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DailyFinance.com

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    Inside The Life Fitness Manufacturing Facility Ahead of Durable Goods Orders
    Luke Sharrett/Bloomberg via Getty Images
    By MARTIN CRUTSINGER

    WASHINGTON -- Orders to U.S. factories for big-ticket manufactured goods posted a sizable gain in June, but the advance was fueled by higher demand for commercial aircraft. Outside of this volatile category, a key category that represents business investment rose by a far more modest amount.

    Orders for durable goods jumped 3.4 percent in June from May, when orders had fallen 2.1 percent, the Commerce Department reported Monday. The gain was the best result since March. However, the jump was driven by aircraft orders booked by Boeing (BA) at the Paris air show.

    A category viewed as a proxy for business investment plans rose a slower 0.9 percent. While this was the strongest showing since March, it followed two months of declines. Through the first six months of this year, demand in the investment category is running 3.4 percent below the same period a year ago.

    The category has been weak for months and has dragged activity in the overall manufacturing sector. Total orders for durable goods, items expected to last at least three years, are running 2 percent lower through the first half of this year compared to the first six months of 2014.

    U.S. manufacturers have struggled this year from the effects of a strong dollar and a plunge in energy prices. The higher value of the dollar against foreign currencies makes U.S. goods more expensive and less competitive in major export markets, while the lower oil prices have led energy companies to scale back investment plans.

    Jennifer Lee, senior economist at BMO Capital Markets, described the June results as a "glimmer of hope" that may point to "stronger business investment as the second half begins."

    Some economists believe a modest rebound in manufacturing will emerge as strong employment gains help lift consumer spending, which accounts for 70 percent of economic activity. But other analysts are concerned that problems weighing on the global economy, such as the Greek debt crisis and a big drop in the Chinese stock market, will keep a lid on export sales.

    "There is enough growth in the U.S. economy to suggest that manufacturing output gains will be positive for the balance of 2015 and into 2016, but factory sector performance will likely be sluggish and volatile," said Cliff Waldman, director of economic studies for the MAPI Foundation, a manufacturing research group.

    The overall economy stalled in the January-March quarter, with the gross domestic product shrinking at an annual rate of 0.2 percent. Analysts blamed that weakness on a number of temporary factors including a harsh winter. They expect growth to rebound to around 2.5 percent in the April-June quarter. The government will release its first estimate of GDP growth in the spring on Thursday.

    For June, demand for aircraft shot up 66.1 percent, recovering from a 31.6 percent plunge in May. Overall demand for transportation goods increased 8.9 percent. Excluding this often volatile category, orders were up 0.8 percent in June, the best showing outside of transportation in 10 months.

    The 0.9 percent gain for non-defense capital goods orders excluding aircraft, the category used as a proxy for investment, followed a decline of 0.4 percent in May.

    Orders for machinery were up 1.4 percent, while demand for computers and related products shot up 9.1 percent.

     

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    Wall street, New York, USA.
    Alamy
    Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets.

    Let's go over some of last week's best and worst performers.

    Inotek Pharmaceuticals (ITEK) -- Up 246 percent last week

    The market's biggest winner was Inotek, which saw its stock more than triple after announcing favorable phase 2 clinical trials for its promising glaucoma drug. Inotek laid out its strategy in tackling the third and final phase of the approval process.

    At least one Wall Street pro is buying into the story. Cowen & Co.'s Ken Cacciatore bumped his price target on the shares to $40 from $15. This is a pretty big move for a stock that hadn't done much since going public five months ago.

    Pandora Media (P) -- Up 14 percent last week

    A better-than-expected quarterly report sent shares of Pandora higher. Revenue rose 30 percent since the prior year, just ahead of the streaming music provider's guidance. Its adjusted profit of 5 cents a share was more than double what analysts were forecasting.

    It's a strong quarter for Pandora and it comes at a great time. Competition has been heating up in digital music, with Spotify gaining ground and Apple Music relaunching. Pandora is proving that it can do more than merely hold its ground.

    Ambarella (AMBA) -- Up 12 percent last week

    Another big winner was Ambarella, gaining ground after wearable camera maker GoPro (GPRO) came through with a blowout report Tuesday. Ambarella provides the video chips used by GoPro and Wall Street made the connection.

    Canaccord Genuity raised its estimates on Ambarella following GoPro's encouraging report. It also boosted its price target to $122 from $120, pointing out that Ambarella's differentiated processors give it a significant lead in a historically cutthroat niche. It also sees strong potential in the drone market. GoPro itself moved 10 percent higher on the week, but Ambarella was the one with the bigger pop.

