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- 06/09/15--03:13: _Big IPOs to Keep an...
- 06/09/15--04:00: _Extend The Life of ...
- 06/09/15--05:40: _HSBC Slashes Jobs a...
- 06/09/15--06:27: _Pricing Woes Sends ...
- 06/09/15--06:53: _Apple Music Brings ...
- 06/09/15--09:46: _Market Wrap: Stocks...
- 06/09/15--22:00: _Robo-Advisers Can R...
- 06/09/15--22:00: _18 Ways to Save $10...
- 06/09/15--22:00: _10 Best U.S. Cities...
- 06/09/15--22:00: _What Young American...
- 06/09/15--22:00: _We Can't Stop Borro...
- 06/09/15--22:00: _Dos and Don'ts for ...
- 06/10/15--04:11: _Airline Group's Ide...
- 06/10/15--04:56: _The Big Cover-Up Ab...
- 06/10/15--06:01: _Why Lower Gas Price...
- 06/10/15--07:03: _U.S. Budget Deficit...
- 06/10/15--07:38: _'Throwing Shade': T...
- 06/10/15--09:55: _Market Wrap: Wall S...
- 06/10/15--22:00: _Where Have All the ...
- 06/10/15--22:00: _Middle-Aged MTV Gen...
- 06/09/15--03:13: Big IPOs to Keep an Eye Out for Later This Year
- 06/09/15--04:00: Extend The Life of Big Ticket Purchases -- Savings Experiment
- 06/09/15--05:40: HSBC Slashes Jobs as It Shifts Focus Further to Asian Roots
- 06/09/15--06:27: Pricing Woes Sends Airlines Stocks Lower
- 06/09/15--06:53: Apple Music Brings Change to Streaming, but Is It Enough?
- 06/09/15--09:46: Market Wrap: Stocks End Flat; S&P Snaps 3-Day Losing Streak
- The Mortgage Bankers Association reports weekly mortgage applications at 7 a.m. Eastern time.
- The Treasury Department releases the federal budget for May at 2 p.m.
- Men's Wearhouse (MW) and Krispy Kreme Doughnuts (KKD) release quarterly financial results after U.S. stock markets close.
- 06/09/15--22:00: Robo-Advisers Can Reduce the Cost of Investing
- Demographics: Investors of all ages are using robo-advisers, but not surprisingly, they are especially popular among millennials and Generation Xers who grew up with technology and would feel just as comfortable firing off an email or texting as they do talking to a human being.
- Lower account minimums: Furthermore, most wealth management firms require investors to have a minimum of $100,000 or more in investable assets. Robo-advisers have investment minimums in the low four-digit numbers; some have none. "The traditional investment advisory accounts' minimum of $100,000 puts [traditional] advisers out of reach for a lot of investors," says Larrabee. "Robo-advisers are stepping up to fill that void."
- Lower fees: Last but not least, robo-advisers are inexpensive. While traditional wealth management services charge 1 percent of assets under management or more, the typical fee charged by a robo-adviser is 25 basis points or lower, depending on account size.
- 06/09/15--22:00: 18 Ways to Save $100 This Week
- 06/09/15--22:00: 10 Best U.S. Cities for Budget-Friendly Summer Travel
- 06/09/15--22:00: What Young Americans Should Look For In a Heath Care Plan
- Measure your current health. Do you get sick a lot? "If, for example, you're a teacher surrounded by germs or have a high-stress job that impacts your health, you might consider a lower-deductible plan so you're not paying for every visit to the doctor or trip to the pharmacy," Gordon says.
- Evaluate your everyday habits. Do you visit the doctor often, whether you're sick or not? "If not, a high-deductible plan could work for you, because you only pay when you actually seek out medical treatment," he adds.
- Weigh whether you're high-risk. Do you live an active lifestyle? Do you snowboard? Do CrossFit? "If chances are high you'll break a bone or otherwise get injured, you might be paying more for hospital bills out of pocket with a high-deductible plan -- consider a low-deductible option," Gordon says.
- 06/09/15--22:00: We Can't Stop Borrowing: Consumer Debt Soars $201 Billion
- Auto loans, up $93 billion
- Student loans, up $78 billion
- Credit cards, up $25 billion
- 06/09/15--22:00: Dos and Don'ts for Your Final Working Year Before Retiring
- 06/10/15--04:11: Airline Group's Idea Does Little to Help Fee-Burdened Flyers
- 06/10/15--04:56: The Big Cover-Up About Lost U.S. Manufacturing Jobs
- On Chinese labor: Chinese wages, while rising rapidly, are still estimated to be just 12 percent of average U.S. wages in 2015.
- On high global shipping costs: They're back to normal after falling by 93 percent in a six-month period in 2009.
- On the shale gas boom: That low-cost alternative to oil and coal has had a minor impact only on energy-intensive industries, such as petrochemicals and drilling operations.
- On currency valuation fixing the trade deficit: The dollar has risen sharply, yet our trade deficit persists. "We've consistently run a deficit since 1975, and we're no closer to seeing exports get anywhere near our imports," Nager said. "The idea that we can just wait it out is pretty dangerous."
- On U.S. productivity restoring jobs: Productivity isn't increasing faster than that of other industrialized countries, and it is growing much slower than China and South Korea.
- 06/10/15--06:01: Why Lower Gas Prices Really Haven't Helped Much
- 06/10/15--07:03: U.S. Budget Deficit Drops to $82.4 Billion in May
- 06/10/15--07:38: 'Throwing Shade': Taco Bell Execs Bone Up on Youth Lingo
- 06/10/15--09:55: Market Wrap: Wall Street Gains on Optimism About Greece
- At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases retail sales data for May.
- At 10 a.m., Freddie Mac releases weekly mortgage rates, and the Commerce Department releases business inventories for April.
- Retailer Restoration Hardware (RHI) reports quarterly financial results after U.S. stock markets close.
- 06/10/15--22:00: Where Have All the Union Voters Gone?
- 06/10/15--22:00: Middle-Aged MTV Generation Faces Retirement Wake-Up Call
But judged on its own merits, 2015 has actually been rather lively. According to data compiled by IPO specialist Renaissance Capital, so far 68 IPOs have been priced, with total proceeds raised of over $12 billion.
And some of these new stocks are from very familiar companies -- Web services provider GoDaddy (GDDY), trendy hamburger chain Shake Shack (SHAK) and online crafts and hobbies portal Etsy (ETSY) have all hit the exchanges this year.
Several other big names are primed to make their market debuts by the time we drink New Year's Champagne. Here's a look at three issues that are sure to get plenty of attention.
This well-known electronic payments system is getting ready for what is to be its second IPO. The first was in 2002, but PayPal didn't last long as an independent, publicly traded company. Auction powerhouse eBay (EBAY) snapped it up for a cool $1.5 billion and has operated it as a subsidiary ever since.
That was a good move. PayPal is the engine driving eBay's growth. In Q1 2015 the division saw its net revenue rise by 14 percent on a year-over-year basis, while the top line of the marketplace segment (i.e., the auctions and sales eBay is known for) declined by 4 percent.
With that kind of performance, it was perhaps inevitable that investors would demand that PayPal be spun off into an independent company (in order to theoretically be freed from the drag of marketplace's lackluster growth). Management is heeding the call, and once again PayPal is to become a standalone company.
In its latest public communication on the subject, the subsidiary didn't provide a more specific time frame for its IPO than "the second half of this year." It did reveal that it'll have the same ticker symbol -- PYPL -- and trade on the same exchange -- the Nasdaq -- as it did during its brief, publicly traded life in 2002.
This maker of a range of activity trackers is perfectly poised to take advantage of the high popularity of these products with its upcoming IPO.
On the back of its successful offerings, which include the Flex, Charge and Surge, the company's revenue has ballooned lately. Its $745 million in revenue for fiscal 2014 was a whopping 175 percent higher than the previous year's figure.
That's not all that unusual for a middle-stage, tech-slanting company, but a bottom-line profit is. Fitbit netted one amounting to nearly $132 million last year.
Several financial heavyweights like those numbers. Big-time investment banks Morgan Stanley (MS), Bank of America (BAC) Merrill Lynch and Deutsche Bank (DB) Securities are lead-managing the firm's IPO.
