A Roaring Start to Earnings Season!

Corporate earnings season has begun, and the results are turning heads on Wall Street.

Of the 120 companies in the S&P 500 index that reported numbers as of Friday, July 23, 89% of them beat the Street’s earnings-per-share estimates by an average of nearly 21%.¹

The robust results are leading Wall Street analysts to raise estimates for the third and fourth quarters as well as the first-quarter 2022.¹

Earnings season occurs four times a year, and it’s the time when a majority of publicly traded companies release their quarterly financial reports. Companies often go into great detail about their business, and some provide guidance about what lies ahead.

Typically, earnings season starts several weeks after the calendar quarter comes to a close. For example, the second quarter’s earnings season began in mid-July, and the majority of companies are expected to release their earnings over the next six weeks.²

If you hear any confusing commentary, please give us a call. We always welcome the chance to talk about what earnings may be saying about the overall economic outlook.

A 6.1% Bump in Social Security?

The news keeps getting better for Social Security recipients. It’s now projected that benefits will increase 6.1% in 2022, up from the 4.7% forecast just two months ago. That would be the most significant increase since 1983.^1,2

It’s all about inflation. Social Security cost of living adjustments (COLA) are based on the consumer price index, which rose 5.4% in June — its largest 12-month increase since 2008. The official announcement is expected in October and, once it’s confirmed, the revised payment will go into effect in January 2022.³

More than 65 million Americans receive Social Security, and the annual cost of living adjustments are designed to help recipients manage higher costs. At the start of 2021, recipients saw a 1.3% increase.⁴

The average monthly benefit is $1,544 for retired workers. So a 6.1% increase amounts to $94 more a month. That might not be quite enough for a car payment, but it’s double the 3% raise being given to U.S. workers in 2021.^4,5

Social Security can be confusing. One survey found only 6% of Americans know all the factors that determine the maximum benefits someone can receive. If you have any questions, please reach out. We have a number of resources at our fingertips that you may find helpful.⁶

Conducting Your Mid-Year Financial Checkup

With June officially behind us, it’s time to face the facts: we’re headed toward the second half of 2021. While there’s still plenty of time to enjoy the rest of summer, we encourage you to slow down and check up on your financial well-being.

Review your budget: Your spending habits likely look different now than they did in 2020, but did you adjust your yearly budget accordingly? The second half of the year can be expensive, between the holiday season and back-to-school spending. Take some time now to prepare.

Check your credit score: If you plan on moving, purchasing a car, or taking out a personal loan this year, you’ll want your credit score in good shape. Your score could have been impacted by recently accrued debt, late payments, hard credit inquiries, identity theft, and more.

Prepare for advanced tax credits: If your family is eligible, you may begin receiving advanced child tax credits in July. Families who qualify are expected to receive six installments via direct deposit or mailed check. If you anticipate getting the credit, you may want to talk it over with your tax professional.

With 2021 looking different than last year, take some time to evaluate your financial standings as we prepare for the second half of the year. Remember, we’re always here if you need assistance reassessing or working towards your financial goals.

Economic Lessons from Used-Car Inflation

Inflation is defined as the general upward price movement of goods and services in an economy. The key word is “general.”

Inflation tends to be uneven and affects the price of some items more than others.
If you’ve been in the market for a used car, you’ve learned a critical economic lesson about the “uneven” side of inflation. The overall rate of inflation has been 5% for the past 12 months. Meanwhile, the average price of a used car is up 30% from a year ago.^1,2

Various factors drive used car prices, but most of the trouble links to the global microchip shortage.³

Demand for used cars may well slow later this year as automakers return to normal production levels. As the market shifts, some people who bought used cars may learn another key economics lesson: they might owe more for their car than what it’s worth as prices return to historical levels.⁴

The most important takeaway is that inflation touches our lives in different ways. Gasoline prices are up sharply from a year ago, but you might not feel the increase if you work from home or are retired. However, at the grocery store, all shoppers are paying higher prices for everything from beef to pork to milk.⁵

If all the recent inflation talk has you uneasy, please contact our offices. We’d welcome the chance to hear about your experience with higher prices.