Annuity Income Riders - Are They Worth the Cost?
|
The Markets
After Alcoa's strong report unofficially kicked off the Q2 earnings
season, domestic equities rebounded from two down days. However,
investors decided to take advantage of equities' recent record levels
and take some profits after revelations about a banking problem in
Portugal revived concerns about Europe's financial sector. Meanwhile,
the spot price of oil, which had spiked to $107 two weeks ago, ended the
week just over $100 a barrel.
Last Week's Headlines
- The Federal Reserve currently expects
its bond purchases to end in October, according to minutes of the most
recent Federal Open Market Committee meeting. However, the minutes also
reiterated that the end of bond-buying won't automatically mean higher
interest rates, at least not for a "considerable time." The Fed also
will continue to reinvest the proceeds of maturing bonds it already
holds until after it acts on rates.
- Talks aimed at trying to address
U.S.-China differences over Chinese currency policies began. The United
States contends that those policies have kept the yuan artificially low,
giving Chinese companies an unfair pricing advantage. Meanwhile,
Chinese exports were up 7.2% in June from a year earlier, according to
China's General Administration of Customs.
- A major Portuguese lender's failure to
make payments on some of its short-term debt raised concerns once again
about the stability of European banks and the possibility of contagion.
Banco Espirito Santo has been known to be struggling since December,
but investor reaction to the disclosure caused several other European
companies to postpone bond offerings.
Eye on the Week Ahead
Q2 earnings reports from some major financial and tech companies, due
next week, could influence investor thinking about whether Q1's
discouraging GDP really has given way to renewed growth. Housing and
inflation data also are likely to be closely watched.
Data sources: Economic: Based on
data from U.S. Bureau of Labor Statistics (unemployment, inflation);
U.S. Department of Commerce (GDP, corporate profits, retail sales,
housing); S&P/Case-Shiller 20-City Composite Index (home prices);
Institute for Supply Management (manufacturing/services). Performance:
Based on data reported in WSJ Market Data Center (indexes); U.S.
Treasury (Treasury yields); U.S. Energy Information
Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing,
OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency
exchange rates). All information is based on sources deemed reliable,
but no warranty or guarantee is made as to its accuracy or completeness.
Neither the information nor any opinion expressed herein constitutes a
solicitation for the purchase or sale of any securities, and should not
be relied on as financial advice. Past performance is no guarantee of
future results. All investing involves risk, including the potential
loss of principal, and there can be no guarantee that any investing
strategy will be successful.
The Dow Jones Industrial Average
(DJIA) is a price-weighted index composed of 30 widely traded blue-chip
U.S. common stocks. The S&P 500 is a market-cap weighted index
composed of the common stocks of 500 leading companies in leading
industries of the U.S. economy. The NASDAQ Composite Index is a
market-value weighted index of all common stocks listed on the NASDAQ
stock exchange. The Russell 2000 is a market-cap weighted index composed
of 2,000 U.S. small-cap common stocks. The Global Dow is an equally
weighted index of 150 widely traded blue-chip common stocks worldwide.
Market indices listed are unmanaged and are not available for direct
investment.
|