The issue has been filed with the Securities and Exchange, but the company hasn't yet specified how many shares it'll sell, what price they might be listed at, or the IPO date. Fitbit did say it intends to list on the New York Stock Exchange under the ticker symbol FIT. In its S-1 filing FitBit says its mission is to "[help] people lead healthier, more active lives by empowering them with data, inspiration, and guidance to reach their goals." As of of March 31, 2015, it had sold more than 20.8 million devices.
Fogo de Chao
Another hot area on the stock market is the restaurant sector, so the IPO of this chain of Brazilian steak houses seems well-timed.
Food service IPOs are becoming more plentiful than a sack of french fries because some restaurant stocks have performed spectacularly after debuting on the market.
The model here is Tex-Mex chain Chipotle Mexican Grill (CMG). This well-liked burrito chain hasn't only grown its revenue and profit many-fold over the years, but its sock is one of the best-performing stocks over its lifetime. It's risen nearly 1,300 percent since its 2006 IPO. By comparison, the S&P 500 has increased 64 percent.
The 35-restaurant strong Fogo de Chao has numerous competitive advantages. It'll be the only traditional Brazilian restaurant chain on the exchange, for one. For another, it's also a money-maker, growing its top line by a meaty 30 percent from fiscal years 2012 to 2014. It flipped to a net profit of $17.6 million in the latter year.
The company hasn't specified a particular date for its IPO, but it stated in a regulatory filing that it would like to draw proceeds up to $75 million. The stock will be listed on the Nasdaq under the ticker symbol FOGO, and the lead underwriters are JPMorgan Chase's (JPM) J.P. Morgan unit and Leucadia's (LUK) Jefferies.
Motley Fool contributor Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Bank of America, Chipotle Mexican Grill, eBay and Leucadia. The Motley Fool owns shares of Bank of America, Chipotle Mexican Grill, eBay, Etsy, JPMorgan Chase and Leucadia. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
Let's start with mattresses. On average, a decent model will last for about 7 to 10 years before it starts to wear out. However, by using a mattress cover, flipping it a few times a year and telling your pet to sleep on the floor, you can keep it for years past its prime.
If your bed is starting to feel lumpy and stiff, don't just kick it to the curb. Try using a memory foam topper instead. For around $50, it'll make your bed more comfortable, so you'll be able to hold onto your mattress and your money.
We all know that vacuuming your carpet and having it shampooed every couple of years helps to keep it looking new. What may come as a surprise is that your bare feet can do as much damage to your carpet as your shoes. That's right -- your skin produces oil naturally, and that very same oil will attract dirt and make your carpet look a lot older than it is.
To stop that from happening, keep a shoe rack and a basket of house slippers on hand. They'll keep the dirt away and keep your feet feeling cozy.
Finally, when it comes to area rugs, here are a few steps you can take now to protect it for later on. Roll up your rug and dust underneath it, and while you're there, check for any sign of insects -- that's where they like to live. Get a good rug pad, too. It'll keep the fibers from getting pulled in different directions, while reducing wrinkles as well. Rotate your rug once or twice a year, especially if it's exposed to sunlight or covered by furniture. It'll help it wear evenly.
Remember these tips to get the most out of your mattresses, carpets and area rugs. You'll realize that by doing the little things, you can maximize their lifespan in a big way.
LONDON -- HSBC Holdings (HSBC), Europe's largest bank by market value, will cut up to 25,000 jobs globally to reduce costs and shift its center of gravity further toward the fast-growing Asian economies where it started out 150 years ago.
The London-based group, which is worth 120 billion pounds ($184 billion), about the same as U.S. giant Bank of America (BAC), said Tuesday it is "redeploying resources to capture expected future growth opportunities."
Though it hasn't yet decided whether to move its headquarters, the bank is clear on where it thinks its commercial future lies -- China and the Asia-Pacific region.
The bank has suffered a series of regulatory fines and crackdowns in Europe and the U.S. and now wants to capitalize on Asia's rapidly expanding class of newly wealthy. It intends to grow its asset management and insurance businesses, for example, in China's rich manufacturing heartland in Guangdong province and in South Asia, where economies like Indonesia are booming.
Many Western banks have sought to bolster operations in Asia, but HSBC has the advantage of already having a major presence there. Around 75 percent of its 2014 profits were generated in the region, even though it only has about a third of its staff there and its assets are dwarfed by those it controls in Europe. HSBC | CreditHSBC has historic ties to the region. It was founded in Hong Kong in 1865 when the city was a British colony in order to finance growing trade between China and Europe, much of it involving opium. Its original name says it all: The Hongkong and Shanghai Banking Corporation.
The company only became London-based in 1992 to meet the regulatory requirements of its acquisition of Midland Bank at the time.
"The world is increasingly connected, with Asia expected to show high growth and become the center of global trade over the next decade," said Stuart Gulliver, HSBC's chief executive. "We recognize that the world has changed and we need to change with it."
HSBC, which has operations in over 70 countries and around 51 million customers, aims to cut costs by $4.5 billion to $5.0 billion by the end of 2017 and reduce the number of full-time employees by around 10 percent, or between 22,000 and 25,000.
It intends to sell its operations in Turkey and Brazil, reducing its workforce by another 25,000. HSBC said it plans to maintain a presence in Brazil to serve large corporate clients.
About 8,000 of HSBC's 48,000 workforce in Britain will lose their job, with a number of branches earmarked for closure. The bank, which is also to rename its remaining U.K. branch network, hopes many of the job cuts globally will come from attrition.
A top union official in Britain said the cuts were the latest example of a workforce being punished for the misconduct of senior management. HSBC has paid billions in fines globally to settle investigations of market rigging and allegations it helped clients evade taxes and launder money.
"Front-line staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation," said Dominic Hook of Unite union.
A further concern for British staff is the possibility that the bank will move its headquarters out of London. HSBC said it will make a decision this year.
The bank has already warned about the economic risks facing Britain if the country opts to leave the European Union in a referendum that is due by the end of 2017. It's also complained about the cost of a levy that the British government puts on banks -- HSBC is set to pay around $1.5 billion this year alone on that.
HSBC's announcement comes a day ahead of a major speech from British economy minister, George Osborne, who many think is considering pulling back the bank levy.
"We think the financial logic for HSBC to escape the clutches of the U.K. -- and Europe -- is overwhelming," said Ian Gordon, an analyst at Investec. "What possible reason is there to stay?"
HSBC also said Tuesday it wants to return to profitability its global banking and markets division, which have been hit by tougher regulations since the financial crisis. In 2014, HSBC saw its post-tax profit fall to $14.7 billion from $17.8 billion the year before, largely because of fines and settlements with regulators.
Shares in HSBC closed down 0.9 percent at 614 pence in a weaker market in London.
-Kelvin Chan in Hong Kong contributed to this report.
American, the world's biggest airline company, lowered its second-quarter forecast for a key revenue figure and pretax profit margin. Southwest reported that its key revenue figure tumbled 6 percent in May.
Southwest CEO Gary Kelly said his airline was on track for a record profit in the second quarter. But he added that Southwest is beginning to scale back its planned flying in the second half of the year because the economy is weaker than expected. Southwest plans to expand flying again in 2016, though not as aggressively as in 2015.
Both reports added to investors' concern that the airlines may be adding flights faster than the pace of travel demand.
In midday trading, shares of American Airlines Group (AAL) were down 22 cents to $39.64 after slipping as low as $38.45; and Southwest Airlines (LUV) was down $1.58, or 4.4 percent, to $34.53. Shares of United Continental Holdings (UAL), Delta Air Lines (DAL), JetBlue Airways (JBLU), Alaska Air Group (ALK) and Spirit Airlines (SAVE) were also down.
American said that it expects revenue for every seat flown one mile in the second quarter will be 6 percent to 8 percent lower than a year ago. That's worse than the previous forecast of a decline between 4 percent and 6 percent.
The company, which also operates US Airways and the American Eagle regional airline, said passenger traffic in May rose 0.7 percent while it increased passenger-carrying capacity by 2.1 percent, leading to more empty seats than a year earlier.
