Market Update – July 10, 2012

Here are some of the stats and thoughts that I found interesting in my Monday reading…

1. Euro zone ministers agreed to give Spain an extra year until 2014 to reach its deficit reduction targets.  They also said that once a single European banking supervisor is set up next year, Spanish banks could be directly recapitalized from the euro zone rescue fund without requiring a state guarantee.

2. According to the Federal Reserve, borrowing via credit cards, car loans, student loans and other types of debt jumped at a seasonally adjusted 8% annual rate to $2.57 trillion in May from April. The increase included a surge in credit-card use, which jumped at a seasonally adjusted 11.2% annual rate, the highest since late 2007.  Mortgages aren’t included in the report.

3. According to Reuters, economists at top Wall Street firms put the chance of a new round of quantitative easing at about 70 percent, up from 50 percent on June 20.

4. Median compensation for CFOs in the S&P 500 increased 2.1% last year to $3.3 million.  An earlier Wall Street Journal review showed chief-executive pay rose 2.8% last year.  The prior year showed a 17% increase for CFOs (as financial markets recovered).

5. Corn futures (for July delivery) increased 4% to $7.7525 a bushel.  Corn prices have increased 29% in the past three weeks.  This is due to heat and lack of rain. The record for corn prices was $7.9975 a bushel in June 2011 (flood damage).  Temperatures averaged from 10 to 15 degrees above normal in the Midwest last week, hitting triple-digit readings for 10 days in a row in St. Louis, Mo.

6. As of last week, about 60% of U.S. corn acreage was experiencing moderate to extreme drought, up from 49% a week earlier, according to the U.S. Department of Agriculture. Moderate drought indicates dryness levels that occur once every five to 10 years, while extreme drought occurs every 20 to 50 years.

7. January to June 2012 was the warmest first half year of any year on record for the contiguous United States.  The average temperature was 4.5 degrees above the normal average.  Every state across the contiguous U.S. had warmer than average temperatures, except Washington.

Taxes

1. President Obama proposed a one-year extension of President Bush’s tax cuts for families earning less than $250K.  But, he would let rates increase for higher income Americans.

2. Under the President’s plan, the top marginal tax rates would rise to 36% and 39.6%—up from the current 33% and 35%—on that portion of adjusted gross income above the $250,000 threshold for families and $200,000 for individuals.

3. The White House said the President’s plan would bring in $65 billion in additional government revenue next year from higher taxes paid by the top 2% of tax filers.

4. The nonpartisan Tax Policy Center estimates that roughly 1.25 million tax filers are in the brackets that would be affected.

5. President Obama would set a new 30% minimum rate for families earning more than $1 million.

6. Governor Romney wants to maintain President Bush’s tax cuts for everyone and then reduce the rates by another 20%.

7. President Obama also wants to lower the top corporate tax rate to 28% from 35% and eliminate or limit a number of tax breaks.

8. Governor Romney wants to reduce the top corporate income-tax rate to 25%, eliminate the estate tax and eliminate capital-gains taxes for families making less than $200,000.

9. A Wall Street Journal/NBC News Poll sums it all up.  It showed that 76% of Republicans said that the government is doing too much and 75% of Democrats said that government is doing too little.

Random Stat Hotline…

1. A new study says that sitting down for more than three hours a day can reduce a person’s life expectancy by two years, even if he or she is physically active and refrains from dangerous habits like smoking.  Who doesn’t sit down for more than three hours per day?

2. Watching TV for more than two hours a day can decrease life expectancy by another 1.4 years.  (On a related note, I might jump off a building if NBC tries to convince me to watch gymnastics during the Olympics.)

3. Last year, scientists found that people who worked ten years in jobs that don’t require a lot of energy expenditure had twice the risk of colon cancer and a 44% increased risk of rectal cancer, compared with people who had never worked sedentary jobs.

4. About 22 percent of American marriages have a higher earning wife.

5. According to the International Shark Attack File at the University of Florida, there were 75 unprovoked shark attacks on humans last year worldwide, resulting in 12 fatalities. The United States had the most attacks (29), but none was fatal.

Have a great week.

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