Market Wrap-Up for Jan.23 (IBM, UTX, COH, TXN, DIS, more)
The bulls squeezed a bit more of the recent rally following some positive earnings results from market bellwethers Google (GOOG) and IBM Corp (IBM).
Aside from an advance in those two names, we saw stocks like CSX Corp (CSX), Novartis (NVS), Wellpoint (WLP), Norfolk Southern (NSC), and United Technologies (UTX) finish higher on their earnings numbers. On the flip side, investors were taking a bit of profits in names like Coach (COH), Quest Diagnostics (DGX), Siemens AG (SI), and Texas Instruments (TXN) on those companies results. Finally, the bullish calls on media plays continued with Walt Disney (DIS) feeling the love of a Wall Street analyst call this morning.
As always, consult The Dividend Daily for all the latest earnings reports and other news affecting dividend stocks.
The Consumer is Back! …Sort Of
As everyone in the media points to a renewed confidence in the economy and more importantly, rising consumer confidence, there is quite a bit of evidence that has us questioning the actual buying strength of consumers. The Federal Reserve has noted household debt figures have started to decline, which is a positive sign consumers may be getting more responsible in terms of how they dispose of their income. Taking a look closer, however, we see that defaulting on loans is a big part of the reason debt levels are dropping. This fact certainly takes a bit of the excitement away if one is banking on fundamental reasons for a decline in household debt.
Looking at specific numbers, total debt reduction from the peak comes in around $954 billion, according to the Federal Reserve. Loan write-offs, at $585 billion, account for 60% of that overall number. Not exactly the bullish evidence today’s business media tried to shove down the throats of viewers, is it?
How Does This Relate to Retirement?
The continued data we get on retirement savings coincides with my skeptical eye on how well most people are fiscally positioned today. Just look at recent data from the Employee Benefit Research Institute and you will see today’s financial realities: 60% of workers age 55-plus have less than $100K in savings and investments, factoring out home equity (which is no where near the highs we saw in the mid-2000′s for most) and pensions (outside of federal employment, many businesses don’t have the means or desire to carry pension programs). Not surprisingly, two-thirds of recently-polled workers said they’re behind in their planning and saving for retirement.
Clearly, the retirement picture in the U.S. is not looking pretty. Hence we continue to beat the drum of maximizing income streams and investing in high-quality dividend stocks. As time goes on, more and more people will need to take their retirement plans into their own hands. This trend will have far-reaching implications from an investment standpoint — as well as for the overall economy.
Thanks for reading everybody. I’ll see you tomorrow!
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