S&P 500 has been trading above the normal valuation band, at about 19 times expected earnings. Normally that would be a sign of overvaluation, but what if the market multiple continues to expand? The Standard & Poor’s 500 index historically trades at a market multiple of 16 to 18 times its expected earnings. Put another way, the average share in the S&P 500 historically is priced at between 16 and 18 times every dollar of profit per share it’s expected to earn in the next year. Lately the price of the S&P 500 has been trading above the normal valuation band, at about 19 times expected earnings. Normally that would be a sign of overvaluation, but what if the market multiple continues to expand? The latest economic data from The Conference Board on the leading economic indicators, the Census Bureau on housing starts, and the Bureau of Economic Analysis on real disposable income all confirmed The Wall Street Journal’s most recent consensus forecast of economists for an expected growth rate of just under 2% for the next five quarters and the S&P 500 index once again broke all-time high price records on the news. While you never make financial plans based on things going right, sometimes the glass indeed is half-full. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.

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Can You Spot The Hidden Trend? By Fulbright Financial Consulting, PA

Can You Spot The Hidden Trend? Can you spot the hidden trend? A major demographic trend that is driving the U.S. economy and financial markets is right here in front of your eyes, but it’s not so easy to see without a trained eye. If you knew what to look for, you’d see that China, Japan, Germany, and other major economies are grappling with a decline in their working-age population in the decades ahead, while the U.S. working-age population is expected to grow. Since growth in the size of the labor force is one of the two determinants in economic growth, it’s a key fundamental factor that will shape the future of financial markets. With the working age population stalling, Europe’s economic growth is sluggish. To stimulate the economy, Germany’s central bank has pushed lending rates into negative territory, which is unprecedented. Germany is the world’s second largest issuer of government-backed bonds and its action has depressed interest rates on U.S. Treasury Bonds. While the demographic trend is hidden in plain sight, it’s set to shape growth in major economies across the globe for the decades ahead, and it means low interest rate conditions could persist for years. No one can predict the next move in the stock market, but demographics are fairly stable and predictable. This is an important trend. Be sure your strategic investment plan — especially, your portfolio’s allocation to bonds — is in sync with this key fundamental. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting, and don't hesitate to share this video with people who might benefit from our work.

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Longest U.S. Expansion Keeps Rolling By Fulbright Financial Consulting, PA, Durham, NC

Longest U.S. Expansion Keeps Rolling Third quarter economic growth was just revised upward, and the new monthly personal income figure over the last 12 months, after adjusting for inflation, accelerated sharply. This newly released data confirms that the 10-year-old expansion — already the longest in post-War history — is likely to continue at a modest sustainable pace in the months ahead. First, let’s look at the upward revision to gross domestic product. These are the four components of economic growth — consumers, business investment, exports net of imports, and state and local government spending. Every quarter, the government issues three estimates of the growth rate. The first estimate, released three weeks ago, was for a third-quarter growth rate of 1.93%. The new figure, 2.13%, is the first in a series of three revised estimates released by the Bureau of Economic Analysis before the final third GDP figure for the quarter ended September 30th, will be released on January 10th. An upward revision of 10% is sizable, and most of it came from growth in the rate of business investment, hinting at a bottom in this key factor in the wealth of the nation. This new data confirmed that U.S. growth is being driven by consumer strength and low inflation.

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Retirement Income Reality Check by Fulbright Financial Consulting PA

With stocks hovering around an all-time record high, a growing likelihood of a Federal income tax rate hike by 2021, and the deadline for end-of-year tax tactics closing in fast, this is a timely reminder to run a reality check on your retirement income plan. An unusual confluence of tax, financial-market and political factors make this a particularly good time for high-income and high net worth individuals to check their retirement income plan. Let’s get specific about current conditions: In 2019, the federal government is spending a trillion dollars more than it collected in revenue, and at the end of 2018, the national debt totaled $22 trillion Meanwhile, changing political winds could sweep in higher federal tax rates. Managing your tax bracket now — in case of a hike in federal income tax brackets — could lower your tax bill, not just for 2019 but in the year or two ahead, as well. Proactive tax planning before the end of 2019 may be especially timely for business owners with an interest in a pass-through entity, like an LLC, S corp, or sole proprietorship.

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Find The Major Economic Trend Hidden In This Picture By Fulbright Financial Consulting, PA

Major economic trends are always unfolding but are hidden in plain sight. Along these, only if you know what to look for would you see the spectacular After the Commerce Department released the latest monthly retail sales figures on Friday morning, the financial press and financial cable TV reported that October’s three-tenths of 1% uptick allayed fears of a recession but was nothing spectacular. The press totally missed the hidden trend in the economic picture by not adjusting retail sales for inflation. Inflation is at a long-term low and is not showing any sign of returning anytime soon to its performance in the 1970s, 80s and 90s. A low inflation rate masks strong real growth in consumer spending, but spotting it in the current investment picture requires a trained eye. Viewed from a prudent professional perspective, the newly released retail sales data helps explain why stock prices have been breaking records. Answers to life’s questions are often right in front of us, but we don’t see them. Please contact us with any questions fulbrightteam@moneyful.com or to set up a meeting at 919-544-0398, and don't hesitate to share this video with people who might benefit from our work.

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Is The New Record High In Stocks Irrational? By Fulbright Financial Consulting, PA

When stocks repeatedly break new all-time highs, as they have done in recent weeks, you have to start wonder if investors are growing irrational, overly exuberant. Here are the facts. These four charts show the latest reading of key fundamental economic factors driving record financial market prices. Let’s start with the latest figures on the nation’s gross domestic product. Third quarter growth tallied by the federal government’s Bureau of Economic Analysis came in at 1.93%. The net of three of the four factors in economic growth — business investment, net exports, and state and local government spending — did not contribute to growth but consumer strength offset them and was the source of the 1.93% quarterly growth rate for the U.S.

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