After Market: A Nice Rebound After Last Week's Weak Showing

July 14, 2014, 10:00 am

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Filed under: Earnings, Market News, Mergers & Acquisitions, Investing

Citigroup grabbed the spotlight Monday -- for reasons both positive and negative -- while Wall Street continued its march higher as earnings season started to kick into high gear.

The Dow Jones industrial average (^DJI) gained 111 points, the Nasdaq composite (^IXIC) rose almost 25 points and the Standard & Poor's 500 index (^GPSC) was up by 9 points.

All eyes were on Citigroup (C) on Monday. The bank agreed to pay $7 billion to settle charges related to mortgages it sold before the financial crisis, and it also beat on earnings. The stock closed 3 percent higher. This week is jam-packed with banks coming out with their results. Bank of America (BAC) and JPMorgan Chase (JPM) were up around 1 percent ahead of releasing their results.

Some acquisition activity boosted other stocks. Pharma company Mylan (MYL) is buying part of Abbott Laboratories' (ABT) business for $5.3 billion in stock. Mylan gained 2 percent and Abbott was higher by more than 1 percent.

Engineering firm URS (URS) is going to be acquired by rival Aecom Technology (ACM) in a deal valued at around $4 billion. The news sent both stocks sharply higher. URS gained 12 percent and Aecom was up 10 percent.

Energy company Whiting Petroleum (WLL) rallied more than 7.5 percent on news it is seeking to buy Kodiak Oil & Gas (KOG). Whiting has been on fire this year. Its stock has risen 36 percent year to date. In other energy M&A news, oilfield services company Weatherford (WFT) International is selling its Venezuelan and Russian assets to Russia's Rosneft. Weatherford was up 2.5 percent.

And a report in an Israeli newspaper that drugmaker Perrigo (PRGO) might be on the auction block sent its stock higher by more than 8.5 percent.

Elsewhere in deal news, British soccer team Manchester United (MANU), which is a publicly traded company in the U.S., rallied more than 4 percent on news that Adidas will be sponsoring the team for 10 years and paying them $130 million a year for the honor. It will be the largest uniform sponsorship deal in history.

Apple (AAPL) got a 1 percent boost from an upgrade at Barclay's. EBay (EBAY) fell half a percent on a downgrade and TripAdvisor (TRIP) dropped less than 1 percent on a downgrade as well. But the downgrade to neutral from Nomura is mainly because the TripAdvisor has had a 25 percent run up since the beginning of the year.

-Produced by Karina Huber.

What to Watch Tuesday:

At 8:30 a.m. Eastern time, the Commerce Department releases retail sales data for June; the Federal Reserve Bank of New York releases its latest survey of manufacturing conditions in New York state; and the Labor Department releases import and export prices for June.
The Commerce Department releases business inventories for May at 10 a.m.

These major companies are due to release quarterly financial statements:

Cintas (CTAS)
Comerica (CMA)
Commerce Bankshares (CBSH)
CSX (CSX)
Goldman Sachs (GS)
J.B. Hunt Transport Services (JBHT)
Johnson & Johnson (JNJ)
JPMorgan Chase (JPM)
Pinnacle Financial Partners (PNFP)
Yahoo (YHOO)

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Financial Planning for Millennials: Yes, You Can Afford It

July 14, 2014, 11:00 pm

≫ Next: Why I Dumped My American Express Platinum Card

≪ Previous: After Market: A Nice Rebound After Last Week's Weak Showing

Filed under: Family Money, Personal Finance, Retirement Plans, Planning, Financial Education

CWCTRN Real estate agent discussing property documents to his clients. Image shot 2012. Exact date unknown. Advice; Agent; Busi — **Alamy**

Wells Fargo recently released a study on millennials and their money, and among its revelations was that 80 percent of Gen Y'ers surveyed* said that seeing the impact of the Great Recession on their elders taught them how to save and survive.

But more than half reported that they were living paycheck to paycheck, and 42 percent said debt was their biggest financial concern. Even though Gen Y understands the importance of saving, they feel like they can't afford to put away as much as they should: 46 percent are saving between 1 percent and 5 percent of their incomes for retirement.

Given all that, you'd expect that millennials would really want some professional financial advice -- and they do. But while they'd like the help of a money pro, most don't feel they can afford it: 55 percent think they don't have enough money to get the assistance they need.

The good news for them is that they're mistaken: While that affordability disconnect may have existed in the past, a new way of providing financial planning advice is gaining popularity. Planners who work on a monthly retainer are good news for millennials.

Why the Financial Services Profession is Changing

Gen Y advisers see that their peers are not being serviced but are asking great financial planning questions (for example, "Should I contribute to a 401(k) or a Roth IRA?").
There's a shift afoot to get away from pushing commissioned products that clients don't actually need.
Advisers want to serve a broader client base, regardless of their accumulated assets.
Advisers are placing greater emphasis on the power of financial planning, rather than focusing solely on investment advice.

How Financial Planners Are Making Advice Affordable

What if you could work with a financial planner for the price of your monthly cell phone bill, would you? A new group called the XY Planning Network is providing fee-only financial planning on a monthly retainer so that you can do just that. These certified financial planners are all geared to help Gen X and Gen Y clients with their money. I'm proud to be a founding member of XYPN.

I work with clients in their 20s and 30s across the country, and I'm 30. Here are some reasons I've noticed why most people prefer to work with a financial planner of the same generation:

Gen Y advisers can directly relate to the needs of Gen Y clients. We are in a similar life stage and often have similar values. For example, I love to travel, and all of my clients value travel as well.
More flexibility in how they work. I work virtually with my clients, and this is ideal for them because it is easier to schedule a meeting after work or on a Saturday. There's no commute, and they don't have to take time off of work.
It's not all about retirement planning. Financial planning for millennials includes budgeting, strategizing around student loans and other debt, building savings, tax planning, buying insurance (or not), choosing company benefits and a whole lot more.

I continue to be impressed by how many millennials have plush emergency funds, are making six-figure incomes, and have paid off thousands of dollars in debt. We have witnessed two major stock market crashes in our lifetime, have seen our parents struggle and/or succeed financially, and ultimately want to make smarter choices with our money (even if it's just to be better with our money than our friends).

*(Survey respondents included 1,639 millennials between age 22 to 33, as well as 1,529 baby boomers age 49 to 59.)

Sophia Bera is a virtual financial planner for millennials and the founder of Gen Y Planning. She is location-independent but calls Minneapolis home. Do you want to be better with your money than 90 percent of your friends? Then sign up for the free Gen Y Planning newsletter.