    Xoma (XOMA) -- Down 79 percent last week

    The market's biggest winner may have been a biotech, and the same can be said of its biggest loser. Xoma shed nearly four-fifths of its value after a doomed clinical trial.

    Xoma had high hopes for gevokizumab, a potential treatment for eye symptoms associated with the rare Behcet's disease that results in the inflammation of blood vessels. A late-stage trial of the treatment failed to meet the study's primary endpoint. Xoma tried to offset the devastating news by pointing out that it noted preserved visual acuity, less severe ocular exacerbations and a reduced incidence of reported macular edema, but ultimately it failed to meet its main objective.

    There was a lot riding on the drug, and that's now obvious given the market's reaction to the clinical trial's failure.

    TrueCar (TRUE) -- Down 38 percent last week

    Shares of TrueCar plunged into the single digits after posting preliminary quarterly results that proved problematic. TrueCar provides haggle-free pricing on cars, arming consumers with the average price paid on desired vehicles through a growing number of participating dealers.

    TrueCar is lowering its guidance for all of 2015, and while the low end of its new revenue forecast calls for top-line growth of at least 21 percent, it suggests that revenue for the second half of the year will slow to 14 percent. It's not the trend that investors like to see, leading the market to wonder if auto sales in general are slowing or if it's TrueCar's own platform that's struggling.

    Angie's List (ANGI) -- Down 32 percent last week

    Angie's List slipped after posting quarterly results. The subscription-based website that offers vetted reviews of local service providers posted a quarterly loss on lower-than-expected revenue. That's worrisome to investors because they were already fretting about Angie's List's viability in a world where social media and crowd-sourced review sites offer guidance for free.

    Motley Fool contributor Rick Munarriz owns shares of Ambarella. The Motley Fool recommends Ambarella, GoPro, Pandora Media and TrueCar. The Motley Fool owns shares of Ambarella, GoPro and Pandora Media. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    Netflix Inc. Illustrations Ahead Of Earnings Figures
    Andrew Harrer/Bloomberg via Getty Images
    Netflix (NFLX) investors were cheering another blowout quarterly report last week, but it didn't take long for Netflix customers to start worrying. Several popular sites began running stories suggesting that it was going to start costing more to enjoy the leading premium video service in the near future.
    Here's just a sample of some of the headlines.
    • Netflix Just Announced Some Pricing News That Will Leave You Heartbroken -- Uproxx
    • Netflix CEO: Brace for Higher Prices -- Daily Beast
    • Upcoming Netflix Price Hike Is Breaking Many Cord-Cutters' Hearts -- Tech Times
    • This Netflix News Will Leave You in Tears -- Seventeen Magazine
    This would seem to be devastating news. Outlets are playing this out as a tear-inducing, heart-shattering event that you will need to brace for in preparation. Thankfully, it's not that bad. You will likely be paying more for Netflix in the future, but it's not going to be as traumatic as the media would have you believe.

    Get to Know Your Grandfather a Little Better

    Longtime subscribers may very well be paying more as early as next year, but that's not exactly news. Netflix bumped the monthly rate of its popular streaming plan to $8.99 a month from $7.99 a month for new subscribers 14 months ago.

    If you're still paying $7.99 a month, that means that you've been an active subscriber since springtime of last year. Netflix promised to grandfather in existing members at the time, through at least the next two years. In other words, your rate may go to $8.99 come May of next year, but you should have known that for more than a year.

    House of Shards

    The headlines following last week's report suggest a big hike is coming, but that wasn't what CEO Reed Hastings said at all.

    Over the next decade, I think we'll be able to add more content and have more value and then price that appropriately.

    "We want to take it very slow," was what he said in addressing how his company may pass on the escalating costs of content to its viewers. "Over the next decade, I think we'll be able to add more content and have more value and then price that appropriately."

    So let's break that down. He's not talking about pricing a better product higher now. He's talking about something that will happen over the next 10 years. If anything, it's pretty comforting to hear. Unlike your cable or satellite television bill, which seems to creep higher with every passing year for the exact same product, another price hike could be years away and only when the quality has improved to justify the move.

    It also bears reminding that Netflix now has more than 65 million streaming subscribers worldwide. As it continues to grow, it will be able to spread its growing content costs across a wider membership base. It isn't until Netflix's subscriber count starts to shrink that you should get nervous or brace for a material hike. Netflix knows that its model is based on growing its audience, and the last thing it wants to do is price itself out of that growth.

    Dig beneath the inflammatory headlines. Take a deep breath. Binge.

    Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    Federal Reserve Yellen
    Manuel Balce Ceneta/APFederal Reserve Chair Janet Yellen
    By MARTIN CRUTSINGER

    WASHINGTON -- The Federal Reserve is getting close to raising interest rates for the first time in nearly a decade, perhaps in September. When it meets this week, though, don't expect any timetable for a rate hike to be spelled out in a post-meeting statement. For now, the Fed wants to keep its options open.

