Tag Archives: Janet Yellen

Technology Upgrade Update – Rates Rise – Friday

On Monday of next week we hopefully successfully do a major upgrade to our internal email systems. This will mean each of our company emails will be down, but not all at the same time. As the switch occurs, while promised nothing will fall through the cracks by our IT team, if you happen to send an email and you have not heard from us, please re-send it just to be safe.

Rates

Ok, it’s a Friday so we will be brief, Janet Yellen, head of the Federal Open Market Committee (FOMC) notched another rate increase under her belt without disrupting the capital markets. Once thought impossible, so far, slow and steady (tortoise- not the hare) is winning the interest rate normalization race.

This is a good chart of the ever increasing rates… finally !

Fed Funds Rate 6-15-17 fredgraph

Ahhhh…. Today is a Friday… enjoy your day and your weekend !

Talk to you next week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

Interest Rate Increase and No One Cares? We do!

It is very interesting to watch the once ferocious markets hate a possible interest rate increase, only now to greet it like family.

Interest Rate Increase Today

It is highly likely the FOMC (Federal Open Market Committee) led by Janet Yellen will raise short term interest rates up to the 1% threshold at their announcement later today. What is more interesting is just a few quarters ago even a whiff of a raise threw the capital markets into a tailspin.

Past rate increase events:

  • The US Dollar soared as other countries across the world continued to push their rates down.
  • US Capital Markets threw a temper tantrum in dispute of a raise.
  • Headlines beamed with fear of the crazy FOMC raising rates.

Probably our favorite chart from our friends at JPMorgan- higher rates can be a good thing

There will be a day that it does matter. Rates can go too far which results in an inverted yield curve (short term rates are higher than long). For now it seems everyone is on the same page and digestion of higher rates is occurring.

Have a Great “Higher Short Term Interest Rate” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

Rate Increase in the Cards today!

Shhh…. at the penning of this post the gang is still sleeping (promised full attention this week) …. Couldn’t keep away from this mid-spring break update…

Rate Increase Today

Janet Yellen and the FOMC (Federal Open Market Committee) have signaled two rate increases this year. The capital markets have fully priced in an increase today.  Their increase will move “Short term” rates to .75 % or 75 basis points.

This will help short term bonds, checking accounts and the like.

Recall our friends at JPMorgan think rates have been too low for too long…. if they are correct, this increase may help accelerate the economy.


We agree!

Only time will tell if this is correct.

One thing is for certain, the capital markets are much more receptive to these increases than they have been in recent past.

Due to speed and security concerns, this will be my last post until next week …. shhh… the family will never know !

Have a great day!

John A. Kvale CFA, CFP

 

 

Janet/FOMC Pause on Rates, Markets Cheer

Not surprisingly, Janet Yellen and the gang at the FOMC (Federal Open Market Committee) hit the pause button last week on an interest rate increase.

No Rate Increase

Basically the FOMC is signaling no rate increase before the election. As strong of a conviction (huge review) that we have for a rate increase, we are fine with a delay given the coming election (first debate tonight.)

Capital Markets Pleased

Treasury Yields (rates) Down Bonds Up, Equities Up, Utilities (rate sensitive) Up

9-23-16-10-year-yield9-23-16-sp-5009-23-16-utilities

We were slightly surprised by the overzealous capital market reactions!

Have a Great Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

June 2016 Video, Planning Tip-Economic and Capital Market Monthly Review, By John Kvale

We are at the half way point of the year. In this review of the year so far and preview of the remainder, we look longer than our regular month for sentimental and digital diary reasons!

Here is our  June 2016, Extended view – Economic and Capital Market Review, with a great financial planning tip, and of course our Video for your viewing and listening pleasure.

Hope you enjoy!

June 2016 Video

 

Financial Planning Tip –

Estate Planning Docs In One Box

After discovering we DID NOT have a comprehensive high level Estate Planning article, a two-part series was happily created – for the record more articles similar to this are expected due to their popularity and handy reference ability:

ESTATE PLANNING DOCS

Will – Document that directs non-beneficiary directed assets (Ex ..house, property, cash and regular investment assets) and may create trusts for minors, names a Custodian, Executor and may also create trusts and Trustees for estate tax minimization and other uses (see final statement in article below on Trusts.)

Power of Attorney– Financial document that appoints someone other than you to make most financial decisions in your absence. .

Healthcare Power of Attorney – Document that appoints someone to make important healthcare decisions if you are unable.

HIPPA – Allows your appointed person to receive medical information on your behalf.

Living Will- Cease and Decease – DNR – These titles are one in the same and are frequently confusing. This document allows medical professionals to NOT mandate all possible care, should you become deceased mentally, but not in body function.

Estate Planning Docs Part Two – Trusts

TRUSTS – ALL TYPE REVIEW

Revocable Trust – By far the most common and most commonly misunderstood Trust of the bunch. Revocable means it can be changed at the grantors request.

Testamentary Trust – Trust that is usually embedded in a Will and is created upon the grantors death.

Irrevocable Trust – The Hulk of Trusts. Being Irrevocable, once established and funded, this Trust is a beast. Estate tax, liability, inheritance are just a few items that can be addressed with an Irrevocable Trust.

QTIP Trust : Qualified Terminal Interest Trust – Most common set up by Grantor to give direction to assets beyond the spouse.

Credit Shelter/A:B Trust – Type of trust that is used to help minimize Estate taxes by maximizing the first person in a married couples Estate tax exemption upon death commonly resides in a Will.