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Why I Dumped My American Express Platinum Card

July 14, 2014, 11:01 pm

≫ Next: Expected Microsoft Layoffs Could Top 5,800, Report Says

≪ Previous: Financial Planning for Millennials: Yes, You Can Afford It

Filed under: Personal Finance, Credit Cards, Financial Education

Man handing over and paying with an American Express Platinum credit card isolated on a white background — **Martin Carlsson/Alamy**

I remember deliberating whether to get the American Express (AXP) Platinum card for over a year. What drew me to the card was access to most U.S.-based airport lounges, but I couldn't get over the mental hump of shelling out a $450 annual fee for a credit card. Still, after working through the economics, I got the card in 2011. Three years later, I've decided to drop the card and its hefty bill, and here's why.

What Lounge Access?

Access to airport lounges with the Platinum card is not nearly as good as when I signed up. I used to be able to use the American Airlines (AAL), Delta Air Lines (DAL) and US Airways airport lounges. However, within the past year, Platinum cardholders lost access to the American and US Airways lounges and are no longer able to bring complementary guests into Delta lounges. While the Platinum card still gives cardholders Priority Pass lounge access, in my three years as a cardholder, I never was able to use this benefit. American Express claims to be building its own airport lounges with free access for Platinum cardholders, but the only Centurion Lounges so far are in Las Vegas and Dallas.

Subpar Rewards Program

I never did like the Membership Rewards program. First, on the Platinum card, you're only able to earn one Membership Rewards point per dollar spent, which is less than many other credit cards (like the Chase (JPM) Sapphire Preferred card). In addition, I found the redemption value of each Membership Rewards point to be around one cent -- also less than other programs, such as the Starwood (HOT) Preferred Guest or Chase Ultimate Rewards programs.

As a result, during my time with the card, I never used my Platinum card for everyday purchases. It seemed weird to pay $450 for a credit card and not use it (or even carry it around), but it didn't make economic sense for me to use since I could pull out other credit cards and earn two points per dollar spent on most purchases.

$200 Airline Fee Hassle

Each year, the Platinum card agrees to reimburse cardholders up to $200 for incidentals and fees incurred on one airline. Example fees include checked bag fees and food purchases on flights. Because I don't regularly make these types of purchases, I took advantage of this benefit by buying four $50 airline gift cards a year, which I could use on flights that I would have purchased anyway. That was one of the big selling points that allowed me to initially make the card economics work. The problem: Toward the end of my relationship with the Platinum card, I found it to be a pain to track all the airline gift cards that I had accumulated, the balances of the various cards and the rules and restrictions for each airline.

No More Benefits to Reap

Over the last three years, I've basically sucked out all of the benefits that I could from the American Express Platinum card. I registered for Global Entry in my first year and got American Express to reimburse me the $100 signup fee. I've used the $200 airline fee credit each year to buy airline gift cards, and before I canceled the card, I enrolled in the Extended Payment Program to get 10,000 Membership Rewards points. There are really no other big benefits or signup bonuses that I'm eligible for, so all that I see staring in my face is the huge $450 annual fee and worsening benefits.

My Next Steps

Having canceled my American Express Platinum card, I'm going to rely more on my Chase Sapphire Preferred card and American Express Starwood card.

The Chase Sapphire Preferred card allows me to earn two points per dollar spent on restaurants, travel and transportation, which is where I spend most of my money. In addition, the card has no foreign transaction fees, so I can feel free to use it anywhere in the world that accepts Visa (V). The American Express Starwood card allows me to earn one point per dollar spent for most transactions and many more at Starwood properties. In addition, I've found each Starwood point to be worth at least two cents.

Both cards come with annual fees -- the Chase Sapphire Preferred is $95 a year and the American Express Starwood is $65. However, the total is around a third as much as the Platinum card fee of $450, and both cards essentially allow me to earn 2 percent rewards on most purchases. Now that's rich.

Roger Ma is the founder of lifelaidout, a personal finance blog that helps others identify value and save time, money, and energy in their everyday lives.

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Expected Microsoft Layoffs Could Top 5,800, Report Says

July 14, 2014, 11:02 pm

≫ Next: Yellen: Recovery Incomplete, Loose-Money Policy Justified

≪ Previous: Why I Dumped My American Express Platinum Card

Filed under: Company News, Microsoft, Job Market, Layoffs, Computer Industry

Microsoft expected to announce job cuts this week — **Krisztian Bocsi/Bloomberg via Getty Images**

By Supriya Kurane

Microsoft (MSFT) is planning its biggest round of job cuts in five years as the software maker looks to integrate Nokia Oyj's handset unit, Bloomberg reported, citing people with knowledge of the company's plans.

The reductions, expected to be announced as soon as this week, could be in the Nokia unit and the parts of Microsoft that overlap with that business, as well as in marketing and engineering, Bloomberg reported.

Since absorbing the handset business of Nokia this spring, Microsoft has 127,000 employees, far more than rivals Apple (AAPL) and Google (GOOG) Wall Street is expecting Chief Executive Officer Satya Nadella to make some cuts, which would represent Microsoft's first major layoffs since 2009.

The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, the report said.

Some of the job cuts will be in marketing departments for businesses such as the global Xbox team, and among software testers, while other job cuts may result from changes Nadella is making to the engineering organization, Bloomberg reported.

Last week, Nadella circulated a memo to employees promising to "flatten the organization and develop leaner business processes" but deferred any comment on widely expected job cuts at the software company.

Nadella said he would address detailed organizational and financial issues for the company's new financial year, which started at the beginning of this month, when Microsoft reports quarterly results on July 22.

Microsoft couldn't be immediately reached for comment outside regular business hours.

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Yellen: Recovery Incomplete, Loose-Money Policy Justified

July 14, 2014, 11:30 pm

≫ Next: 9 Annoying Hotel Scams and Fees to Watch Out for

≪ Previous: Expected Microsoft Layoffs Could Top 5,800, Report Says

Filed under: Inflation, Unemployment Rate, Economic Recovery, Federal Reserve, Interest Rates

**Susan Walsh/AP**Federal Reserve Chair Janet Yellen

By Howard Schneider and Michael Flaherty

WASHINGTON -- The U.S. economic recovery remains incomplete, with a still-ailing job market and stagnant wages justifying loose monetary policy for the foreseeable future, Federal Reserve Chair Janet Yellen told a Senate committee Tuesday.

In a strong defense of the central bank's current stance, Yellen said early signs of a pickup in inflation aren't enough for the Fed to accelerate its plans for raising interest rates, a move currently expected in the middle of next year.

That could change, with interest rates rising sooner and faster, if data show labor markets improving more quickly than expected, she said.

But as it stands, "although the economy continues to improve, the recovery is not yet complete," Yellen said in semi-annual testimony before the Senate Banking Committee, repeating her focus on lagging labor force participation and weak wage growth as key to any conclusions about the economy's health.

"Too many Americans remain unemployed," Yellen said.

U.S. stock markets dropped slightly after the release of Yellen's testimony and an accompanying monetary policy report, with shares of biotechnology and social media stocks being particularly hard hit after being singled out in the report for their "stretched" valuations.