Southwest Airlines said the revenue-per-seat figure dropped 6 percent in May, and it expects a decline of 4 percent to 5 percent for the April-through-June quarter. The decline indicates that Southwest likely is getting lower average prices as it aggressively adds flights, especially in Dallas.
Overall, Southwest's traffic grew 8.5 percent, which was enough to offset a 7.6 percent increase in capacity. The average flight was 84.4 percent full, which Southwest said was a record.
When Apple launches its Apple Music streaming service at the end of June, it will affect things big and small in the music industry.
Hundreds of millions of iPhone and iPad users in more than 100 countries will get to try the $10-a-month service for free for the next three months when it is pushed to their devices with a free upgrade.
They'll get unlimited access to tens of millions of songs during the trial, and afterward be required to pay a monthly fee for access, instead of paying for each album or song download.
"It'll change the way you experience music forever," CEO Tim Cook promised Monday at Apple's annual conference for software developers, held in San Francisco.
It could become one more thing that keeps current iPhone and iPad users inside the Apple Inc. (AAPL) ecosystem, while enticing others in.
Here's a look at some of the major aspects of Apple Music:
Integration With Siri
Subscribers will be able to ask Siri, Apple's mobile digital assistant, all sorts of unusual questions about music, and have any of millions of tunes play back in response.
Executive Eddy Cue demonstrated a few of them Monday, including asking for a playlist of the top 10 hits in the alternative genre, asking for a song from the soundtrack of the movie "Selma," and even asking for the top song from May 1982. (It was Joan Jett & the Blackheart's "I Love Rock 'n' Roll.")
Using Siri's artificial intelligence and one's voice could come in handy when working out, going on a jog or driving a car equipped with Apple's Car Play.
Real Radio Over the Internet
In modern times, Internet radio has been defined by automated playlist generators like Pandora, Songza and others. Apple is changing that game by bringing back living, breathing DJs. It plans to run "Beats 1," a live 24/7 radio station hosted by DJs -- including former BBC host Zane Lowe -- in Los Angeles, New York and London. The service will be free to users with an Apple ID.
It will also offer standard genre-based Internet radio stations, this time with playlists curated by humans, instead of the algorithms that power the soon-to-be-disappearing feature, iTunes Radio.
Apple is opening a new platform for artists that allows them to release to fans content such as lyrics to an upcoming song, behind-the-scenes video, or even new tracks. Any user can access "Connect" through a tab on the Apple Music app, and can follow artists and access their feeds. Only subscribers will be able to view, save and like the content.
Requiring payment for what might be considered promotional content is new to subscription services, but super-fans may be drawn in.
Apple Music vs. My Music vs. Beats Music
Apple device users who have bought songs or albums on iTunes needn't worry. Their music will still be on their devices, and in many cases, still saved to the cloud.
Music that isn't available for streaming but still for sale on iTunes, like songs from the Beatles, can be integrated into playlists. Subscription music can be saved for offline listening alongside downloads.
And the some 300,000 subscribers to Beats Music, which Apple bought along with the headphone line for $3 billion last year, will have the opportunity to transfer their playlists over to Apple Music, at which point, their Beats subscription will be canceled.
Apple touts its human curation so much, it's making you pay for it. A new "For You" tab will offer subscribers music suggestions based on artists and genres they say they like, as well as what they actually listen to. A team of music experts is said to be behind every pick. This feature is a nearly direct import from Beats Music.
"These people are going to help you with the most difficult question in music: What song comes next?" said Apple executive Jimmy Iovine, who helped develop the service.
Better Deal for Record Labels, Artists
Music fans who have read about artists and record labels complaining about the tiny royalties they get from streaming services may have something to cheer about.
According to two people familiar with the matter, last-minute deal-making did result in a better streaming deal for record labels and artists.
Instead of sharing the industry-standard 55 percent of subscription streaming revenue with labels and artists, Apple will share around 58 to 60 percent. Music publishers in charge of songwriting royalties also saw a slight bump in their cut from the standard 10 to 12 percent to about 14 percent of subscription revenues, the people said. The people spoke on condition of anonymity because the deals are confidential.
Apple is letting users of Google's (GOOG) competing Android mobile operating system use a version of the Apple Music app beginning this fall. But those users will have to pay to access Beats 1 and some features of Connect that Apple device users will get for free.
Can Apple Come From Behind?
Industry analysts expect Apple's biggest advantages -- its huge user base, ability to sell its services with attractive TV ads, and global reach -- will get the service up and running successfully.
Whether it will dramatically raise the popularity of streaming services is unclear. Currently, Apple's Beats Music serves just a tiny fraction of the 41 million paying music subscribers globally.
Russ Crupnick, managing partner of research firm Music Watch Inc., says he's not sure whether Apple has come up with the right package of services to make paid music streaming at $10 a month take off.
"You've got to really change the mindset of consumers to have them say, 'Wow, this makes it worth the money,' " Crupnick says. "I still think you'll have a lot of people who will say, 'No thanks, I'll take the 99-cent track. There are a lot of places where I can listen to music, thank you very much.' "
-Technology writer Anick Jesdanun in San Francisco contributed to this report.
NEW YORK -- U.S. stocks ended flat Tuesday though the S&P 500 snapped three days of losses as financial and consumer staples shares bounced.
Shares of biotech companies were among the biggest drags, including Biogen (BIIB), down 1.1 percent at $382. The Nasdaq biotech index was down 0.7 percent.
The S&P financials were up 0.3 percent, helped by prospects for higher interest rates, while S&P consumer staples were up 0.5 percent.
It's a market that's searching for a rationale at this point ... and waiting for next week's [Fed] meeting.
"It's a market that's searching for a rationale at this point ... and waiting for next week's [Fed] meeting," said Quincy Krosby, market strategist at Prudential Financial, which is based in Newark, New Jersey.
The Dow Jones industrial average (^DJI) fell 2.51 points, or 0.01 percent, to 17,764.04, the Standard & Poor's 500 index (^GSPC) gained 0.87 points, or 0.04 percent, to 2,080.15 and the Nasdaq composite (^IXIC) dropped 7.76 points, or 0.15 percent, to 5,013.87.
The Dow Jones transportation average ended down 0.3 percent, just shy of correction territory, which would be a drop of 10 percent from its Dec. 29, 2014, record close of 9,217.44.
Data released Tuesday showed that U.S. job openings surged to a record high in April and small business confidence increased in May, signs that the economy was regaining momentum after stumbling at the start of the year.
Movers and Shakers
Shares of Hovnanian Enterprises (HOV) dropped 9.8 percent to $2.86, its lowest since 2012, after disappointing results.
Lululemon (LULU) shares rose 11 percent to $68.27 after the Canadian yoga-apparel retailer raised its full-year revenue and earnings forecast.
Sage Therapeutics (SAGE) jumped 15.4 percent to $86.71 after its experimental injectable drug was found to be effective in treating postpartum depression.
Declining issues outnumbered advancing ones on the NYSE by 1,976 to 1,066, for a 1.85-to-1 ratio on the downside; on the Nasdaq, 1,645 issues fell and 1,093 advanced for a 1.51-to-1 ratio favoring decliners.
The S&P 500 posted 10 new 52-week highs and 9 new lows; the Nasdaq composite recorded 88 new highs and 46 new lows.
What to watch Wednesday:
If you have recently researched investment management services, chances are that you have come across the term "robo-adviser."
Who are these robo-advisers and can you trust them with your financial future?
A robo-adviser is an online investment platform that uses algorithms to determine asset allocations for investors and manages their investment dollars with minimal human intervention. Because they utilize technology rather than active management by a human, robo-advisers charge significantly lower fees than what most financial advisers typically charge.
"It's a fast growing business today, with something close to $20 billion in assets under management," says David Larrabee, director at CFA Institute, the association of investment professionals. "Robo-advisers are here to stay and have demonstrated there is demand."
According to recent research by A.T. Kearney, approximately $2 trillion will flow into robo-adviser platforms over the next five years.
What is driving the explosive growth in the robo-adviser marketplace? Experts point to the demographics, account sizes, and low costs as the main factors.
With a robo-adviser, clients open an account and typically start by answering a series of questions about their age, tolerance for risk, and investment goals. The platform provides an asset allocation based on their answers. An older investor nearing retirement, for example, will be recommended a more conservative asset allocation than a younger investor who will be working for decades to come.
