Wednesday, November 26, 2014

Thanksgiving Spending Roundup

With gas prices the lowest they've been in years, it's no wonder that more of us say we'll be traveling this year for Thanksgiving. Four out of ten Americans are going somewhere for the holiday - a whopping 92 percent of them traveling by car, with 6.6 percent saying they'll be flying. Of those driving, 80 percent said they'd be going at least 50 miles.

While the cost of traveling has been dropping, the cost of dinner itself has been rising - but just barely. According to the American Farm Bureau Federation, a Thanksgiving dinner for ten will cost an average of $49.41, which is up just 37 cents from last year.

The turkey itself will cost you an average of $1.12 to $1.16 per pound this year, according to figures compiled by the USDA. That's up from $1.05 per pound last year.

Tuesday, November 25, 2014

2014's Biggest Little Winners

So far this year, there have been nine stocks in the small-cap Russell 3000 that have more than tripled or, in other words, grown by 200 percent or more. That may seem like a lot, but last year at this time, there were 45 such stocks, according to research from Bespoke Investment.

The big nine for 2014:

  1. RadNet, Inc., up 388.6 percent
  2. Receptos Inc., up 345.7 percent
  3. Avanir Pharmaceuticals, up 331.6 percent
  4. Pernix Therapeutics, up 314.3 percent
  5. Agios Pharmaceuticals, up 301.5 percent
  6. Achillion Pharmaceuticals, up 298.0 percent
  7. TG Therapeutics, up 287.1 percent
  8. VASCO Data Security, up 256.1 percent
  9. IGI Laboratories, Inc., up 209.3 percent

Monday, November 24, 2014

Tuition Trends

There's some good news out this week for college students - and the parents who are paying their tuition. Big banks have been reluctant to lower interest rates for student loans, but Wells Fargo just announced it would modify some existing loans, as well as extend some repayment periods starting next year. Similarly, Discover Financial Services said it would begin modifying some loans early next year.

There might be some relation between that decision and the news that college revenues are increasingly unable to keep up with inflation.  More than half of all public colleges said their fiscal 2015 revenue increases wouldn't be able to keep up with even a modest 2 percent inflation. All told, universities said this year would be their weakest year of revenue growth in more than a decade.

The connection between those two stories is that both lenders and colleges are starting to feel like they need to be more competitive to attract students' money. Those could be good signs for parents with kids headed for college in the near future.

Friday, November 21, 2014

Small Caps Coming to Life

The stock markets were up across the board yesterday, with the S&P 500 and Dow Jones industrial average both gaining 0.2 percent, and the Nasdaq up 0.6 percent. But the small-cap Russell 2000 index was the biggest gainer of all, rising by 1.1 percent.

The small-cap benchmark has struggled this year, but it's been showing signs of life lately. Since bottoming out a little over a month ago, on October 13, the Russell 2000 has added an impressive 10 percent. But given the troubles it had earlier in the year, it's still up less than 1 percent for 2014 as a whole.

Remember, the S&P 500 and Dow Jones, by definition, don't include any smaller stocks. For a full picture of the market, it's important to keep that Russell 2000 in mind. And it's good to see it coming around.

Thursday, November 20, 2014

Banking on Honesty

Does banking make a person dishonest? That's the suggestion from a study published in the journal Nature this week. Researchers at the University of Zurich divided 128 employees at a large, international bank into two groups. One filled out a survey about their personal lives, and the other answered questions about their banking background.

They were then asked to toss a coin 10 times, without anyone watching, and report on the results. If they told researchers they guessed correctly on a toss, they collected $20 for each correct answer. The people who’d been asked about their personal lives said they won 51.6 percent of tosses, but those who talked about their banking jobs said they won 58.2 percent of the time. In the group of bankers told to think about their jobs, 8 percent reported winning all ten tosses, compared with 3 percent in the other group.

The researchers repeated the experiment was repeated with 133 employees at other companies and 222 university students. For those people, talking about money had no effect on their dishonesty.

Wednesday, November 19, 2014

Trouble Among the Young

Even though the unemployment rate has been dropping steadily this year, the aftereffects of the recession are still making it difficult for young workers to find stable, full-time work. The recession technically ended five years ago now, but most people aged 18 to 30 remain pessimistic or uncertain about their future employment prospects, according to a Federal Reserve survey published Tuesday.

According to the survey, 34 percent of younger workers said they were unsure of their future employment outlook, and another 21 percent said they were pessimistic. Just 45 percent said they were optimistic.

A look inside the unemployment numbers can help explain their fears. While the overall unemployment rate is at 5.8 percent, the jobless rate for Americans between the ages of 25 and 34 was 6.1 percent. And the unemployment rate for those aged 20 to 24 was all the way up at 10.1 percent.

Tuesday, November 18, 2014

Inflation Staying Cool?

The Federal Reserve Bank of Philadelphia released a report yesterday showing that many major economists have lowered their inflation forecasts, down even from the tepid level it's been at. The Fed's Survey of Professional Forecasters indicates that inflation will stay below the Fed's target rate of 2 percent through at least 2016.

The surveyed forecasters predict the Personal Consumption Expenditures price index will average 1.5 percent for this year, down from their 1.8 percent estimate of three months ago. The group also reduced their view of expected inflation next year from 2 percent to 1.8 percent, and from 2.0 percent in 2016 to 1.9 percent.

Annual inflation is currently running at 1.4 percent. Many economists feared that the Fed's asset-buying program might lead to higher inflation, so with that now coming to an end, it appears that our already-low inflation has nothing left to fuel a higher run.