"These are the sub-industries that have caused a lot of longtime stock watchers to scratch their heads. These companies have relative few earnings, especially in the biotech area," said Kim Forrest, senior equity research analyst with Fort Pitt Capital Group in Pittsburgh.

"I hope she [Yellen] is not surprised by what the market is doing. I'd say she'd like to deflate these bubbles with a little bit of stock talk."

In general, however, the report said current asset and security prices remain in line with "historic norms."

Fed Relatively Upbeat

Yellen presented a broad overview of an economy still in transition from the 2007-2009 economic crisis. In the accompanying report, the Fed said its balance sheet would top out at $4.5 trillion when its bond-buying program ends in October, a sign of how much stimulus the central bank has had to unleash to support the economy.

With another $2.6 trillion held in reserve by banks, the report said it "will not be feasible" for the Fed to rely on the traditional Fed Funds market to manage interest rates -- a judgment implicit in its recent work on new interest rate tools.

Yellen said the economy continues to generate jobs and steady growth, but she added that Fed policymakers currently expect their preferred measure of inflation to stand at between 1.5 percent and 1.75 percent for 2014, short of the central bank's 2 percent target.

The housing market remains weak, Yellen said, and business investment less than hoped.

Fed chiefs are mandated by law to report to Congress twice a year on monetary policy, and the hearing Tuesday was Yellen's second such appearance. Her first turned into a marathon grilling about her philosophy and views of the economy.

The Fed faces a complex agenda as it weans the U.S. economy from the massive stimulus programs put in place to fight the financial crisis.

Economic data has kept Fed policymakers relatively upbeat that the economy will make steady progress towards the central bank's goals.

But there is also the potential for serious division.

Some policymakers worry the Fed is falling behind the curve on rate hikes and that Yellen is taking too much of an impromptu approach to the interest rate decision.

In her prepared testimony, she held firm to her view that low labor force participation and other labor market statistics are evidence of slack that needs to be absorbed by stronger job growth, not just a sign of unavoidable demographic change.

For now, a more dovish approach holds sway at the central bank, with several officials saying they'd tolerate inflation higher than the 2 percent target for a period of time in order to ensure growth is on track, wages are rising, and as many workers as possible have been drawn back into jobs.

Responding to questions from committee members, she said it would be a "mistake" for the Fed to adopt a strict rule for raising interest rates, something advocated by some lawmakers and Fed officials.

-Additional reporting by Rodrigo Campos in New York.

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9 Annoying Hotel Scams and Fees to Watch Out for

July 14, 2014, 11:40 pm

≫ Next: JPMorgan Profit Slips 8% as Securities Trading Income Drops

≪ Previous: Yellen: Recovery Incomplete, Loose-Money Policy Justified

Filed under: Travel, Ripoffs & Scams, Saving

By Bob Sullivan

When you check into a hotel, don't set let scam artists or misbehaving companies check into your wallet.

There are ripoffs, and there are sneaky fees, but to your wallet, they are the same thing. Together, I call them all "gotchas."

The Federal Trade Commission just published a list of three identity theft-related scams. With some scams, the goal is to get a hold of your credit card number for fraud. You should monitor your bank accounts regularly so you can react early if you become a victim. Also, you may want to consider monitoring your credit score and credit reports for signs of fraud. You can check two of your credit scores for free every month on Credit.com and you can get your credit reports for free once a year at AnnualCreditReport.com.

The New York University Center for Hospitality, Tourism and Sports Management says hotels collected a record $2.1 billion in fees last year, up from $1.2 billion a decade ago. No reason to believe this year won't be a record, too.

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JPMorgan Profit Slips 8% as Securities Trading Income Drops

July 15, 2014, 12:28 am

≫ Next: Money Minute: Citigroup Customers Await Big Mortgage Relief

≪ Previous: 9 Annoying Hotel Scams and Fees to Watch Out for

Filed under: JP Morgan Chase, Earnings, Banks, Securities

Earns JPMorgan CHase — **Kathy Willens/AP**

By David Henry and Tanya Agrawal

JPMorgan Chase (JPM), the biggest U.S. bank by assets, said Tuesday that second-quarter profit fell 8 percent after customer stock and bond trading volume dropped and mortgage lending fees plunged.

The results weren't as bad as investors had feared, and the bank's shares rose 4.2 percent to $58.67 in morning trading.

Chief Executive Officer Jamie Dimon said the bank had seen "encouraging signs" across its businesses toward the end of the quarter, including businesses drawing more from credit lines. But the bank's executives also sounded notes of caution, noting that it was "too early to assume that this momentum will continue."

Speaking on a conference call with analysts, Dimon said that companies still aren't stepping up capital spending. On a conference call with reporters, Chief Financial Officer Marianne Lake said the pickup in bond trading revenue that the bank saw in June has not continued through July.

The report is the bank's first since Dimon disclosed that he had throat cancer.

Dimon told reporters Tuesday, "I feel great," and added that he would stay engaged with the business as he underwent treatment. He said for the first time that he was advised to take a few weeks of rest after his eight weeks of treatment.

The bank's net income fell to $5.99 billion, or $1.46 a share, from $6.5 billion, or $1.60 a share, in the same quarter of 2013. Revenue fell 3 percent to $24.45 billion.

Analysts on average had expected earnings of $1.29 a share, according to Thomson Reuters I/B/E/S.

Revenue from fixed-income and equity markets fell 15 percent to $3.5 billion in the quarter ended June 30 compared with the year-earlier quarter, but the drop was less than projected.

Executives had said during the quarter that capital markets revenue was running about 20 percent less than a year earlier, and below expectations at the start of the year.

Goldman Sachs Group (GS), which also reported Tuesday, said quarterly earnings rose 5 percent, powered by its investment and lending business. Income from fixed income, currency and commodities fell 10 percent.

Citigroup (C), which reported Monday, said income from stock and bond trading fell 15 percent, excluding an accounting adjustment -- well below the 20-25 percent fall it had braced the market for in May.

JPMorgan executives have said that institutional investors seem to be shying away from bonds because of a lack of strong opinions about future moves in interest rates and currencies.

Investment banking fees rose 3 percent to $1.8 billion, driven by a 31 percent rise in advisory fees as strong equity markets encouraged deals and capital-raising.

JPMorgan has also been increasing its focus on wealth management, and private banking revenue rose 5 percent to $1.6 billion as client assets rose 15 percent to $2.5 trillion.

Mortgage Lending Drops

JPMorgan, the second largest U.S. mortgage lender after Wells Fargo (WFC), said its profit from mortgage lending fell 38 percent to $709 million, while mortgage application volumes dropped 54 percent to $30.1 billion.

