The Insurance & Annuities Channel

This Week: Themes of 2017

Times have changed, in more ways than one. This December has been especially hectic, with the transition in Brexit negotiations, U.S. tax reform debate and Bitcoin setting new highs every few minutes.

The Big Four Economic Indicators: Industrial Production Up 0.2% in November

Today's report on Industrial Production for November shows a 0.2% increase month-over-month, which was worse than the consensus of 0.3%. Industrial Production peaked in November 2014, only one point higher than its pre-recession peak in November 2007. The year-over-year change is 3.35 percent, up from last month's YoY increase.

Self-Driving Vehicles: The Race to Get Them on the Road

Technological advancements over the past two decades have moved the idea of self-driving cars from the realm of science fiction to fact. Recently, Franklin Templeton Investments assembled a panel of professionals to discuss the competition between traditional vehicle manufacturers and technology companies in the race to develop a truly autonomous car.

Weekly Unemployment Claims: Down 11K, Beats Forecast

Today's seasonally adjusted 225K new claims, down 11K from last week's 236K, was much better than the forecast of 239K. From the release: "Claims taking procedures continue to be disrupted in the Virgin Islands. Claims taking process in Puerto Rico has still not returned to normal. "

Consumer Price Index: November Headline at 2.2%, Core Remains Below 2%

The Bureau of Labor Statistics released the November Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.20%, up from 2.04% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.71%, down from the previous month's 1.77%.

Some Thoughts on 2018

2017 turned out to be a better year for the stock market than most investors surmised. For 2018, we yet again see investors avoiding one of the longest post-war bull markets in history and continuing to ignore the fundamentals driving markets higher.

NFIB Small Business Survey: Index Near All-Time High

The latest issue of the NFIB Small Business Economic Trends came out this morning. The headline number for November came in at 107.5, up 3.7 from the previous month and near its all-time high reached in July 1983. The index is at the 99th percentile in this series. Today's number came in above the forecast of 104.6.

A Municipal Official Statement Reader’s Abbreviated Checklist Manifesto

Natural disaster devastation, pension and other post-employment benefit actuarial uncertainty, changing political landscapes, shrinking regional economies and complicated legal descriptions of security and default remedies all contribute to anxiety in owning municipal bonds.

The Big Four Economic Indicators: November Nonfarm Employment

This commentary has been updated to include Friday's release of Nonfarm Employment. November's 228K increase in total nonfarm payrolls was accompanied by a combined 3K upward revision for September and October. The unemployment rate remained at 4.1%. The consensus was for 200K new jobs and the unemployment rate to remain at 4.1%.

The Best Strategy for Retiring Without Adequate Savings

Most research on retirement strategies assumes that people have saved adequately. But data on household savings shows that many households fall short, and will need to call on relatives or other sources for support. This raises questions about the best withdrawal or annuity strategies when savings are insufficient. It turns out that which strategy works best is different than for adequately funded retirements.

The Civilian Labor Force, Unemployment Claims and the Business Cycle

What does the ratio of unemployment claims tell us about where we are in the business cycle and our current recession risk? At present, the ratio for Continued Claims has been trending down. Excluding the 1981 recession, the Initial Claims trough lead time for a recession has ranged from 7 to 22 months with an average of 12 months if we include the 1981 recession and 14 months if we exclude it. Admittedly, the last recession is an extreme example, but the Initial Claims trough preceded its December 2007 onset by a whopping 22 months.

China Clears Way for More Foreign Participation

At this time of the year, smog in Beijing, China, can be overwhelming. Throughout the city this fog/smog prevents the sun from shining through. But, the pollution problems have not clouded financial activity.

Five Questions About US Tax Legislation

The US Senate approved a tax bill last weekend, and it now appears highly likely that final tax legislation will be passed in the next few weeks. Big changes to the tax rules will impact the economy, taxpayers and financial markets.

Gundlach: The Goldilocks Era is Over

Easy monetary policies during the post-crisis period have propelled equity prices higher and driven bond yields lower. But as central banks reverse their quantitative easing (QE) and raise rates, this “Goldilocks era” will come to an end, according to Jeffrey Gundlach.

Tax Cuts & Jobs Act Update

In our white paper, Tax Reform Near the Finish Line: What’s in the Bill, we summarize the portions of the Tax Cuts & Jobs bill of particular interest to investors, as well as the likely winners and losers under that legislation.