U.S. stock markets closed the 100th trading day of 2017 on May 25th, with the S&P 500 having risen 7.9% over that period. This continues the bull market that began in early March of 2009, with this bull into its 9th year.
There have been 23 years since 1950, not including 2017, where the S&P 500 has risen 7.5% or more during the first 100 trading days. In all those instances, the S&P 500 closed higher for the year, with an average gain of 23.4%. If 2017 performs at the average, and we have no reason to believe it will, the S&P 500 would finish the year at 2760.
While the domestic bull continues to run, we find much the opposite story internationally. International Developed Markets, primarily Europe, remains below 2007 highs, and Emerging Markets have performed more poorly than International Developed. Year to date, both International Developed and Emerging Markets have outperformed the S&P 500, though they have a long way to go before they get back to their long term mean return.
The DOL fiduciary rule, which was to have gone into effect on April 10th, and whose start date was delayed until June 9th, with full implementation by January 2018, has become a political football. The short version is that the rule would impose on those advisors who manage IRAs for clients, the same fiduciary standard which the DOL uses for those offering advice to retirement plans.
Needless to say, this rule is being heavily opposed by sellers of annuities, as it is difficult, if not impossible, to serve as a fiduciary and sell a variable annuity at the same time. Our recommendation for consumers is to work only with a financial professional who will choose to be a fiduciary.
Turning to economic news, the Bureau of Economic Analysis revised the Q1 GDP numbers, showing a gain of 1.2%, compared to previous estimates of 0.7%. During Q1 2017, consumer spending increased 0.44%, compared to a 2.40% increase in Q4 2016. And, fixed investment jumped to an increase of 1.85%, compared to a 0.46% increase in Q4 2016. The bulk of this fixed investment was non-residential.
The Census Bureau reported 138,000 new jobs were created in May, less than the expected 185,000 new jobs. Private sector gains were 147,000, meaning there was a decrease in government jobs by 9000. A decrease in government payroll is a positive, as far as we are concerned. And, the Census Bureau reported the official unemployment rate at 4.3%.
The FOMC meets next week, on the 13th and 14th. Expect some announcement regarding interest rates, even if the announcement is that there will be no change.
The U.S. Federal Reserve holds about $4.2 trillion in Treasury and mortgage backed securities, up from about $800 billion in 2007. The Fed plans to begin reducing this position later this year, though by as little as $10 billion to $15 billion per month.
Many of us are invited into conversations from time to time, where our best approach is to listen, and seek to understand. This could be with a child, spouse, business partner, employee, client or customer, or other situations. Over the years, we have learned several things which help, when we are in these conversations. Since we are still learning, we invite you to share what you have learned. Here is what I have learned so far.
Be engaged with my eyes and your posture. Look at the person, and choose not to be distracted. As one author said, lean into the conversation. A slouched position, or folded arms, communicates unavailability and disinterest.
Do not interrupt when someone else is talking. Interrupting when someone else is talking diminishes the other person, and communicates that who they are, and what they have to say, doesn’t matter to me.
And, give the person who is talking the time to finish. Just because someone stops talking doesn’t mean they are finished talking. It may mean they are organizing their thoughts, or deciding how much to share. Or they may be deciding if they can trust me enough to really share their heart. If I jump into the conversation, as soon as someone takes a breath, I may miss the thing I needed to hear most, and will almost always miss an opportunity to build trust and confidence.
My friend Cheryl teaches her team the nine second rule. That is, she teaches her team to allow nine seconds of silence to pass, once someone finishes talking, before someone else speaks.
Don’t attempt to top their stories. If someone shares an experience in this context, attempting to share one of my own experiences which was better/more exciting both diminishes the person, and speaks to my insecurities.
Ask questions, for the sake of clarity. It is true that I see and hear the world as I am, not as it is. Therefore, as I hear someone share, what I’m understanding, and what they are meaning, may well be two different things. I’ve learned, if I am unsure of what I’m hearing, to simply say “Here is what I heard. Is that what you meant?”
Seek, and listen, to understand, not to reply. Developing a reply while someone is talking distracts me from the conversation, and increases the likelihood that I will miss important information. It also communicates that I am not actually listening. Often, the greatest thing we can do for someone else is to allow them to be and feel known, heard, and understood.
What can you add to this list, in the interest of helping all of us improve?
Quote of the week:
“Every time you make a choice, you are turning the central part of you into something a little different than it was before.”