Overall U.S. mortgage lending has fallen for the past 15 months as mortgage rates have risen. Demand for loans was also hit by a weaker spring selling season compared with last year.

Wells Fargo, which reported last Friday, said its mortgage revenue dropped 39 percent in the quarter.

Non-interest expenses fell 3 percent to $15.43 billion.

JPMorgan said total assets at end-June stood at $2.52 trillion, up from $2.48 trillion at the end of March.

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Money Minute: Citigroup Customers Await Big Mortgage Relief

July 15, 2014, 1:35 am

≫ Next: Fresh Data Suggest Economy Firing on All Cylinders

≪ Previous: JPMorgan Profit Slips 8% as Securities Trading Income Drops

Filed under: Technology, Citigroup, Market News, Internet, Telecommunications

If you have a mortgage serviced by Citigroup you could be eligible for some mortgage relief.

Citigroup (C) has agreed to pay $7 billion to settle charges it misled investors about the quality of its mortgages before the financial crisis. Of that amount, $2.5 billion is going to consumers. The money is being doled out in a variety of ways. There will be loan modifications, refinancing available to lower interest rates and assistance on down payments and closing costs for those negatively impacted by Citi. Marketwatch reports roughly 1 million customers will be eligible for some kind of assistance and Citigroup will contact you if you are.

US-BANKING-HOUSING-CITIGROUP — **Timothy A. CLARY, AFP/Getty Images**

The Federal Communications Commission is getting an earful on the issue of "net neutrality." The regulatory body has received more than 677,000 comments about whether broadband companies should be allowed to give preferential treatment to content providers. At issue is whether some sites will be able to transmit their content faster than others. No one seems happy with the current proposal that seeks to enforce net neutrality but has loopholes that would allow for preferential treatment. All seem to agree that Internet freedom is an increasingly important conversation to have.

Stocks rallied on Wall Street on Monday, with the Dow Jones industrial average (^DJI) breaking past its record and then retreating again. By day's end, the Dow was up 111 points, the Nasdaq composite (^IXIC) had picked up 25 and the Standard & Poor's 500 index (^GPSC) had gained 9 points.

Atlantic City is having a string of bad luck. The Trump Plaza Hotel and Casino just announced it is shutting its doors around Sept. 16. That likely means job losses for more than 1,000 employees. This is just the latest establishment to close in the resort town this year. The Atlantic Club Casino Hotel went out of business and fired 1600 workers last January and the Revel Casino Hotel might have to let 3100 employees go next month if it can't find a solution to its bankruptcy problems. The gambling mecca has struggled with competition from other casinos closer to New York City and Philadelphia, which have opened in recent years.

And finally, 3-D printers are going mainstream. MakerBot, one of the first companies to come out with relatively low cost 3-D printers, is teaming up with Home Depot (HD). The retailer has just launched a pilot project in 12 of its stores that seeks to entice more do-it-yourself types through demonstrations that show what makerbots can make. The printers and scanners will be sold online and at Home Depot stores in California, New York and Illinois. But the devices don't come cheap. They retail for $800 to $2,900.

-Produced by Karina Huber.

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Fresh Data Suggest Economy Firing on All Cylinders

July 15, 2014, 1:39 am

≫ Next: Another Disappointing Retail Sales Number at Quarter-End

≪ Previous: Money Minute: Citigroup Customers Await Big Mortgage Relief

Filed under: Retail, Economic Indicators, GDP, Consumer Goods, Manufacturing

By Lucia Mutikani

WASHINGTON -- A gauge of U.S. consumer spending rose solidly in June, in the latest indication that the economy ended the second quarter on a stronger footing.

That momentum appeared to have carried into the third quarter, with another report Tuesday showing factory activity in New York state expanded sharply in July.

"This is not a fragile economy," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. "The consumer continues to play their part in moving the economy forward."

Core sales, which strip out automobiles, gasoline, building materials and food services, increased 0.6 percent last month after rising an upwardly revised 0.2 percent in May, the Commerce Department said.

Core sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported as being flat in May. Economists had expected them to rise 0.5 percent in June.

The report added to signs of the economy's strengthening fundamentals, which could buoy optimism the recovery is on a self-sustaining path, after output contracted sharply in the first quarter.

Federal Reserve Chair Janet Yellen told lawmakers the economy continued to improve, but noted that the recovery wasn't yet complete because of still-high unemployment.

Yellen, however, cautioned the U.S. central bank could raise interest rates sooner and more rapidly than currently envisioned if the labor market continued to improve faster than anticipated by policymakers.

Labor market conditions are firming, with the unemployment rate falling to a near six year-low of 6.1 percent in June and job growth exceeding 200,000 for a fifth straight month.

Prices for U.S. Treasury debt fell on the economic data and Yellen's interest rate comments, while the dollar gained against a basket of currencies. U.S. stocks traded lower.

June's gains and May's upward revision to core retail sales suggested a pickup in consumer spending in the second quarter after growing at its slowest pace in more than four years in the first quarter because of weak healthcare consumption.

Forecasting firm Macroeconomic Advisers raised its second-quarter GDP growth forecast by three-tenths of a percentage point to a 3 percent annual pace. Goldman Sachs (GS) upped its estimate for the quarter by two-tenths to a 3.4 percent rate.

Upbeat Outlook

A surprise drop in receipts for automobiles, however, held overall retail sales to a 0.2 percent increase in June after advancing 0.5 percent the prior month.

"Consumers will likely gain more confidence to spend as the job market improves and summer travel season hits full swing," said Randy Hopper, credit cards vice president at Navy Federal Credit Union in Vienna, Virginia.

"We are optimistic that the second half of the year will deliver stronger sales growth."

From employment to manufacturing, the economy appears to be firing on nearly all cylinders, with even housing regaining its footing after slumping in late 2013 following a run-up in mortgage rates. Growth estimates for the second quarter top a 3 percent annual rate.

In another report, the New York Fed said its Empire State general business conditions index jumped to 25.60 this month, the highest since April 2010, from 19.28 in June.

New orders edged up, while factory employment and shipments surged. There were also signs of inflation pressures, with measures of both prices received and paid by manufacturers rising in July.

Overall retail sales in June were restrained by a 0.3 percent fall in receipts at auto dealerships. The decline is surprising given automakers reported a surge in motor vehicle sales in June.

Auto sales had increased 0.8 percent in May. Excluding autos, sales grew 0.4 percent after rising by the same margin in May. There were increases in sales at non-store retailers, which include online sales, as sales at clothing retailers.

Receipts at sporting goods shops rose as did those at electronics and appliances stores. But sales at building materials and garden equipment suppliers fell 1 percent.

-Additional reporting by Rodrigo Campos in New York.