Low-Cost Index Investing Keeps Emotions Out of Your Investment Strategy
Robo-advisers typically don't trade individual stocks or offer specific stock trading advice. Rather, they tend to invest in low-cost ETFs, which provide instant diversification, as well as tax efficiency.
Most robo-advisers adhere to a buy-and-hold, passive investing strategy. They don't pick stocks or try to time the market. Instead, robo-advisers are charged with figuring out the exposure investors should have to stocks, bonds, international investments, and other asset classes, and use each individual investor's age, expected retirement date and risk profile to come up with an asset allocation and stick to it, regardless of day-to-day market movements.
Account Rebalancing Keeps Your Investment Goals on Track
Although robo-advisers do not react to stock movements, they do track the markets on a daily basis. If market swings move clients' portfolios out of balance with respect to their recommended asset allocation, they rebalance accordingly, while being mindful of creating taxable events or incurring trading fees.
As a result, investors with these platforms do not have to get on the phone with their money manager if one company is driving an entire sector down. They can rest assured that, provided that they are in a properly diversified portfolio, they will be able to stay the course and ride out any market downturn.
Investors who need estate planning or have complex investment portfolios may want the hand-holding that comes with a financial adviser, or simply find a good lawyer and then choose low-cost index funds or ETFs on their own. For many investors, however, robo-advisers offer a way to grow their investment nest egg without getting hit with high costs and fees.
Donna Fuscaldo is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.
By Allison Martin
Does this sound familiar? Every month you set a goal to save a small portion of your income, only to end up failing miserably.
It would be nice if we could all save money in the blink of an eye. Unfortunately, it's a task that requires effort, discipline and -- most importantly -- some sort of income.
If you're in a bind or just want to stash a little extra cash, here are 18 ideas about how to make your savings grow:
1. Keep the change. Retain the change from each of your transactions for an entire week and store it in a Mason jar, Ziploc bag or piggy bank. At the end of the week, count the coins to see how you did. Depending on how much you spend, you may have reached your goal by following this one simple tactic.
2. Reduce transportation costs. Download the GasBuddy or GasPriceWatch.com application onto your smartphone to locate the best deals in the local area on gasoline. You can also try carpooling with others from your job, or using public transportation for a week.
3. Eliminate dining out for one week. This suggestion is made over and over again, but it works. Brew your own coffee to start the day and use the leftovers from the prior night's meal for lunch. And if you're tempted to pick up an item from the snack shop, come prepared with your own treats and drinks in tow.
Also, kindly inform co-workers that you won't be accepting invitations to dine out for lunch during the week.
4. Skip entertainment. Don't plan on going to a play or the movies. An alternative is to find free entertainment at local community events. There's also the library, which is jam-packed with books and DVDs that you can borrow free.
5. Find free workouts. Do you pay weekly for fitness classes? Try finding fitness programs on television or the Internet, or at the library. I prefer SparkPeople when I need to change things up because it's a fitness hub with a variety of workout plans, many of which are customizable. It also offers meal plans for those looking to get fit.
If you're a member of a gym, consider canceling the membership and embracing the great outdoors or group workouts. Check the local recreation or community center for free exercise classes that you may be able to attend.
6. Only carry cash. Can you spare $100 each week without turning your finances upside down? Force yourself to save the funds by setting aside a cash-only expenditure budget for the week. Once the cash is gone, your spending is done.
Can't wrap your head around that? Break the task into small increments of $20 a day. Once five days have passed, you will have met your goal. High five!
7. Sell some stuff. Head to a local consignment shop or a retailer, such as a Plato's Closet, that will pay you on the spot for gently used goods. Can't find one in your area? Try hosting a garage sale, or set up shop at the local flea market.
8. Get to work. Pick up a temporary side gig to quickly accumulate funds. Or, let your creative juices flow and sell your products and services to others.
9. Clip coupons. No newspapers lying around? No problem. Head on over to a website like The Krazy Coupon Lady or Coupon Mom, where you will find printable coupons and corresponding instructions for putting the coupons to use. In some cases, a coupon can actually qualify you for cash back from the store.
10. Call your car insurance company. Inquire about any discounts that may be available. Also, raising the deductibles on your auto and homeowners insurance will drop your premiums. Just be sure you have money in savings to cover your increased out-of-pocket expense in case you have to file a claim.
11. Decrease your energy consumption. Reach out to your utility company to schedule a free energy audit of your home. Also, unplug any chargers or appliances that are not in use.
Set the thermostat a little higher to cut your air conditioning bill. Lower the temperature in winter and layer up. Also, consider hanging your clothes out on the clothesline to give the dryer a break.
12. Don't use your credit card. A high interest rate can greatly increase the cost of things you buy with your credit card if you don't pay off the balance in full each month. Hide the magic plastic and don't increase the amount you owe on the card.
13. Disconnect the cable. Freaked out by this suggestion? At least shave off the extras and try online television instead. Also, inquire about any discounts on bundles for which you may be eligible.
14. Skip the spa. It's always great to pamper yourself, but it can also add up quickly. My last spa visit, which consisted of a manicure, pedicure and massage, was well over $100.
15. Iron your own clothes. You can iron shirts and blouses, can't you? No need to pay a professional unless an article of clothing truly requires professional handling by a dry cleaner.
16. Call your cellphone provider. If the provider isn't willing to reduce your monthly bill, switch providers or get a prepaid plan. Also, check out the free or steeply reduced price options, such as Republic Wireless. They do the job just as well as the big boys. I know from experience.
17. Track your expenses. The simple act of paying attention to all of your daily expenses may be motivation enough to spend less. Join a free expense-tracking service like PowerWallet, then check in daily to see where your money's going. PowerWallet will automatically send you money-saving coupons based on what you're buying.
18. Pick up some free cash. Does your employer match retirement contributions? Add another $100 to your 401(k) and get a free $100 from the boss.
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By Laurie Kulikowski
NEW YORK -- Summer is here and that means Americans will be taking some much-needed vacation time over the next few months.
But not everyone wants to spend thousands of dollars on a vacation. Some are choosing staycations, while others look for affordable trips.
In order to help vacationers find the most appealing and budget-friendly destinations, WalletHub ranked the 80 most populated metropolitan areas on five main areas: costs and hassles of getting there; local costs; attractions; weather; and parks and recreation. Within those five areas, WalletHub then drilled down into 13 key metrics to measure each area by, such as: the cost and duration of the cheapest flight; the cost of a 3-star hotel in the area; the diversity of attractions, among others.
Check out which U.S. cities made WalletHub's top 10 list. TheStreet also provided additional wallet-friendly activities for each city.
Sources used by WalletHub: Data used to create these rankings were obtained from the U.S. Census Bureau, the Council for Community and Economic Research, Kayak.com, TripAdvisor, Travbuddy.com and WalletHub Research.
By Brian O'Connell
NEW YORK -- For Americans 30 and under choosing a health care plan -- many for the first time -- there is no shortage of moving parts to consider.
For keeping costs low for younger consumers who habitually make the lowest incomes, accepting a high-deductible plan in exchange for lower monthly premiums (or payments) might be the way to go. After all, the 30-and-under demographic isn't only the youngest section of the workforce, it's also the healthiest, and accepting some elevated risk of using high health care plan deductibles can make good sense.
To find the best option, Harley Gordon, co-founder of Agent Review, a Bellevue, Washington, online insurance agent reviewer, advises the younger generation to focus on the "three H's":
But there is a caveat with this approach. "This could yield positive results, but a lot of young, single people can get into a bit of a trap," he says. "They may not make much money -- say $35,000 a year in an entry-level job -- but because they are single with no dependents, they still earn well above the poverty line and won't qualify for much of a subsidy, if any."
If the young man or woman is under age 26, the ACA has a way to help: They can stay on their parents' plan, Beck notes.
My advice to a young person is to take the highest deductible with the best network they can find.
Additionally, healthy younger people should learn about the limited-network plans that are increasingly available for lower costs. "Individuals under age 30 are also eligible for 'catastrophic' plans, which is its own tier of plans that are less expensive than most bronze-level plans [on the health exchanges] and can be a very affordable option," O'Donnell adds.
