The Markets

When is bad news good news? Take a look at last week.
Major stock indices in the United States hit all-time highs on Friday, despite a lackluster employment report and a surge in COVID-19 cases, reported Lewis Krauskopf of Reuters. During the week, we saw:

• The slowest jobs growth since the economic recovery began. The Bureau of Labor Statistics reported 245,000 jobs were created in November. “…a key sign of holiday enthusiasm – the hiring of thousands of workers to help with the holiday retail rush – simply didn’t happen this year. Some of those workers – but clearly not enough – are helping with online shopping duties, filling warehouses around the country, or driving vans from house to house,” reported Avi Salzman of Barron’s.
• New unemployment claims remain steady. More than one million people a week are filing first time jobless claims, reported Dion Rabouin of Axios. On November 14, more than 20 million Americans were receiving unemployment assistance.

It’s difficult to know how much weight to give this data since the Government Accountability Office shared weekly unemployment insurance estimates issued by the Department of Labor “… have potentially both overestimated and underestimated the total number of individuals actually claiming unemployment insurance…due to state backlogs in processing claims and other data issues…”

• COVID-19 cases spiked across the United States. Coronavirus-related deaths hit a one-day record last week, and “…hospitalizations surpassed 100,000 for the first time this week, leaving hospitals in some regions of the country without enough beds in intensive-care units to meet their patients’ needs,” reported Melanie Evans of The Wall Street Journal. This is undermining consumer confidence and depressing economic activity.

In light of this news, why were markets bullish?
Signs the economic recovery is faltering create a strong incentive for Congress to pass a stimulus bill in 2020 instead of delaying until next year, reported Barron’s. An analyst cited by the publication said, “Under the circumstances, it is hard to be a seller of any risk asset as long as there is a good possibility of getting a deal done…”
During the next few months, markets may be quite volatile. Hang tight and keep your eyes on your long-term financial goals.

What Does It Take To Be Middle Class In The United States?

The not-so-simple answer is it depends on how you define ‘middle class.’
In a 2018 report, Pew Research Center defined middle class as middle income. “In our analysis, “middle-income” Americans are adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. In 2016, the national middle-income range was about $45,200 to $135,600 annually for a household of three.”
In November, USA Today shared an analysis by Michael Sauter that adopted a different standard. It considered U.S. family income from “…the lower boundary of the second quintile and the upper boundary of the fourth quintile [of the U.S. Census Bureau’s 2018 American Community Survey], representing in total 60 percent of American families…The analysis made some cost-of-living adjustments and found, “…the range of income that could be considered middle class in a given state.”
In the states with the highest median (the number in the middle of the list) family incomes, middle-class income ranged from:

• Massachusetts: $35,233 to $188,259
• New Jersey: $39,920 to $197,868

States in the middle of the pack for median family income had these middle-class income ranges:

• Wyoming: $25,760 to $111,422
• Kansas: $24,741 to $105,573
• Iowa: $24,663 to $101,008

In the states with the lowest median family incomes, the middle-class income range was:

• West Virginia: $17,452 to $85,516
• Mississippi: $15,165 to $81,480

It’s interesting to note the 2020 federal poverty threshold set by the U.S. Department of Health and Human Services, which determines eligibility for various federal programs, was $26,200 for a family of four.
Not everyone uses income to define the middle class. Richard V. Reeves, Katherine Guyot, and Eleanor Krause of Brookings explored the question, asking:
“Is middle-class status a reflection of economic resources, especially income or wealth? Or is it denoted more clearly by occupational status and/or educational attainment? Is it, rather, a state of mind, a set of aspirations, or revealed through behavior, cultural tastes, or by certain kinds of consumption? Is it a question of how we define ourselves?”
What do you think?

Words of Wisdom: Tony Hsieh, former Zappos CEO, has Died but his Words Live On

The world recently lost Tony Hsieh, a shining star who took customer service at Zappos to the ultimate level. When Tony became Zappos CEO in 1999, the general public was reluctant to buy online. But Hsieh made the experience so fantastic, people no longer worried about the process of buying online. Instead, they were blown away by it.
What was so special about Hsieh’s approach? He led the company to being totally customer-centric by offering free shipping, free returns, live chat, and employees who were empowered and encouraged to be creative in solving any customer issues.
Hsieh’s wisdom was published in Delivering Happiness, his 2010 business management book. Here are some of his words of wisdom that match how we feel about the client care we provide at BW:
“Your personal core values define who you are, and a company’s core values ultimately define the company’s character and brand. For individuals, character is destiny. For organizations, culture is destiny.”
“See what happens when you challenge your employees to bring all of their talents to their job and reward them not for doing it just like everyone else, but for pushing the envelope, being adventurous, creative, and open-minded, and trying new things?”
“No matter what your past has been, you have a spotless future.”
“We must all learn not only to not fear change, but to embrace it enthusiastically and, perhaps even more important, encourage and drive it.”
“When you walk with purpose, you collide with destiny.”