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Another Disappointing Retail Sales Number at Quarter-End

July 15, 2014, 2:10 am

≫ Next: The Art of Letting Go: Trend Sets Paintings Free, Randomly

≪ Previous: Fresh Data Suggest Economy Firing on All Cylinders

Filed under: Economy

78026699 June turned out to not be a great month for retail sales. The Census Bureau reported that advance monthly sales for retail and food services rose by only 0.2% to $439.9 billion on a seasonally adjusted basis. Bloomberg was calling for a gain of 0.6%.

If you back out auto sales, retail sales in June were up by 0.4%. That is slightly better than the headline data, but unfortunately it is also short of the 0.6% consensus estimate offered up by Bloomberg.

While the number looks small on a month-over-month report, the report did signal that the gain was 4.3% above June 2013 retail sales, with a plus or minus 0.9% range.

The Census Bureau said:

Total sales for the April through June 2014 period were up 4.5 percent (±0.7) from the same period a year ago. The April to May 2014 percent change was revised from +0.3 percent (±0.5) to +0.5 percent (±0.2). Retail trade sales were up 0.3 percent (±0.5) from May 2014, and 4.1 percent (±0.9) above last year. Nonstore retailers were up 8.1 percent (±2.3) from June 2013 and health and personal care stores were up 7.9 percent (±1.9) from last year.

ALSO READ: The 4 States Killing Walmart

Keep in mind that consumer spending makes up close to 70% of the GDP report, and this puts the numbers lower for the second quarter. It is possible that this weak retail sales report is enough to marginally send GDP forecasts a tad lower for the second quarter. An infographic from the Census has been provided below.

Retail Sales June

Filed under: Economy

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The Art of Letting Go: Trend Sets Paintings Free, Randomly

July 15, 2014, 3:00 am

≫ Next: Trim the Cost of Travel Packages -- Savings Experiment

≪ Previous: Another Disappointing Retail Sales Number at Quarter-End

Filed under: Fantastic Freebies, Art, Antiques & Collectibles, How to Save Money, Saving

**Drew Trachtenberg/AOL**Two women at a highway rest stop claim two of Leonard Zatz's paintings. The art was free, given away as part of the Art Abandonment movement.

My wife and I drove last month from our home in New Jersey to Illinois for our son's college graduation (it was wonderful, thank you). We tried to pack very light, leaving plenty of room in our Toyota Camry for our son and his clothes and other junk we'd bring back on the return trip. But we did put seven original acrylic paintings in the trunk to give away to people we didn't know and probably would never even see.

By doing so, we'd be taking part in the fast-growing Art Abandonment movement, which allows people with little or no money for art to acquire original works, while artists (and their friends and relatives) can let their art live.

Here's the backstory of how we joined the movement: Our friend Eleni Zatz Litt lost her father, Leonard, last year at the age of 87. After dealing with all of the legal and financial issues, she tackled a much bigger project -- what to do with nearly 600 paintings he had created and stacked up in his Philadelphia home.

**Drew Trachtenberg/AOL**Eleni Litt shows off one of her father's nearly 600 pieces of art that she's been giving away.

She didn't want to throw them out, but there was no way she and husband, Neil, could keep them in their home in Princeton Junction, New Jersey.

"We had all of this wonderful art," Litt said, "but didn't know what to do with it." So they decided to give it away. One painting at a time.

The first one, she left at the commuter train station less than a mile from her home. Attached was a sheet of paper informing passersby: "It's your lucky day!! You have found FREE ART!!!" along with a description of the Art Abandonment movement and a link to its website. When she went back the next day, it was gone. And she was hooked.

On the Road With Art

So now, back to our trip to the Midwest. We wanted to help our friend out by leaving some of those paintings at highway rest stops along the way.

We placed the first piece near the entrance to a rest stop along the Pennsylvania Turnpike. We were about to do the same at the Blue Mountain stop in central Pennsylvania, but before we could even set it down, two 20-something women came running over, gushing about how much they loved the work.

**Drew Trachtenberg/AOL**The last of our seven abandoned paintings, left at the Noyes Cultural Arts Center in Evanston, Illinois.

This was indeed one woman's lucky day. She couldn't believe that we were just giving it away. One said she was studying painting but didn't have enough money to buy anything. She was literally jumping up and down with excitement as though she had just won the lottery. Her friend said she loved the art as well, so the four of us went back to the car and pulled out another piece to give away.

My wife and I thought: This is exactly how this is supposed to work. Let the art find a home where it's valued, where the new owner can revel in owning an original piece of art, even if they don't have the money to buy it.

This Art Abandonment project isn't about the value of art, but rather the love of art. You can spend spectacular sums on art (the "Balloon Dog [Orange]" by Jeff Koons recently sold at a Christie's auction for $142.4 million), or you can find paintings at a highway rest stop. In addition to the Art Abandonment project, other peer-to-peer art swaps and art meet-ups are popping up across the country.

We left other pieces in Ohio, Indiana and at the Noyes Cultural Arts Center in Evanston.

So far since March, Litt has abandoned about 250 of her father's paintings. She has a Facebook page and an email account so that people who pick up the paintings can tell their stories. One young woman wrote to say that she had just moved to this country and had only bare walls in her first apartment -- until she found one of the paintings.

"My dad so wanted his art to go out in the world," says Litt. "It's his love letter to the world."

Leonard Zatz was a dabbler in art during his careers in education and business. Then later in life, especially after illness limited his ability to get around, his art output became prolific.

Litt describes her father's style as whimsical -- a little bit of German expressionism meshed with influences of Gauguin and Matisse -- what she calls "delicatessen style, with vibrant energy and bold colors." She says her effort to redistribute the art is "like a letter in a bottle. You don't know where it's going to go. That's the whimsy of it."

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Trim the Cost of Travel Packages -- Savings Experiment

July 15, 2014, 3:00 am

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Filed under: Savings Experiment, Travel Industry

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When it comes to buying travel packages, sites like Expedia and Orbitz may be popular, but there's another place where you can get deep vacation discounts: Costco.

Costco Travel not only offers surprisingly competitive pricing on hotels, cruises and resort packages, it takes it a step further by throwing in tons of money-saving perks in their deals.

Let's say you book a cruise through the site. In addition to a low price, you'll automatically get something called shipboard credits, too. These credits are like money and can be used for nearly any chargeable item or service on the ship, such as drinks, shore excursions, spa treatments and more.

For those of you who prefer to stay on land, Costco Travel also offers packages that let you earn resort credits. The benefits can vary depending on how long and where you stay, but some perks include food and beverage credits, free high-speed internet and, in some instances, gift cards with values of up to $2,500.

On top of that, Costco Travel has hotel discounts, too. With each booking, you'll be entitled to 10 percent off of all Hyatt locations in the U.S. and Canada, and 20 percent off of all Best Western hotels worldwide.

There is one catch, though. Costco Travel benefits are only available to Costco members, so if you've been on the fence about joining, this might be the time to consider it. Ready to relax? Use these tips to get the most out of your next vacation.

