2023 | June 12

The Market

Stocks Flat

The S&P 500 rose for the fourth week in a row, climbing to its highest level in nearly 10 months. Each of the major U.S. indexes produced a fractional weekly gain in a mostly quiet week of trading.

After closing on Thursday at 4,293.9, the S&P 500 eclipsed the level needed to exit the bear market that it had been in since January 2022. The index now has entered a bull market after rising 20% since a low on October 12, 2022.

A U.S. small-cap stock benchmark outperformed its large-cap peers for the second week in a row, narrowing small caps’ year-to-date underperformance gap versus large caps. The Russell 2000 Index has gained more than 5% over the past two weeks.

An index that measures investors’ expectations of short-term U.S. stock market volatility has dropped to the lowest level since January 2020 after falling 31% from a recent high on May 24. The CBOE Volatility Index (VIX) sank on Friday to 13.8, just above its level before the start of the COVID-19 pandemic.

A Japanese stock index on Tuesday closed at its highest level since 1990, extending its run of year-to-date outperformance versus the benchmarks of most of the world’s major economies. Stocks have been lifted in part by the recent resilience of Japan’s economy, which grew at an annualized rate of 1.6% in this year’s first quarter.

Although the U.S. economy has recently continued to generate new jobs at a rapid clip, the latest weekly count of newly filed unemployment claims rose to the highest level since October 2021. Unemployment benefit applications rose to 261,000 for the period ended June 3, up from 233,000 the previous week.

Bond investors appeared to be in a wait-and-see mode ahead of a U.S. Federal Reserve meeting next week, as U.S. government bonds traded in a narrow range relative to that market’s year-to-date choppiness. The 10-year U.S. Treasury bond was trading at a yield of around 3.74% on Friday, up from 3.69% at the end of the previous week.

With the U.S. Federal Reserve scheduled to conclude its next meeting on Wednesday, most observers expected that the Fed would keep its key benchmark interest rate unchanged at a range of 5.00% to 5.25%, potentially breaking a string of 10 consecutive meetings in which it has lifted rates. Investors will also be watching for any indications as to whether the Fed might shift back to a rate-hiking mode at its subsequent meeting ending July 26, if it chooses to keep rates unchanged at its June session.

Source: John Hancock Investment Management

The Challenges When Entering Retirement

Futbol And The Cost Of Living

There was big news for U.S. soccer last week. Argentinian star Lionel Messi announced he won’t be joining Cristiano Ronaldo in the Saudi football league. Instead, he’s headed to Miami FC – the last-place team in the MLS’s Eastern Conference, reported Jessica Golden of CNBC. Needless to say, ticket sales were way up and so were ticket prices. The stadium in Miami has just 18,000 seats.

Miami was also in the news last week because of its cost of living. SmartAsset studied how much a $100,000 salary would buy in 76 U.S. cities, after taxes, based on the cost of living in each city. Among the cities in the study, $100,000 goes the furthest in:

1. Memphis, Tennessee
2. El Paso, Texas
3. Oklahoma City, Oklahoma
4. Corpus Christi, Texas
5. Lubbock, Texas

The low cost of living and lack of state income tax elevated seven Texas cities into the top 10, reported Patrick Villanova of SmartAsset. Miami came in at #57. That still made it more economical than many larger and more expensive locales.

Miami is a bargain for the wealthy, reported Natasha Solo-Lyons of Bloomberg, citing another Smart Asset study. People with income of $250,000 who move from New York City to Miami would have 32% more to spend, thanks to lower taxes and a lower cost of living. People from San Francisco would gain 24%, but those from Chicago would have just 1% more, reported Jaclyn DeJohn of SmartAsset.

If you’re really looking for a bargain, the least expensive cities in the U.S. are Brownsville, Texas; Dayton, Ohio; Wichita Falls, Texas; South Bend, Indiana; and Toledo, Ohio, according to Niche.com.

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