    Yet Chair Janet Yellen has left little doubt that the Fed is preparing to raise short-term rates by year's end from the record lows the central bank set at the depths of the 2008 financial crisis. With the U.S. economy and job market now steadily rising, the need for ultra-low rates to stimulate growth is fading.

    We're close to where we want to be, and we now think the economy can not only tolerate but needs higher rates.

    "Our economy is in a much better state," Yellen told Congress earlier this month. "We're close to where we want to be, and we now think the economy can not only tolerate but needs higher rates."

    The economy still faces an array of threats, from subpar U.S. manufacturing and business investment to troubles in Europe and Asia, which have roiled financial markets. Inflation also remains below the Fed's target rate. And while the unemployment rate, at 5.3 percent, is nearly normal, other gauges of the job market remain less than healthy. Pay growth remains generally sluggish, for example, and many people are working part time because they can't find full-time jobs.

    But Yellen has stressed that when the Fed begins to raise rates, it will do so only gradually. The idea is to avoid weakening an economy that's still benefiting from low borrowing rates resulting from the Fed's policies.

    Yellen has suggested that raising rates in small increments, followed by pauses, would let the Fed assess the effects of slightly higher rates. Higher rates would also allow the Fed to respond later to any weakening of the economy by cutting rates again.

    Though many economists foresee the first rate hike in September, when Yellen is scheduled to hold a news conference, others think the Fed might wait until December. On Wednesday, after its latest meeting ends, the Fed will issue only a statement.

    Volatile Markets

    "The recent volatility in the global economy and financial markets has given the Fed pause," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University, Channel Islands. "I think the probability of a rate hike in September has diminished because the Fed is going to need more time to evaluate how the U.S. economy is doing. December looks like a good possibility."

    During Yellen's testimony to Congress this month, some Democrats urged her to consider delaying a rate hike given that inflation remains below the Fed's 2 percent target. The Fed has typically raised rates when it perceives a need to prevent inflation from getting out of control.

    Part of the slowdown in inflation, though, reflects a plunge in oil prices over the past year, which will reverse itself once energy prices rebound.

    The Fed is closer to achieving its other main goal: Maximizing employment. The unemployment rate is at a seven-year low, and over the past three months, U.S. hiring has averaged a robust 221,000 a month.

    Economists who think the Fed will act in September point not only to low unemployment but also to signs of strength in such areas as housing and consumer spending.

    'Lots of Momentum'

    "The economy has a lot of momentum, and if you don't start raising rates off zero, then it will be hard to curtail that momentum and inflation will become a problem down the road," said Mark Zandi, chief economist at Moody's Analytics.

    There's also some concern that prolonged ultra-low rates may have begun to inflate dangerous bubbles in certain assets.

    "The longer the Fed waits, the greater the bubbles will become in stock and bond prices and the more potential damage that could occur to the markets when the Fed finally acts," said economist David Jones, the author of several books on Fed policy.

    Concern about igniting an overreaction in financial markets is a key reason economists think the Fed will show extreme caution in raising rates. Stocks and bonds suffered sharp declines in 2013 after the Fed initially mishandled its communications about when it would begin slowing a bond purchase program that was intended to keep long-term rates low.

    "It has been so long since the Fed raised rates that the situation could be volatile," said Diane Swonk, chief economist at Mesirow Financial. "I believe the Fed is going to raise rates once, most likely in September, and then wait for some time before raising them again to judge market reaction."

     

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    NYSE Opens After Chinese Markets Take Massive Plunge
    Spencer Platt/Getty Images
    By Noel Randewich

    NEW YORK -- Wall Street sank Monday, with the Nasdaq losing almost 1 percent after the steepest decline in Chinese stocks in eight years increased concerns that cooling growth in the world's No. 2 economy could hurt China's trading partners.

    The Dow Jones industrial average finished at its lowest since February, the Nasdaq composite hit a four-week low and the benchmark S&P 500 ended at its lowest in over two weeks. In an additional negative sign, 480 stocks hit 52-week lows on the New York Stock Exchange, the most in one day since Oct. 15.

    After Chinese stocks plunged more than 8 percent, the top securities regulator said Beijing would keep buying shares to stabilize the market as an unprecedented rescue plan already in place appeared to sputter.

    U.S.-listed shares of Chinese companies slid, including Alibaba (BABA) and Baozun (BZUN).

    It's hard to assess whether China single-handedly can deep-six the market.