If you do opt for a high-deductible plan, you may have more leverage -- and more leniency, financially -- than you might think.
"My advice to a young person is to take the highest deductible with the best network they can find," Gordon says. "Most Obamacare plans have restricted networks, so they should make sure good hospitals and doctors are in the network. If there is a large bill and the deductible is reached, almost every hospital and doctor will negotiate a payment plan over a period of years."
"Just because there is a bill for $6,000, it doesn't mean it must be paid right away," Gordon says.
BlackRock pointed out in this blog post.
Mortgage debt did reduce, but it was largely the result of banks writing off bad debt, rather than consumers paying down old balances. And by historic standards, total consumer debt remains high. As a percentage of disposable income, it remains above 100 percent. Before 2002, household debt had never gone above 100 percent.
Last week the Federal Reserve of New York released updated household debt data, showing that total consumer debt has now reached $11.85 trillion, an increase of $201 billion. The biggest growth came from:
It is true that automobile purchases dramatically reduced after the 2008 crisis. As a result, there was a lot of pent-up demand that has led to the recent increase in auto purchases and financing. However, as Experian Automotive noted earlier this month, there's a more worrying trend. The average term of auto loans is increasing rapidly. Auto loans with terms of 73 to 84 months are now 29.5 percent of all vehicles financed. That's up from just 9 percent five years ago.
When people walk onto an auto dealership, they generally worry only about the monthly payment. By offering much longer terms, the auto dealers are able to offer much bigger loans while keeping the monthly payment relatively flat. However, automobiles are depreciating assets. When you finance an automobile over a longer term, you end up with less principal reduction in the earlier years. That means borrowers will have to wait longer before they can purchase their next automobile, otherwise many borrowers would be facing a negative equity situation.
Even more concerning is the longer term on used automobiles. The average term of a used car is now 62 months, which means the borrowers will have to keep those cars for years. In a worst case scenario, the car starts to break down while there is still significant negative equity.
As I have written earlier, student loan debt remains a ticking time bomb. In the most recent release from the Fed, we see that 90-plus delinquency remains above 11 percent. And total student loan debt has now reached $1.2 trillion, second only to mortgages.
It usually takes a while for true delinquency numbers to catch up with portfolio growth. Over half of the student loan debt outstanding is still not yet in repayment. As more students graduate with student loan debt, we can expect to see the delinquencies and defaults increase.
Mortgages finance the purchase of a home, which can be an appreciating asset. Student loans finance a college education, which can help enhance lifetime earning potential. Auto loans finance a depreciating asset, but it is a necessity in most of America for work and education. Credit cards, however, are an extremely high cost ways of borrowing money for everyday expenses. They are also used to finance luxuries that we can't afford. Credit cards regularly charge an interest rate higher than 15 percent.
It isn't a surprise to see credit card businesses expanding aggressively. It is now possible to earn unlimited 2 percent cash back. You can easily obtain 40,000 bonus miles if you sign up for a frequent flier credit card. And if you have a less than perfect credit score, credit card companies are increasingly accepting you. The risk tolerance of credit card companies is expanding, as they look to continue generating strong returns.
In the face of this marketing onslaught, Americans of post-2008 are starting to resemble the Americans of before 2008. We continue to open millions of new credit cards every month. And now balances are starting to grow as we use these cards. I expect that credit card balances will continue to increase.
Dealing With Debt
As the recovery continues, unemployment has been reducing. However, wage growth has been minimal. As credit becomes increasingly available, it is important to keep your fixed costs low, avoid the temptation of credit card debt and find the lowest interest rate for the debt that you have.
The two biggest components of most people's fixed costs are their mortgage and auto payments. I have two simple rules: try to keep your mortgage payment well below 30 percent of your monthly net income. Ideally, it shouldn't be more than 25 percent of your take-home pay. And try to keep the term of your auto loan below 5 years -- and ideally no more than 3 years.
For an automobile, you should ideally be saving for the purchase of a car and pay cash. If you don't have the cash for a car, you can certainly consider financing. Consider a credit union like PenFed, where interest rates are as low as 0.99 percent. Obtain your financing before you walk onto the dealer's lot. By financing your automobile for only three years, you will end up buying much less expensive cars. And that is the point. If you have a family income of $60,000 you shouldn't have $40,000 automobiles sitting in the driveway.
Avoid credit cards for everyday spending. You should only use a credit card if you have the discipline to pay the statement balance in full, every month. If you struggle with budgeting, consider using an app like Level Money. It is one of the best budgeting apps I have found.
And if you have credit card debt, you should look to pay off the debt as quickly as possible. The most important part to paying off credit card debt is setting a written budget and aggressively attacking the debt. You can help speed up debt repayment by refinancing to a lower interest rate. A number of marketplace lenders have been established to offer personal loans. Consider shopping for a lower interest rate using a website like MagnifyMoney (which is my website) or CreditKarma. With marketplace lenders, you can reduce the interest rate on your debt by 30 percent or more.
Yet We Continue To Borrow
There have never been so many tools available to save money. You can use websites like MagnifyMoney to find the lowest interest rates on debt. You can refinance your debt with start-ups like Lending Club, at a much lower interest rate. You can manage your spending with budgeting apps like Level Money. Yet we continue to borrow. All of these tools are great. But what we need is a commitment to stop living beyond our means. It looks like it is going to take more than the 2008 crisis to get us to change.
take some time to evaluate both their current situation and future goals before clocking out for the final time.
Here's what financial experts say you should do (and not do) during the year before you retire.
Do: Review Your Expected Budget and Cash Flow
The first thing pre-retirees should do is estimate what their expenses will be in retirement.
"[My] single biggest tip is to put together an itemized monthly budget," says Michael Milarski, partner with Signature Financial Planning in Pittsburgh.
Pre-retirees often make the mistake of focusing solely on the bottom line of their 401(k) or IRA statement, he says. But what may be more important than the total balance is the monthly cash flow you can expect to pull from those accounts. Milarski recommends adding up all your monthly expenses -- with travel plus major and future expenses included -- and having a financial adviser run "Monte Carlo simulations" to determine how long you can sustain that budget before your money runs out.
"Pre-retirees also need to take a hard look at where their sources of income will be coming from," says Steven Elwell, vice president of Schroeder, Braxton & Vogt in Amherst, New York. In addition to Social Security and pensions, those heading toward retirement need to decide when and how to start pulling money from 401(k)s, IRAs and other retirement accounts.
Larry Rosenthal, president of Rosenthal Wealth Management Group in Manassas, Virginia, says poor management of private retirement accounts can be a costly mistake. "I see [seniors] sometimes withdrawing too much money and paying excessive taxes to stick [money] in a checking account," he says. While those with Roth IRAs can make tax-free withdrawals, money from a traditional IRA is taxable and withdrawals before age 59½ often trigger a 10 percent early withdrawal penalty. Beyond having to pay taxes on money they don't plan to use immediately, retirees could find that unneeded withdrawals bump them into a higher tax bracket.
Don't: Forget About Health Insurance and Life Insurance
Reviewing insurance policies is another must-do for pre-retirees. Medicare doesn't start until age 65, which means early retirees could find themselves without coverage and without access to their employer's health plan.
"Create a plan to avoid a lapse in medical coverage," Milarski says. "[Early retirees] need some sort of coverage as a bridge from retirement to Medicare."
As for life insurance, Rosenthal says it's not so much a question of finding new coverage as it is seeing whether you can reduce your monthly expenses. "Ask what happens with your whole life insurance [policy] if you stop payments," he advises. Depending on the policy, some companies may allow premiums be taken from the cash value, which can free up much-needed money in a retiree's monthly budget.
Do: Refinance Now Rather Than Later
If you think refinancing your home mortgage is a wise financial move, Rosenthal says you should pursue it while you are still are earning income. "Refinancing becomes harder after retirement," he says. Creditors may be hesitant to provide loans to those who don't have any earned income and are living on retirement funds.
Along the same lines, consider whether you want to make any major purchases in the near future, such as a car or RV. In most cases it'll be easier to buy these items now rather than obtain financing after you've left the workforce.
Don't: File for Social Security Too Early
One of the biggest decisions you need to make as you approach retirement is when to take Social Security. "I see far too many seniors starting Society Security too early," Elwell says.
