11 August 2018 FT — Articles to Read

11 August 2018


Question: According to MSN:Money, what are 6 money mistakes that can lead to divorce?


China’s trade war with US poses threat to global oil demand, says energy body – Pg. 1

–        A growing US-China trade spat could hurt oil demand growth this year and next if the global economy takes a hit…

–        Saudia Arabia and Russia have been raising oil output in advance of November but that has spurred fears that global spare capacity is at very low levesl

–        The IEA said Saudi Arabia’s production was just below 10.4m b/d, a fall from June and in line with the lower numbers circulated by Saudi officials in the market


US core inflation records fastest rate of increase in a decade – Pg. 2

–        Core inflation, which strips out volatile energy and food prices and is closely followed by the Fed, rose at a year-on-year pace of 2.4% in July, up from 2.3% in June.  That is the fastest annual pace of core inflation since September 2008, and topped market forecasts for 2.3%

–        Growth in headline consumer prices held steady at 2.9% year on year in July from a year ago, …

–        The Fed has raised interest rates twice this year, and is expected next month to pull the trigger on the first of two additional rate rises forecast for the remainder of 2018


Equities – Pg. 5

–        …on August 22, the US stock market will officially have enjoyed its longest-ever bull run

–        US equities have returned more than 400% over the nine years since the financial crisis nadir in March 2009

–        The recent resilience of US stocks might come as something of a surprise.  After all, there are myriad reasons to worry: fears of a trade war; rising US interest rates; political uncertainty around US midterm elections in November; a slowdown in Europe; and questions about the growth prospects of the technology behemoths that have helped power the US equity rally

–        The S&P 500 has clawed back almost all of this spring’s losses and is once again close to a record high.  There are three major, interlinked factors that have helped assuage concerns and propelled US stocks higher again: strong-economic growth, dazzling corporate earnings and a wave of share buybacks

–        US GDP expanded 4.1% in the second quarter, the fastest rate of growth since 2014, and swingeing tax cuts have juiced up corporate profits

–        Almost four-fifths of S&P 500 companies beat earnings expectations in the second quarter – …

–        The Federal Reserve has raised US interest rates seven times since 2015, and another two increases are penciled in this year.  At the same time, the Fed’s balance sheet shrinkage is accelerating.

–        With 90% of companies having reported, US corporate earnings rose 24.6% year on year in the second quarter.  That is the second-biggest gain in nearly eight years after the 24.8% rise in the first quarter,…

–        Profit margins are clocking in at a record 11.8%, and top-line sales growth – which is not flattered by a lower corporate tax – has also been strong.  Revenues for S&P 500 companies rose 9.9% in the three months through June, the best showing since 2011.  Some72% of companies surpassed revenue forecasts, above the five-year average of 58%

–        …Robert Shiller…argues that corporate earnings have been goosed by the Trump administration’s “spending spree economy” rather than a fundamental improvement.  Meanwhile, investors are ignoring the elephant in the White House


Answer: (1) Keepings bank accounts separate; (2) Using separate credit cards; (3) Waiting too long to talk about money; (4) Not talking about money at all; (5) Arguing about money too often ; (6) Keeping financial secrets (Prof Note: Transparency in finances is critical.  Perhaps set a discretionary monthly allowance for each of you.  Over which $$$ must be discussed.  Do not consider it a permission issue but rather a committee approval requirement which we all face in our positions/jobs/corporations)