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Reynolds to Buy Tobacco Rival Lorillard for $25 Billion

July 15, 2014, 3:04 am

≫ Next: It's Time to Talk About Taboo Money Topics with Your Kids

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Filed under: Company News, Mergers & Acquisitions, Industry News, Consumer Goods, Tobacco

Tobacco Giant Reynolds American In Talks To Purchase Lorillard, Maker Of Newport Cigarettes — **Justin Sullivan/Getty Images**Newport is Lorillard's flagship cigarette brand.

By MICHAEL FELBERBAUM

RICHMOND, Va. -- Cigarette-maker Reynolds American (RAI) is planning to buy rival Lorillard (LO) for about $25 billion in a deal to combine two of the nation's oldest and biggest tobacco companies.

The deal announced Tuesday would create a formidable No. 2 to rival Altria Group (MO), owner of Philip Morris USA, and will likely face scrutiny from regulators. It also could spur a wave of consolidation in the tobacco business, shrink factories and workforces, and push prices for cigarettes higher even as smokers buy fewer of them. The companies value the deal, which is expected to close in the first half of 2015, at about $27 billion including debt.

The companies said they will sell the Kool, Salem, Winston, Maverick and Blu eCigs brands to Imperial Tobacco Group for $7.1 billion to ease regulatory concerns about competition, tripling that company's share of the U.S. cigarette market. Imperial also will acquire Lorillard's manufacturing and research and development facilities in Greensboro, North Carolina, and about 2,900 employees. Imperial owns Fort Lauderdale, Florida-based Commonwealth-Altadis, maker of USA Gold cigarettes.

The move allows Reynolds to keep its Camel, Pall Mall and Natural American Spirit brands and acquire Lorillard's flagship Newport brand, giving it a 34 percent share of the U.S. retail market. It also will give it a dominant place in the still-growing menthol cigarette segment, led by Newport's 37 percent retail share.

"We're very confident that this portfolio of strong, iconic brands lives together very well," Reynolds CEO Susan Cameron said in a conference call with investors.

Lorillard shareholders would receive $50.50 in cash for each share and 0.2909 of a share in Reynolds stock at closing, a deal that's valued by the companies at $68.88 per share.

The deal comes as demand for traditional cigarettes declines in the face of tax increases, smoking bans, health concerns and social stigma. U.S. cigarette sales fell about 2.6 percent last year to 285 billion cigarettes, according to market researcher Euromonitor International.

But raising prices and cutting business costs has kept the industry handsomely and reliably profitable. The companies also have cut costs to keep profits up, and the larger scale of a combined company could make future cost-cutting easier. Reynolds expects to save about $800 million a year in costs.

The next step for tobacco companies is an increased focus on cigarette alternatives -- such as electronic cigarettes, cigars and smokeless tobacco -- for sales growth.

In addition to its cigarette brands, Reynolds, based in Winston-Salem, North Carolina, markets Grizzly and Kodiak smokeless tobacco brands and also expanded its Vuse brand e-cigarette nationally last month. It has about 5,200 full-time employees and produces its cigarettes at its 2 million-square-foot Tobaccoville, North Carolina, plant. Reynolds' profit rose 35 percent to $1.72 billion last year on revenue of $8.24 billion, excluding excise taxes.

Lorillard, which was founded before the Revolutionary War and is the oldest continuously operating U.S. tobacco company, was spun off from Loews Corp. (L) in 2008. It became the first major tobacco company to jump into the e-cigarette market when it acquired the Blu e-cigarette brand in 2012. Blu now accounts for almost half of all e-cigarettes sold. Lorillard's profit rose 8.5 percent to $1.19 billion last year on revenue of $4.97 billion, excluding excise taxes.

The combined company would challenge Richmond, Virginia-based Altria, which holds about half of the retail cigarette market, led by its top-selling Marlboro brand. It also sells Black & Mild cigars, Copenhagen and Skoal smokeless tobacco and is expanding MarkTen e-cigarette brand nationally.

Altria, Reynolds American and Lorillard all sell cigarettes only in the U.S. Other companies sell their brands overseas.

The companies said British American Tobacco, which makes Kent and Dunhill cigarettes overseas will maintain its 42 percent stake in Reynolds, and Lorillard shareholders will hold a 15 percent stake. Reynolds and British American Tobacco also agreed to share technology related to the development and commercialization of next-generation tobacco products, including heat-not-burn cigarettes and other nicotine-delivery products.

Lorillard's stock fell $3.62 to $63.60 in premarket trading. Reynolds' stock fell $1.58 to $61.60.

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It's Time to Talk About Taboo Money Topics with Your Kids

July 15, 2014, 3:20 am

≫ Next: Yellen Testimony Signals Accommodative Policy and Low Rates to Continue

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Filed under: Investing Basics, Family Money, Personal Finance

C4WD2P USA, New Jersey, Jersey City, Mother giving money to teenage daughter (14-15). Image shot 2011. Exact date unknown. stan — **Alamy**

While a recent survey by Citi (C) shows that nine out of 10 parents teach their kids about money and 59 percent say they talk to their kids about personal finance, there are still a few financial topics that parents prefer not to discuss.

"Our survey findings showed that most parents have begun discussing finances with their children before age 13, and nearly half of respondents said that sensitive financial topics are not off-limits for conversations with their children," says Linda Descano, a personal finance expert with Citi. "However, the topics that most respondents found off-limits were 'the amount of money I make' (with 28 percent believing this was off-limits), 'the amount of savings we have' (27 percent) and 'the amount of debt we have' (26 percent)."

The study also found that 13 percent of people don't want to talk about the value of their home with their kids, and 10 percent don't want their kids to know the cost of their school's tuition. Many parents mistakenly think it's better not to discuss family financial issues with their children, says Ric Runestad, owner of Runestad Financial in Fort Wayne, Indiana. He says reasons for believing money is a taboo topic include:

Some parents don't want to trouble their kids with adult concerns about their income, debt and savings.
Some parents are afraid their kids won't respect them if they don't make much money and have a lot of debt.
Some parents with a high income and a lot of savings fear their children may become more demanding for material objects knowing their parents can easily afford them.

"A concern for all parents is that their children may not be discerning about whom they discuss family financial issues with and that they might share information with people the parents would rather not want to know about their financial matters," says Runestad.

Avoiding the Issue

According to an Ameriprise (AMP) study, "Money Across Generations," 35 percent of adults say that discussing money and finances with their family members is likely to cause a disagreement.

"If this is the case with your partner or other adults in your family, save these conversations for times when your younger children are not around," says Suzanna de Baca, vice president of wealth strategies at Ameriprise. "It's important to have financial conversations with children of all ages to provide opportunities for teaching and learning, but young children can be especially sensitive to arguments and it may cause them to view all financial discussions with negativity as they age."