GST or Generation Skipping Trust – This handy estate planning trust gives relief to Grantors by jumping a generation and essentially skipping the Grantors children and passing to the grandchildren.

ILIT : Irrevocable Life Insurance Trust – This trust is very useful in getting life insurance proceeds out of a Grantors estate.

Here is a link to the original detailed post.

Economic Update

Brexit changes our view on rates

With the British vote to exit the European Union, the Federal Open Market Committee (FOMC) lead by chair Janet Yellen will be hard pressed to raise rates. The only reason we can see higher rates sooner rather than later now would be some (multiple reports needed) major inflationary factors that feed through to the economic reports- While big advocates of higher rates and our research shows rates have been raised during an election year, it’s likely off the table for the remainder of the year.

Brexit changes US Presidential Election

Brexit may also change the US Presidential election as the polls of the British were so far from accurate, we expect many to have less confidence in our current US Presidential polls.

Capital Markets Update

New all time high?

With the afore-mentioned rate increase off the table and possible international perceived disruption due to Brexit – US capital markets  may be the recipient of fresh capital from global corners of the world.

New highs (S&P 500) would not surprise us at this time and the odds are now better than not from our perch. Minor expansion in Bunny like fashion (explanation to come upon occurrence) looks possible, of course twists and turns have been the norm lately.

7-5-16 SP 500

Earnings are the ultimate driver of equity prices, and US capital markets are currently frothy if not overpriced.  We think they can get more overpriced due to the above concerns.

7-1-16 PE Ratio SP 500

 Long term average is 15!

Have a Great Day!

See you again at the end of July !

John A. Kvale

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
JK Street Cents Logo

 

 

May 2016 Video, Economic and Capital Market Monthly Review, By John Kvale

Here is our May 2016, Monthly Economic and Capital Market Review, along with a Video for your viewing and listening pleasure. Hope you are enjoying!

May 2016 Video

 

Financial Planning Tip –

Plan Travel Early

In an effort to help keep summer travel costs down, we ran across this neat chart from Cheapair.com

cheapair-2014_domestic_airfares-v5

 

Here is a link to the original detailed post.

Economic Update

Fed says rate hike possible

The biggest news of the month and maybe so far for 2016 is the Janet Yellen, Federal Reserve Chair and Federal Open Market Committee president put a possible rate hike back on the table. We have a terrific article that goes in great detail about this coming in the next Newsletter.  Here are a couple of takeaways:

  • FED is taking the temperature of the capital markets- they are taking it in stride so far
  • Higher rates CAN be a good thing – Post here
  • Can/has the FED raised rates during an election year? Answer soon
  • Capital Markets may be ready for higher rates

5-31-16 US Interest Rate Forecast-trading Economics

 Cool graph from TradingEconomics.com

 

Capital Markets Update

Holding Strong

5-31-16 Total World Index

World Markets are holding up pretty well after an obviously punkie start of the year and after digesting the afore mentioned possible FED rate increase.  Could be a very summer doldrums summer…or not of course .. time will tell !

Have a Great Day!

See you again at the end of June !

John A. Kvale

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
JK Street Cents Logo

 

 

March 2016 Video, Monthly Review, Tax Tip By John Kvale

What a different a month (or two) can make. Here is our March 2016, all new…trendy format Monthly Capital Market Review and last minute tax tips, along with a Video for your viewing and listening pleasure. Hope you are enjoying!

 March 2016 Video

 

 

Final Reminder Tax Tip

As Moto Moto said in Madagascar, these tips are so good we had to say them twice!

Our favorite tax savings ideas that still work for last year (2015 taxes):

  • Itemize your standard tax deduction
  • HSA- Health Savings Account
  • Fund an IRA
  • Simplified Employee Pension – SEP deduction/contribution against non W-2 income (1099)

Tax Fraud Alert

As noted here, last month we had our first incidence of fraud in February. We are now up to 9.5 so far, as we have one incident that we think was fraud, but could not be proven!

Be sure to keep your guard up!

 

Economic Update

PMI Manufacturing Index

PMI  (Definition: The ISM manufacturing composite index indicates overall factory sector trends. The relevance of this indicator is enhanced by the fact that it is available very early in the month and is not subject to revision.) Graph from our friends at Econoday.

Less than 50 is contraction, greater than 50 is growth.

3-31-16 PMI from Edonoday

Employment Situation

While there was a small increase in unemployment claims late in March, the overall employment picture, via hiring, as can be seen below, again from our friends at Econoday, remains steady. It is worth noting, these reports can be volatile.

3-31-16 Employement Situation from Econoday

Capital Markets Update

Updated Support and Resistance

This Graph, included in our Newsletter, shows the updated Support and Resistance lines and levels of the current market.

As mentioned in our Yellen Speaks post, after telling capital market participants that slower rate increases were more likely (late 2015 she told the world to expect four increases, now only two) capital markets smartly broke through the lower upper resistance. Now, can we go to new highs ? Maybe …

Never go all in or all out !

3-30-16 S&P Chart

Oil and Market Correlation Chart

For those that think oil does not affect the sentiment and capital markets, look at this chart from Liz Saunders :

3-31-16 S&P Crude correlation

Sorry for the motor mouth/fingers … there were a lot of moves worth noting, especially very near the end of the month !

Have a Great Day!

See you again at the end of April !

John A. Kvale

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
JK Street Cents Logo