It is very early in the earnings season as companies started releasing third-quarter reports. So far, the reports have been solid which buoyed the stock market early this week. CNBC Investors are looking for signs of how companies are navigating high inflation and the slowing economy. So far, so good. But it is important to note that company earnings are a lagging indicator, meaning they follow economic changes and don’t lead them. Investopedia And analysts have been revising future earnings downward as you can see in the chart below. Company earnings and expected future earnings drive stock market returns long-term but the near-term economic outlook is uncertain as the Fed raises short-term rates. The markets have struggled this year with persistent broad high inflation despite signs it’s abating (see closing quote). It’s good news that the earnings reports have been solid so far, but inflation is still the main focus.
Natural Gas Shortage in Europe May Affect New England: Many homes are heated by natural gas and many power plants use gas as well. But New England does not have a lot of gas storage facilities or pipelines that carry natural gas. If there is a severely cold winter, liquefied natural gas is brought into terminals to make up for any shortfall. But if it is a very cold winter this year, New England will be competing with Europe for supplies which will be tight and the cost mighty. There is even the possibility of having rolling blackouts in New England. Be prepared for higher gas or electricity prices this winter and if it is cold, have a backup plan in case there are blackouts. WSJ
Baby Boom from Remote Work: Births have been declining in the U.S. for decades but that was reversed in 2021. Remote work created a baby boom for U.S.-born women, especially first-time mothers and the college-educated. Ironically, at the same time, there was a baby bust by foreign-born mothers who couldn’t enter the country. But if remote work and flexible work schedules remain, it could change the trajectory of the birth rate, which has long-term economic effects on the number of workers and consumers, Social Security, pensions, etc. Axios Globally, the U.S. is better positioned than a lot of countries when it comes to births. Some countries are expected to have population declines by up to 20% within the next 30 years. VisualCapitalist
Retirement Webinar Postponed: We had planned on conducting a webinar about retirement on Thursday, October 27th. But due to some scheduling challenges, we have postponed the webinar. We will keep readers posted when it can be rescheduled.
Financial Planning Corner:
Should You Carry a Mortgage in Retirement? Whether a retiree should have a mortgage depends on a lot of personal factors surrounding their planning, investment portfolio, taxes, and risk tolerance. In the recent past, some retirees decided to pay off their mortgage if they had excess cash or bonds. Cash and bonds were earning so little, it made sense to pay off the mortgage even though the mortgage rates were low. But cash and bonds are currently earning decent yields (finally after about a decade!). For some retirees now, it may make sense to keep cash or bond investments because they are yielding more than their mortgage interest. If you have questions about your mortgage, please contact your financial advisor. WSJ
Quick Hits for the Week:
- 16 workouts and techniques to increase your stamina: VeryWellFit
- Interview with William Shatner and why his space trip filled him with sadness: Variety
- Six exercises to prevent or relieve lower back pain. For those that can’t get past the paywall, the exercises are the side plank, front plank, glute bridge, bird dog, one-armed dumbbell row, and Pallof press: WSJ
- What is it like to spend a lot of time in the metaverse? NYT
- These mini wind generators with no spinning blades can power homes and buildings – and could be better than solar panels: Singularity Hub
The Top Regrets of People Dying: OK, the lead-in is a little dark. But a former palliative nurse states that heeding the advice of the dying can lead to better living. She has compiled a list of the most common regrets the dying shared with her when they were in her care. The regrets included living a life not true to themselves but what others expected, working too much, not expressing their feelings, not staying in touch with friends, and not choosing to be happy. Learning about the regrets of the dying can lead to making changes for leading a more fulfilling life. Now that sounds enlightening. Pocket
The Power of Naps: Good and sufficient sleep is one of the most important factors for health. But if the night's rest isn’t enough, can a nap fill the gap? According to numerous studies, naps are no substitute for a good night's rest, but a good nap can help with cognitive recall, endurance, and physical performance. The ideal naps are 20-30 minutes long, early in the afternoon, in a quiet, comfortable environment. Axios
Quote: “Evidence of falling inflation is everywhere except in the inflation data.” Ian Shepherdson, Chief Economist, Pantheon Macroeconomics, October 13th, 2022
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