North American markets today, Monday, viewed several hours before opening at 9:30 a.m. EST look poised to open mixed-to-positive. The NASDAQ is in positive territory. The S&P 500 and DOW are negative but climbing at time of writing and could very possibly make it into positive territory by market opening. Canadian indicators are positive.
European markets are open at time of writing and are mixed. The FTSE 100 and CAC 40 are negative while the DAX is positive. This too, is changeable as the FTSE 100 and CAC 40 are improving at time of writing and could make it into positive territory during the trading day there.
Amongst precious metals, the safe havens of gold and silver are up.
Amongst currencies, the British pound sterling, Euro and Canadian dollar are all up against the American greenback. The relationship between the currencies could change during the week. “We are now in an uncertain period of whether the Fed really wants to run the economy hot or has already given itself a scare with inflation pressures rising,” says Jeremy Thomson-Cook, Chief Economist at London-based payments specialist Equals Money. “In this circumstance it seems pretty obvious that comments from Fed members will be closely watched with two making comments on the state of the US economy … this afternoon,” Thomson-Cook adds that Federal Reserve Chairman Jerome Powell’s remarks to Congress tomorrow could shed some light on the Fed’s intentions.
Certainly, all market watchers will be parsing every word that Powell says tomorrow. As well, as a new week begins it might be useful to consider several issues affecting the markets, including whether there is a kind of Musk-cryptocurrency fatigue out there. At a recent cryptocurrency conference, commentator and analyst Max Keiser repeatedly screamed “F--- Elon.” And was greeted with loud cheers.
While he was preaching to the converted – presumably, everyone at the conference was a crypto-believer, many who have resisted the urge to jump on the proverbial bandwagon may have been silently cheering. Tesla chieftain Elon Musk has wielded extraordinary power over the valuations of these currencies.
Earlier this year he drove Bitcoin prices to record levels by announcing that Tesla was a cyrpto investor. Later in a tweet he announced that Tesla would not accept Bitcoin as payment for cars – an announcement that led to a huge sell-off. Last week he announced that Tesla would allow Bitcoin purchases of Tesla cars if it became cleaner and the currency rallied again. Believers and non-believers alike cringe at how a single tweet have such market-making potential. Whether a single tweet can continue causing such incredible price volatility may become apparent this week.
More soberly, as the pandemic continues clearing – however haltingly – it may be time to reconsider retirement plans.
A recent paper entitled Decoding Retiree Spending published by Baltimore-based T. Rose Price Group Inc. and authored by Sudipto Banerjee, the company’s Vice President Retirement Thought Leadership suggests some new insights into retirement spending.
Amongst the findings, it says that retiree spending declines annually by 2%. That contradicts more conventional thinking that retirees want to maintain their accustomed standard of living.
Using data from a University of Michigan study, Banerjee’s paper argues that retirees do want to maintain a certain standard of living. However, they tend to adjust their spending to match income to avoid drawing down assets.
They also tend to adjust spending on fixed expenses to match guaranteed income from social security and pension plan payments. That challenges the assumption that these costs are really fixed.
The report stresses that retiree spending behavior shows a definite preference for asset preservation. For those professionals involved in counselling or otherwise working with individuals in this age group, this means aligning products and services that provide retirement income.
Services may include advising on the retirement juggling act – balancing preferences with financial flexibility. And greater-than-ever financial flexibility is what we are all going to need in the post-pandemic era.
Al Emid is a financial journalist broadcaster and author. His next book. The 2021 Emid Report on Volatility is scheduled for a Fall release.