In the same study, 70 percent of American adults said that growing up, their parents rarely or never talked about how much money the family had, but 75 percent said their parents regularly or occasionally talked about the importance of saving money.

"If you're hesitant to discuss how much you [and your spouse] make in income each year, that's OK, but don't avoid all financial conversations," says de Baca. "Talking about the value of saving and making prudent financial decisions with your children can have a lasting impact on their financial attitudes."

Overcoming the Taboo

Financial experts say talking about money is one of the most important ways kids can learn how to handle their own finances as they become adults, particularly because financial literacy has yet to become a standard part of every child's education.

"Part of being a good role model includes being open about money (especially as kids get older) and not being afraid to share your money mistakes, in hopes that they won't repeat them," says Descano. "This is obviously a very personal decision as a parent, but making your child aware of the financial context of the things they have and being open with them about the financial realities of life is really important in raising financially-savvy children, especially as kids enter high school."

Runestad says that discussions about financial decision-making should be frequent, but he says any discussion about family finances should start with an explanation that the information isn't to be shared with anyone outside the immediate family.

"When parents should start including the children in discussions of family finance will be driven in part by the children themselves," says Runestad. "The children should be responsible enough to handle the information and its confidentiality. They must have shown the maturity to process this information."

Tips for Talking to Kids, From de Baca:

Know your child's level of financial maturity and asses what's relevant for them to know about your household finances. If you're not comfortable telling them how much you earn (whether you're financially comfortable or not) or that you're struggling to make ends meet, don't feel obligated to share with them. However, it's important to have an age-appropriate conversation with your children if a financial event has caused you to change your lifestyle significantly or if you're trying to teach them about responsibilities that come with being financially fortunate.
Keep in mind that kids learn by getting involved. Whether you're planning a family vacation or budgeting for groceries, consider involving your children. Asking for their input will engage them and give them a sense of financial responsibility. Have them plan a family activity within a certain price range or compare prices at the store.
If there is tension about money in your household, make sure you frame the resulting conversations in a productive way. For example, if you're feeling stretched by your mortgage payments, rather than lamenting about money woes or stressing in front of your children, loop them in on how you make decisions between your financial obligations and other purchases that are considered "wants." Demonstrate to them what percentage of your income you're contributing to savings and how you budget the rest.

Talking about money can be as tough as talking about any other taboo subject, but sharing your financial experience can smooth the way for your kids as they get older.

Motley Fool contributor Michele Lerner has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days.

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Yellen Testimony Signals Accommodative Policy and Low Rates to Continue

July 15, 2014, 3:35 am

≫ Next: Consumer Electronics Sales Going to All-Time Highs in 2014 and 2015

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Filed under: Economy

110898078 Fed Chair Janet Yellen is delivering her semiannual Monetary Policy Report in front of Congress on Tuesday. The testimony is before the Committee on Banking, Housing and Urban Affairs of the Senate. Her speech likely will be repeated in front of the House committee, and market watchers look more at answers in the Q&A session.

Yellen discussed the current economic situation and outlook, as well as monetary policy, closing with financial stability. Yellen's opening remarks indicated that the economy is continuing to make progress toward the Federal Reserve's objectives of maximum employment and price stability.

The financial stability area does contain key sector comments that are overvalued — coming soon in an expanded story.

Before you get too bogged down in details here, be sure to consider that Yellen's stance is that she is in no hurry to raise interest rates. This also implies that the rate hike cycle will not be as drastic as rate hike cycles in the past. That is the belief as of now at any rate.

Yellen said on the labor market:

In the labor market, gains in total nonfarm payroll employment averaged about 230,000 per month over the first half of this year, a somewhat stronger pace than in 2013 and enough to bring the total increase in jobs during the economic recovery thus far to more than 9 million. The unemployment rate has fallen nearly 1-1/2 percentage points over the past year and stood at 6.1 percent in June, down about 4 percentage points from its peak. Broader measures of labor utilization have also registered notable improvements over the past year.

ALSO READ: Ten States With the Slowest Growing Economies

Yellen said on gross domestic product:

Real gross domestic product is estimated to have declined sharply in the first quarter. The decline appears to have resulted mostly from transitory factors, and a number of recent indicators of production and spending suggest that growth rebounded in the second quarter, but this bears close watching. The housing sector, however, has shown little recent progress. While this sector has recovered notably from its earlier trough, housing activity leveled off in the wake of last year's increase in mortgage rates, and readings this year have, overall, continued to be disappointing.

Yellen's takeaway is that the economic recovery is not yet complete: unemployment remains above the Fed's longer-run normal level, labor force participation is weaker than the unemployment rate indicates, and other indications show that significant slack remains in labor markets.

Yellen also addressed inflation. She said:

Inflation has moved up in recent months but remains below the FOMC's 2 percent objective for inflation over the longer run. The personal consumption expenditures (PCE) price index increased 1.8 percent over the 12 months through May. Pressures on food and energy prices account for some of the increase in PCE price inflation. Core inflation, which excludes food and energy prices, rose 1.5 percent. Most Committee participants project that both total and core inflation will be between 1-1/2 and 1-3/4 percent for this year as a whole ... we expect inflation to move back toward our 2 percent objective over coming years.

Another issue to consider is that Yellen and other Federal Open Market Committee participants continue to expect economic expansion at a moderate pace over the next several years. This will be supported by accommodative monetary policy and what she called a waning drag from fiscal policy.

FULL TESTIMONY

Filed under: Economy

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Consumer Electronics Sales Going to All-Time Highs in 2014 and 2015

July 15, 2014, 4:20 am

≫ Next: No Inflation Seen in Import and Export Prices

≪ Previous: Yellen Testimony Signals Accommodative Policy and Low Rates to Continue

Filed under: Investing

Apple mobile/touch devices The Consumer Electronics Association (CEA) is now looking for 2014 to be an all-time record high for global consumer electronics. Its semi-annual sales forecasts signaling that consumer electronics revenues will be up by 2% to $211.3 billion in 2014.

The big growth driver is connected devices, and the report covers more than 100 consumer electronics products. Tuesday's update is in line with the CEA forecast from January, but slightly adjusted after 2013 revenue growth turned out to be better than initially expected.

Growth is expected to be seen yet again in 2015, albeit slowing to 1.2%. The biggest driver is the so-called emerging category growth, which is projected to grow by a whopping 242% in 2014 and another 108% in 2015. This category includes 3D printers, health and fitness devices, smart watches, ultra-HD TV displays and now includes smart thermostats. The emerging product categories still represent less than 3% of the entire consumer electronics industry revenue, but that will likely reach $5 billion this year, after having been too small to track in prior years.