While you can sign up for Social Security any time after age 62, your monthly benefits will increase for each month you wait up until age 70. "Delaying your Social Security can be one of the smartest financial strategies for healthy people," he says. "Proper planning for a married couple could yield tens of thousands, if not hundreds of thousands, of dollars more over a normal lifetime."
Smart use of funds from your retirement accounts can be one way to comfortably postpone the start of Social Security benefits. "Work on initiating a plan to start monthly withdrawals from retirement funds," Milarski says. He recommends consulting with a financial professional to determine the right amount to withdraw, noting an annual withdrawal of no more than 5 percent of the fund balance is usually ideal.
Do: Find a Social Outlet in Advance
Before you leave the workforce, decide whether you need to find a new social outlet. Rosenthal says, "Ask the question: Am I getting most of my social interaction in the workplace or outside the workplace?
If the workplace is your main source of friendship, you may have a rocky transition to retirement, where long hours at home can lead to boredom or marital tension.
"I recommend pre-retirees think about the things they enjoy doing and find their passion once they retire," Elwell says. "It's one thing to be financially prepared for retirement but another to be mentally prepared."
Elwell says his happiest clients are the ones who have found meaningful activities to fill their time. To find your happy place, consider whether you might want to travel, pick up a new hobby, work part time or volunteer for a favorite charity after you finally say goodbye to the daily grind.
NEW YORK -- Millions of fliers might soon want to buy new carry-on suitcases.
Global airlines announced Tuesday a new guideline that recommends shrinking carry-on bags, in an effort to free up space in packed overhead bins.
The guideline, which isn't binding, means that many existing bags currently in compliance with airline rules wouldn't be given preferential treatment in the boarding process. While details of how the guideline will be implemented are murky, and could vary from airline to airline, it raises the possibility that many fliers would be forced to check their favorite carry-on bag.
Fliers might ultimately need to buy smaller suitcases or pay a fee to check their bags, typically $25 each way.
Once again, the airlines find a way to make their problem the passenger's problem -- and an expensive problem at that.
"Once again, the airlines find a way to make their problem the passenger's problem -- and an expensive problem at that," said travel industry consultant Henry Harteveldt. The lack of overhead space is due to airlines cramming too many seats on planes and charging passengers to check their suitcases, he said.
Airlines around the world have varying standards -- different enough that a carry-on bag that is acceptable to one airline isn't allowed in the cabin of another. The airline trade group says the new guideline won't necessarily replace each airline's rules on bag size, but gives them a uniform measurement that "will help iron out inconsistencies."
Charlie Leocha, a consumer advocate and co-founder of Travelers United, said if enough airlines adopt these guidelines it will be great for travelers to at least know what size bag is acceptable on multiple airlines. However, Leocha measured his own carry-on bag Tuesday-- one that he has traveled with for more than a decade and never struggled to fit into an overhead bin -- to find out that it doesn't comply with the new suggested size.
"Are the airlines are cahoots with the baggage manufactures? It just seems crazy," he said.
Many bags already marketed as carry-on compliant actually aren't.
For instance, for $56.99 Walmart (WMT) sells the Rockland Luggage Sonic 20" ABS Spinner Carry On. The bag is the right height and width but is 1 inch too deep for current U.S. airline rules. Macy's (M) sells a Samsonite Silhouette Sphere bag for $460 that is marketed as meeting "carry-on requirements for most major airlines" but the bag is 15 inches wide, 1 inch too large.
One Passenger, One Bag
Theoretically, if airlines follow this guideline "everyone should have a chance to store their carry-on bags on board aircraft of 120 seats or larger," the trade group said. Today, it's typical for the last 20 or so passengers to board to be forced to check their bags at the gate because the bins are already full.
Nine major international airlines will soon introduce the guideline into their operations. Chris Goater, a spokesman for the transport association, said they are: Avianca, Azul, Caribbean Airlines, Cathay Pacific, China Eastern, China Southern, Emirates, Lufthansa and Qatar.
"It's certainly not mandatory," Goater said.
No U.S. airlines have yet signed on, but Goater expects more carriers to quickly do so. The suggested size was just unveiled publicly Tuesday at a meeting of global airline CEOs in Miami.
The airlines said they are working with several large luggage manufacturers including Samsonite, Delsey and Tumi (TUMI) but none have yet signed on. Bags with new labels, designating them as "Cabin OK," are expected to be in stores by the end of the year.
Airline consultant Robert Mann said that if airlines did a better job of handling checked luggage, passengers wouldn't bring so many on the plane and fight for overhead bin space. Those $25 bag fees don't help either.
"They literally create a disincentive to play their game," Mann said.
In the end, Mann said airlines will do very little -- regardless of bag size -- to separate frequent business travelers who account for the bulk of their revenue from their suitcases.
When it comes to the manufacturing sector in the U.S., it's not quite "Happy Days Are Here Again," as some have been singing for the past few years. Once you look closely at the data, it's more like "Those Were the Days."
That's because since the Great Recession, manufacturing is down 3.2 percent, according to an eye-opening report by the nonpartisan Information Technology and Innovation Foundation. It notes there are now 15,000 fewer production facilities in the U.S. than in 2007 -- and 2 million fewer jobs.
A look at the numbers suggests that the rallying cry about a manufacturing renaissance has been wishful thinking among many industry trade groups and economists. Even favorable shifts in a host of factors, including labor costs, the shale gas boom, transportation costs and the weak U.S. dollar, hasn't revitalized the sector to its post glory days.
We're seeing stable and slow recovery in demand ... but that doesn't necessarily mean that growth will continue or that we're in a state of renaissance.
"We're concerned about the overall decline of the manufacturing industry since around the turn of the century," said Adams Nager, an economic research analyst at ITIF and co-author with Robert Atkinson of "The Myth of America's Manufacturing Renaissance: The Real State of U.S. Manufacturing."
Much of the renaissance hype is tied to growth over the last four to five years since the Great Recession, which can be misleading, he added, because the trough was so deep. "We're seeing stable and slow recovery in demand, and that explains the growth in manufacturing, but that doesn't necessarily mean that growth will continue or that we're in a state of renaissance," Nager said.
The best measure of the health of manufacturing is real value added, Nager said. Since 2013, the most recent year data is available, that number was down 3.2 percent from 2007 levels -- just prior to the recession -- despite 5.6 percent GDP growth, he noted. "If you take out computers," a particularly strong sector, "we shrank 7.7 percent." What's more, the report said, there are still 2 million fewer jobs and 15,000 fewer manufacturing establishments than there were in 2007.
In February 2012, PricewaterhouseCoopers released a study entitled, "Shale Gas: A Renaissance in U.S. Manufacturing?" It was among similar widely touted analyses of how the ongoing boom in natural gas -- largely prompted by hydraulic fracturing, or fracking -- was one of several key components that might lead to a surge in U.S. manufacturing and employment. Others were the low rate of the dollar, the high price of oil (then around $100 a barrel) and rising labor costs in China.
During the intervening three years, however, those trends haven't exactly panned out, as the ITIF's myth-busting report laid out:
The resurgence in U.S. manufacturing is in fact a long-term prospect, McCutcheon clarified, and regardless of headwinds, certain sub-sectors, like energy, are doing better than others. Heavy-equipment, metals and chemicals, which benefit from being less labor-intensive, and lower energy costs, are relatively robust. He also points to advanced, disruptive technology -- robotics, 3-D printing, the Internet of Things -- as American strengths.
"The global economy is evolving, and the U.S. is right in the epicenter of it all," opined Dave Blanchard, a senior editor at IndustryWeek, in sizing up America's current manufacturing stature. He addressed the ballyhooed promise of reshoring or near-shoring of jobs back to the U.S. from foreign sites. Reports of Apple (AAPL), GE (GE), Caterpillar (CAT) and other major players reshoring some operations are feel-good anecdotes, he said.
And manufacturers could reduce supply-chain costs, like logistics, transportation and warehousing, by setting up shop in close-by, low-wage countries such as Mexico. But that's not going to make a dent in the nearly 5 million U.S. manufacturing jobs lost since 2000, he said.
