2 February 2019 FT — Articles to Read

2 February 2019


Question: According to MSN: Money, what are nine (9) legal tax shelters to protect your money?


US job market defies worries over shutdown – Pg. 1

–        American employers added 304,000 jobs in January despite the month-long US government shutdown, the first major indicator to suggest the world’s biggest economy was largely unaffected by the bitter Washington stand-off


Strong US jobs data run counter to rate expectations – Pg. 2

–        The unemployment rate ticked up a tenth of a percentage point to 4%, partly because fo the temporary effect of the federal government shutdown, which kept some government employees unpaid and at home

–        The yield on the benchmark 10-year US Treasury was 5.67bps higher at 2.686%.

–        Average earnings rose 3.2% year-on-year in January


Fund managers count cost of big squeeze on fees – Pg. 11

–        As a whole, US-listed asset managers saw 1% trimmed off their stocks this week, even as the S&P 500 climbed back to its early-December level

–        Global equity markets suffered their worst quarter in seven years in the last three months of 2018 with the US stock market alone suffering its worst December since 1931

–        Shares in the fund managers lost 26% over the year – the worst annual decline since the financial crisis

–        Investors are growing increasingly skittish that fund managers can adapt to this radically changed environment.  Last year, passive equity funds sucked in another $472bn while active ones shed $488bn…

–        Fidelity sent shockwaves through the industry last summer after launching a zero-free index fund to gain market share


Fed at early stages of pivot towards next easing cycle – Pg. 16

–        The dollar’s status as the world’s reserve currency and the vast US government bond market ensures the Federal Reserve’s status as the dominant central bank

–        Many investors still pin their hopes on Beijing stimulating economic activity this year, but do so as China is enduring a credit crunch and trying to prevent a trade war with Washington

–        …the Fed faces a US economy experiencing signs of late-cycle weakness, especially in housing

–        US stocks may have enjoyed their best January since 1987, but the premium investors are demanding to buy credit has widened sharply and remains near a level seen in 2016

–        The US bond market is doing more than telling us the Fed has just paused; it’s suggesting the central bank is at the very early stages of a pivot towards the next easing cycle.  This week, yields on the two- and five-year notes dipped below 2.50%, the upper band of the current overnight fed funds rate


Answer: (1) Set up a retirement account; (2) Buy a home; (3) Protect your capital gains; (4) Open a health savings account; (5) Become an Angel Investor; (6) Use the Child Tax Credit; (7) Workplace Benefits; (8) College Savings Plans; (9) Owning a Business