In video, innovations in the television category are sales drivers. The report said:

Despite a steady decline in average wholesale prices, TV sales remain critical to the industry's overall bottom line with total TV sets and displays projected to reach $18.4 billion in 2014, down five percent from 2013. ... Unit shipments of Ultra HD displays are expected to reach 800,000 in 2014, earning $1.9 billion in revenue, a 517 percent increase over the 2013 total. Revenue from Ultra HD displays is projected to exceed $5 billion in 2015 ...

ALSO READ: America's Most Profitable Products

Other data on LCD TV's, smartphones and tablet growth will be key drivers in 2014. LCD TVs are expected to be 94% of all digital display sets sold in 2014 — 36.7 million units are expected to ship to dealers in 2014 for some $17.3 billion in revenue. Sales of mobile connected devices like smartphones and tablets are expected to remain the top two revenue drivers of growth in 2014, representing 35.1% of total industry revenues in 2014. Subcategory expectations are as follows:

Smartphone shipments should reach 163.5 million in 2014, up 8%t from 2013.
Tablet unit sales should reach 80.4 million units in 2014, up 4% from 2013; but revenues for tablets are expected to be down 3% to $25.6 billion.

Audio (headphones, Bluetooth wireless speakers and soundbars) and other categories will have the following growth numbers with gains shown as 2014 versus 2013:

Headphones are expected to sell 75.9 million units, earning $1.4 billion in revenue, up 20%.
Bluetooth wireless speakers are expected to generate $650 million in total revenue in 2014, up 69%.
Soundbars are projected to reach $611 million in revenue, up 17%.
Automotive electronics rising with new vehicle sales in 2014, with factory-installed systems reaching $11 billion in revenue, up 20%.
Gaming consoles are projected to drive revenues of $4.8 billion in 2014, along with a 35% increase in unit shipments.

Filed under: Consumer Electronics

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No Inflation Seen in Import and Export Prices

July 15, 2014, 4:45 am

≫ Next: 15 Easy Ways to Cut Health Care Costs Without Cutting Quality

≪ Previous: Consumer Electronics Sales Going to All-Time Highs in 2014 and 2015

Filed under: Economy

cargo ship Inflation in international trade will be nothing to scare the Federal Reserve into a major inflationary panic. June's import and export prices were more than just tame. Export prices were down by 0.4% on a month-over-month basis. Bloomberg was calling for a gain of 0.2%. Those same export prices annually were up by only 0.2%.

Import prices rose by only 0.1% on a month-over-month basis, also under the 0.4% consensus estimate from Bloomberg. The annual import prices were up only 1.2%.

The decline in import prices included a 1.7% drop for food, feeds and beverages. Coal and natural gas were lower as well. Imported petroleum prices were up by 1.4% in June, but we have already seen crude oil drop in July back to around $100 per barrel. Export prices included a 1.8% drop in agricultural prices. Almost all other categories showed declines.

As a reminder, the Federal Reserve's inflation target is 2.0%, with an upper-end allowance of about 2.5%. Inflation has looked higher recently, but still under the Fed's target.

Janet Yellen's subsequent testimony in front of the Senate on Tuesday echoed that the inflation picture is one that remains tame — even if Yellen and Fed members expect inflation to eventually rise back to the Fed's 2% target.

ALSO READ: The Best (and Worst) States to Be Unemployed

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15 Easy Ways to Cut Health Care Costs Without Cutting Quality

July 15, 2014, 5:41 am

≫ Next: House Votes to Extend Moratorium on Internet Taxes

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Filed under: Health Care, Personal Finance, How to Save Money, Saving

Health care is a hot topic these days, and there have been plenty of changes in how it works in this country in recent years. But one fact remains a constant: People want to get their money's worth from their medical spending. We asked several health care experts for their best advice on how you can get the maximum care for a minimum of your hard-earned cash. Here's what they told us:

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House Votes to Extend Moratorium on Internet Taxes

July 15, 2014, 6:59 am

≫ Next: Why Producer Prices Could Show Inflationary Pressures

≪ Previous: 15 Easy Ways to Cut Health Care Costs Without Cutting Quality

Filed under: Personal Finance, Internet, Public Utilities, Sales Tax, Financial Education

Hands of a man using PC tablet, from low angle — **Getty Images**

By STEPHEN OHLEMACHER

WASHINGTON -- The House has voted to make permanent a moratorium that prevents state and local governments from taxing access to the Internet.

Under current law, the moratorium expires Nov. 1, exposing Internet users to the same kind of connection fees that often show up on telephone bills.

The moratorium was first enacted in 1998. State and local governments that already had Internet taxes were allowed to keep them under the current moratorium. But under the bill passed Tuesday, those jurisdictions would no longer be able to collect the taxes.

The House passed the bill Tuesday by voice vote, which means members didn't record whether they were in favor or against the bill.

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Why Producer Prices Could Show Inflationary Pressures

July 15, 2014, 7:37 am

≫ Next: After Market: Yellen Talks of Frothiness, Stocks Head Downward

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Filed under: Economy

On Wednesday morning the markets will have to deal with yet another reading on inflation — albeit at the wholesale level. The US Labor Department will report its reading for the Producer Price Index (PPI) for the month of June. It would not be too surprising to see the numbers come in a little hotter than expected because of agriculture and energy price trends in June. Still, this may be temporary even if it is hot. Another thing to consider is that this may not mean that the Fed is getting ready to hit the panic alarm button if the reading is higher than expected.

Investors use the PPI as a precursor of consumer prices because rising costs of production can bring higher prices at the consumer level. It is a chain that is obvious, but there are frequently some exceptions.

Dow Jones is calling for the headline Producer Price Index to be up by 0.3% in June, up from a -0.2% reading in May. Bloomberg is calling for a 0.3% gain in the headline PPI. Dow Jones is calling for the PP reading on an ex-food and energy basis, the so-called core PPI, to be up by 0.2% in June from a -0.1% drop in May. Bloomberg is calling for a 0.2% gain in the core PPI reading.

We would again remind readers that the PPI calculation has been changed to measure the PPI for Final Demand. The headline index measures changes in prices for goods and services, and construction, sold to final demand - capital investment, exports, government purchases, and personal consumption.

The change in how the data is presented still has many investors and traders react to the release. All in all, the intent is to have a more focused reading on inflation at the producer (wholesale) level. Traders operate under the belief that inflation does not directly appear at the consumer level until you see two or three hotter producer price reports.

Be advised that traders and investors may look past the number if it is not too much above expectations. Oil has come back down to the $100 per barrel mark since the end of June, and the runaway prices in food have not been in the headlines as much. Also, the preliminary data for June on imports and exports did not indicate any major inflationary pressures at all.

ALSO READ: Yellen Identifies Stock & Bond Bubble Segments

Also, keep in mind that Janet Yellen likely had access to preliminary data on the inflation front before her Senate testimony was given on Tuesday morning.

Filed under: Economy

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