The National Skills Shortage
Blanchard said that "the state of U.S. manufacturing in 2015 is relatively robust compared to where it had been over the previous decade," referring to the rebounded auto industry and the energy sector, and that increased use of robotics and other next-generation manufacturing technologies hold promise. In that latter vein, he joins a rising chorus of observers who insist that although the U.S. remains the world leader in R&D, training workers to use the technology is one of the greatest challenges for manufacturers.
Sridhar Kota is a professor of mechanical engineering at the University of Michigan and a board member of the coincidentally named Manufacturing Renaissance, a Chicago-based nonprofit champion of advanced manufacturing. He also served from 2009-12 in the White House Office of Science and Technology Policy, where he helped establish the Advanced Manufacturing Partnership and its signature Manufacturing Innovation Institutes.
"We need a plan for what to do with good ideas and how to mature them," he said, "to create the infrastructure, knowledge and skills so that ideas turn into products and the manufacturing sticks here, rather than invent it here and make it 'over there.'"
He bemoaned the fact that R&D in the U.S. was responsible for the technology behind solar cells, lithium-ion batteries and flat-panel TVs, though we ceded production of those lucrative markets to overseas manufacturers.
Getting Back Our Mojo
"Those ships have sailed, and they're not coming back," he said. But what about next-generation technologies we're working on now, such as flexible electronics, nanocellulose and self-driving cars? "We can't let Asia pick them up," he said, advocating for more public-private R&D partnerships. "When new technology is emerging, you want R&D and manufacturing to be co-located."
Kota agrees with NAM and other manufacturing boosters that to spur existing industries, the U.S. needs to make them more competitive through reforms of the tax code, free trade and regulations. Echoing that sentiment is Deborah Wince-Smith, president and CEO of the Council on Competitiveness in Washington, D.C. The non-partisan council supports manufacturing competitiveness through innovation, but is critical of what Wince-Smith said is "our very innovation-hostile capital cost structure and regulatory environment in the U.S. that's impeding many of these things," especially advanced manufacturing.
She, too, calls for new models of public-private partnerships to foster R&D. Toward that effort, this week the council will announce a new initiative, Exploring Innovation Frontiers, a 10-year program integrating energy and manufacturing productivity.
"We continue to be an innovation game-changer in many areas," Wince-Smith said, "but it can't just be in software and communications. We still have to make things, because we live in a physical world."
-By Bob Woods, special to CNBC.com
By Jeff Cox
Folks waiting for that big economic boost from lower gas prices ought to stop holding their breath.
That's because moves like the one seen since June 2014 -- down an average of 84 cents a gallon -- often don't have a huge impact, particularly if they're driven by supply surges rather than demand drops.
A research paper this week (with multiple charts) from the New York branch of the Federal Reserve clarifies the effects: Using a slew of variables and looking from 1986 through the first quarter of 2015, the conclusion was basically that in instances of oversupply, gross domestic product and consumption over the longer run increase "quite modestly" while nonresidential investment i.e., capital expenditures for business shows somewhat stronger growth.
Americans are certainly driving more, and in newer cars. We just might not have any particular place to go.
Reality, though, hasn't meshed. Consumer spending has been tepid and GDP growth has been abysmal -- a decline of 0.7 percent in the first quarter, a gain of just 2.2 percent in the fourth quarter of 2014, and second-quarter growth tracking at just 1.1 percent, according to the Atlanta Fed.
That's occurred as gas prices at the pump plunged from an average of $3.70 a gallon a year ago to $2.86 a gallon this month, with a low of $2.15 a gallon back in February, according to the Energy Information Administration.
Researchers at New York brokerage Convergex believe they know where Americans spent their savings at the pump -- on more gas. Looking at one period, Convergex found that Americans drove 3.9 percent more in March 2015 than in March 2014.
"Americans are certainly driving more, and in newer cars," Nick Colas, the firm's chief market strategist, said in a note. "We just might not have any particular place to go."
As for a future economic bump from lower gas prices, New York Fed researchers Jan Groen and Patrick Russo said the biggest impact is probably in the rearview mirror.
"Our analysis suggests that the expansionary oil supply shock of late 2014 and early 2015 will have a relatively modest stimulative impact on economic activity," they wrote. "Which will peak around mid-2015, and the effects should dissipate significantly by early 2016."
WASHINGTON -- The U.S. budget deficit for May dropped sharply from the level a year ago but much of the improvement reflected a calendar quirk.
In its monthly budget report, the Treasury Department said Wednesday that the May deficit dropped to $82.4 billion, down from a deficit of $130 billion in May 2014. But last year's deficit was inflated because June 1 fell on a Saturday, requiring the government to mail out $35 billion in June benefit payments in May of last year.
For the first eight months of this budget year, which began Oct. 1, the deficit totals $365.2 billion, down 16.3 percent from the same period last year. This year's deficit improvement has been helped by a stronger economy, which has pushed up tax receipts by 8.6 percent.
The revenue increase pushed receipts to $2.1 trillion for the period October through May. Outlays were up at a slower pace, rising 4 percent to $2.47 trillion.
The government has run a deficit in May for 60 of the past 61 years. The May deficit followed a $156.7 billion surplus in April, when a flood of tax payments pushed government receipts to an all-time monthly high.
The Congressional Budget Office is forecasting that the deficit for the full year will total $486 billion, little changed from last year's deficit of $483.4 billion.
The 2014 deficit was down from $680.2 billion in 2013. Before then, the U.S. had recorded four straight years of annual deficits topping $1 trillion. That reflected the impact of a severe financial crisis and the worst recession since the Great Depression of the 1930s.
In the budget plan President Barack Obama unveiled for 2016, his final full year in office, the president is seeking authorization from Congress to spend $4 trillion and is projecting a deficit of $474 billion.
Obama's spending plan would boost spending on domestic and military programs and seek to raise taxes by $2 trillion by raising levies on the wealthy, corporations and smokers.
Republicans have attacked Obama's proposed tax increases and the fact that under Obama's spending plans, the budget will never reach balance. A GOP budget which cleared Congress last month seeks to balance the government's books over the next decade. It would cut spending on domestic programs and government benefits like Medicaid and food stamps.
Democrats have charged that the GOP budget only balances on paper because Republican lawmakers will balk at approving the follow-up legislation to enact the painful cuts needed to achieve balance without raising taxes.
NEW YORK -- Taco Bell executives are studying a strange new vocabulary emerging on this side of the border -- the lingo of its young customers.
CEO Brian Niccol said the company features a "Millennial Word of the Week" at its headquarters as a reminder of how the chain's biggest fan base communicates. Niccol said the words are "curated" by a group of employees in their 20s who send out an email every Tuesday or Wednesday. The words are also posted on screens and monitors around the office in Irvine, California.
The practice is another illustration of how eager companies are to understand millennials, who marketers say have quirks and traits that separate them from past generations. It's a demographic that's particularly important for Taco Bell, which is known for having younger customers who gobble up creations like Dorito-flavored tacos.
In the past, Niccol has said Taco Bell's success has been driven by the time it spends understanding what makes its customers tick. That apparently includes familiarity with the way they talk.
One installment of the "Millennial Word of the Week," for instance, featured the word "lit." According to a company email, the word is an adjective "used to describe a certain situation, person, place or thing as awesome/crazy or just 'happening' in general."
As an example of usage, it said, "Taco Bell was so lit last night. I had to wait in line for 15 minutes before I could order."
Other slang terms featured in Taco Bell's weekly updates have included "throwing shade," which Urban Dictionary says is to publicly denounce or disrespect a person and "Dat ___, doe," which translates to "That ___, though," and is used to emphasize that something is "particularly awesome," according to Urban Dictionary.
"Some of these words you see, I don't even know how you could use that in a sentence," said Niccol, 41.
That proved true last year when he spoke at a presentation by Taco Bell parent company Yum Brands (YUM), which also owns KFC and Pizza Hut. At the time, Niccol informed the audience of analysts and investors about the millennial phrase "on cleek," which he explained meant "on point."
Later, the website Buzzfeed noted that Niccol had meant to say "on fleek." In a conversation with The Associated Press, Niccol said his social media team was quick to correct him after the meeting.
"The next day they were like, 'You were close,'" Niccol said. "I accused them of telling me it's 'on cleek.'"
Taco Bell's push to connect with teens isn't limited to a study of their linguistics patterns, of course. Niccol said the chain is also formalizing a "teen advisory board" that will meet regularly and give the company feedback on what's happening in culture.
"In the end, that's how Taco Bell stays relevant," Niccol said.
NEW YORK -- U.S. stocks jumped Wednesday, helped by optimism that Greece may be closer to reaching a deal with creditors, and by gains in technology and financial shares.
All 10 major S&P 500 sectors ended higher, with the technology index up 1.6 percent and leading the gainers.
The S&P financial index, which has risen with the prospect of higher rates, climbed 1.4 percent and turned positive for the year.
The chairman of eurozone finance ministers said a cash-for-reform deal with Athens was still possible in time for their June 18 meeting, with just a few issues remaining to be solved, but Greek counter-proposals weren't yet satisfactory.
A Bloomberg report said the German government may settle for a clear commitment by Greece to at least one reform measure in order to unlock aid.
"The notion that they're going either kick the can down the road some more or actually come up with some kind of mutually acceptable deal is a mild positive. It's more the avoidance of a short-term negative," said Uri Landesman, president of Platinum Partners in New York.
Netflix (NFLX) was up 3.7 percent at $671.10 and hit a record intraday high of $692.79, a day after shareholders approved a massive increase in the number of shares the company is authorized to issue, the first step toward a possible stock split.
The Dow Jones industrial average (^DJI) rose 236.36 points, or 1.3 percent, to 18,000.4, the Standard & Poor's 500 index (^GSPC) gained 25.05 points, or 1.2 percent, to 2,105.2 and the Nasdaq composite (^IXIC) added 62.82 points, or 1.3 percent, to 5,076.69.
U.S. stocks have been under pressure as investors expect the U.S. Federal Reserve to raise rates sooner rather than later. The Fed has said it will raise rates only if data points to a recovery in the U.S. economy, which had come to a standstill in the first quarter.
HCC Insurance Holdings (HCC) shares rose 36.4 percent to $77.35 after Tokio Marine Holdings said it had agreed to buy U.S. specialty insurer for $7.5 billion.
Advancing issues outnumbered declining ones on the NYSE by 2,207 to 849, for a 2.60-to-1 ratio on the upside; on the Nasdaq, 2,032 issues rose and 731 fell for a 2.78-to-1 ratio favoring advancers.
The S&P 500 posted 35 new 52-week highs and 4 new lows; the Nasdaq recorded 167 new highs and 34 new lows.
About 6.5 billion shares changed hands on U.S. exchanges, above the 6 billion daily average for June so far, according to BATS Global Markets.
-With additional reporting by Tanya Agrawal.
What to watch Thursday:
With 45 candidates in the running, every vote will count as these folks head to the primaries. Unfortunately for the candidates, one particular class of voter may be in short supply this election cycle: union voters.
There (Was) Power In a Union
That's the upshot of a new poll released by Pew Research a few weeks back, which finds that despite their continuing popularity, actual labor union membership continues to dwindle. According to ClosetheGapCA, a political organization in California, "state and local labor unions are a powerful organizing force" that can help get a campaign off the ground. Moreover, "an endorsement from unions in your district provides a 'seal of approval,' encouraging members of the labor union to vote for the endorsed candidate."
Citing research from the International Association of Fire Fighters, ClosetheGap notes that "seven in ten union members say they are more likely to vote for a candidate who is supported by the AFL-CIO and national unions ..."
And yet, citing U.S. Bureau of Labor Statistics and Congressional Research Service data, Pew notes that union membership has plummeted to just 11.1 percent last year from about 20.1 percent in 1983 -- and a high of 34.8 percent of "wage and salary workers" in 1954. As a result, not all union endorsements are worth what they used to be.
Some Unions Are More Equal Than Others
The damage to union membership rolls, you see, while widespread, hasn't been distributed evenly. According to Pew data, membership in unions has declined in percentage terms both among public-sector workers (teachers, policemen, government bureaucrats) and in the private sector (steelworkers, autoworkers). Actual union members in the public sector, however, have grown to 7.2 million today from 5.7 million in 1983. In contrast, private sector union rolls have plunged 38 percent, to just 7.4 million today from 11.9 million 32 years ago.
Pew data show that today, the two jobs categories boasting the highest levels of union membership both lay in the public sector: "education, training, and library," and "protective service" (police officers and firefighters). In each profession, roughly 35 percent of the labor force in unionized.
The two professions least likely to be unionized are "sales and related" and "farming, fishing, and forestry," followed by workers in the food industry and the IT sector.
In between, four professions still boasting relatively robust union membership, but suffering steep declines regardless, are "construction and extraction," "transportation and material moving," installation, maintenance, and repair," and "production."
What It Means to You This Election Cycle
Electorally speaking, the steepest cuts in union membership seem to be falling on key "industrial" demographics. This could diminish the influence of traditional powerhouses such as the AFL-CIO and SEIU (Service Employees International Union) in the upcoming elections. In contrast, continued strength in the police and teachers unions suggest these traditionally key constituencies for the Republicans, and Democrats, respectively, can expect to receive prolific pandering this election season.
This will be an important dynamic for taxpayers to monitor this election cycle. Sure, overall, union membership is lower today than it's been in decades, and continuing to trend down. But the relative strength of public sector unions, and the fact that their numbers are growing -- in contrast to the private sector -- means that America's ongoing problem with paying for public pensions isn't going away any time soon. With so many politicians angling for the few union voters still available to be swayed, the pressure to continue making promises -- payable at a later date by taxpayers -- will be difficult to resist.
Taxpayers, this election season, remember: As you reach for the ballot pen with one hand, keep your other hand on your wallet.
Motley Fool contributor Rich Smith's mind is still boggled by that number. 45 candidates? Seriously? Rich has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned above, either. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond
By Hal M. Bundrick
NEW YORK -- They were "latch-key kids," then MTV teens and now mid-career workers with kids of their own. Gen X, the leading edge of which will turn 50 next year, with the youngest hitting 35, are facing the reality of their looming retirement prospects. And so far, there is much room for improvement.
Gen X was roiled by the Great Recession, losing nearly half of their wealth -- a full 45 percent. Now, a new study by Northwestern Mutual reveals that Gen X is compounding that major setback with the poorest financial habits of the four generations surveyed. Most respondents characterized themselves as spenders rather than savers, making them the generation most likely to have more debt than savings.
Almost 4 in 10 -- 37 percent -- admit they do not "at all feel financially secure," an outlook more pessimistic than any other generation, even the often money-challenged millennials.
And nearly one-quarter of Gen X is "not at all confident" that they will achieve their financial goals, with their top financial fear including a lack of retirement savings. Remember, this is the generation that may face the ramifications of a shaky Social Security system, the trust funds of which are forecast to be depleted by 2033, according to a recent study by researchers at Harvard and Dartmouth.
"It is not easy being X," said Rebekah Barsch, vice president of financial planning with Northwestern Mutual, in a statement. "Aside from weathering a number of economic cycles, this group is juggling home mortgages, educational debt and lifestyle needs."
Besides having kids of their own -- 44 percent have children under the age of 18 -- more than one-quarter have a parent or other relative living in the household as well. No wonder 36 percent of Gen-Xers have trouble paying their mortgage or rent. Nearly one-quarter (23 percent) have also quit putting money into a 401(k), IRA or other retirement account, according to the Insured Retirement Institute.
The result: Gen-Xers' median savings for retirement has fallen 15 percent in the last two years, from $70,400 in 2012 to $59,800 today. Of those who have managed to set aside money for retirement, 42 percent have less than $50,000 saved.
But facing a potential retirement shortfall, Gen-Xers have something their Boomer parents don't have much of: time to recover. As they cross the 50-year-old yard line, "catch-up" retirement plan contributions kick in, allowing an additional $1,000 to be put into IRAs -- and an extra $6,000 in 401(k)s.
Gen-Xers also have time to pay off their mortgages before retirement, helping reduce monthly budget demands for life after work.
And as their children grow older, expenses may decline, allowing even more financial resources to be allocated to retirement savings -- before their prime earnings years pass.
Facing 40 -- or pushing 50 -- may give the grunge generation something they need most: a wake-up call.