    Commodity prices resumed a downward spiral, with the Thomson Reuters CRB commodities index hitting a six-year low and oil a four-month low.

    "It's hard to assess whether China single-handedly can deep-six the market," said Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana. "A significant slowdown in China impacts not just the U.S. but global players as well."

    The Dow Jones industrial average (^DJI) fell 0.7 percent to end at 17,441.79 points. The Standard & Poor's 500 index (^GSPC) lost 0.6 percent to end at 2,067.75. The Nasdaq composite (^IXIC) dropped 1 percent to 5,039.78.

    Nine of the 10 major S&P 500 sectors were lower, with the energy index's 1.4 percent fall leading the decliners.

    Corporate Earnings

    With second-quarter reports well under way, analysts expect overall earnings of S&P 500 companies to drop 0.3 percent and revenue to decline 3.9 percent, according to Thomson Reuters (TRI) data.

    Such results could inflate already relatively pricey valuations. The S&P 500 trades near 16.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

    "Valuations are a concern right now," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas. "We really need to see corporate revenue growth."

    The main event for U.S. markets this week is likely to be the two-day Federal Reserve meeting, the last before September, which still looms as the first possible date for an interest rate increase.

    Teva Pharmaceutical's (TEVA) shares jumped 16.4 percent to a record high of $72 after it agreed to buy Allergan's generic drug business for $40.5 billion, giving up on its bid to buy Mylan. Allergan (AGN) rose 6.1 percent while Mylan (MYL) fell 14.5 percent.

    Fiat Chrysler (FCAU) fell 4.9 percent after a U.S. auto safety watchdog announced a $105 million fine against the automaker over lapses in safety recalls.

    On the NYSE, 2.73 stocks fell for every one that rose. On the Nasdaq, decliners outnumbered gainers 2.47 to 1.

    The S&P 500 index posted 3 new 52-week highs and 58 lows; the Nasdaq composite saw 21 new highs and 246 lows.

    -Tanya Agrawal contributed reporting.

    What to watch Tuesday:
    • Standard & Poor's releases the S&P/Case-Shiller home price index for May at 9 a.m. Eastern time.
    • The University of Michigan releases its final survey of consumer sentiment for July at 10 a.m.
    Earnings Calendar
    These selected companies are scheduled to release quarterly financial results:
    • Aflac (AFL)
    • Ally Financial (ALLY)
    • BP (BP)
    • Corning (GLW)
    • D.R. Horton (DHI)
    • DuPont (DD)
    • Express Scripts (ESRX)
    • Ford Motor Co. (F)
    • Gilead Sciences (GILD)
    • JetBlue Airways (JBLU)
    • Merck & Co. (MRK)
    • Pfizer (PFE)
    • Reynolds American (RAI)
    • Sirius XM Holdings (SIRI)
    • Twitter (TWTR)
    • UBS (UBS)
    • United Parcel Service (UPS)
    • Wyndham Worldwide (WYN)

     

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    Couple sitting in the living room doing online banking
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    Investors looking to add some global sizzle to their portfolios without having to pack a passport often turn to mutual funds to gain international exposure. It's happening in a major way these days. Investors may have poured a net $35 billion into domestic stock funds last year, but that's nothing compared to the net $228 million put to into play in international funds according to industry tracker Investment Company Institute.

    Should you follow the herd overseas? The rewards could be substantial, but the same can also be said about the risks. Let's go over some of the things to keep in mind before going global with your portfolio.

    The Good

    The chief arguments in favor of mutual funds in general -- instant diversification with a single investment, seasoned money management calling the shots and reasonable liquidity -- also apply to international stock funds.

    Another major advantage is that investors don't often have easy access to researching and buying overseas companies. There are plenty of foreign companies that trade on stateside exchanges, but international funds often go directly to the underlying markets to buy from a wider pool of stocks. Paying for professional money managers who devote their time to researching international stocks is also a strong selling point for stateside investors, even those who prefer to pick domestic stocks on their own.

    The Bad

    There is a price to pay for proven money management, and that comes in higher fees than typical mutual funds. Investors in international stock funds faced an average expense ratio of 1.47 percent in 2013, according to premium research provider Morningstar (MORN). That's quite a bit more than the 1.25 percent average being shelled out by investors in U.S. equity funds. That may not seem like a big difference: We're talking about $22 a year in management expenses for every $10,000 invested. However, it does add up over time.

    The Ugly

    The pursuit for exotic returns also often comes with exotic risks. Investors learned that the hard way when the strong dollar ate into the returns of funds buying into overseas stock markets. The euro crisis and setbacks in Asia also stung results. The average large-cap international fund surrendered 4.8 percent of its value. That doesn't stack up very favorably to the S&P 500's (^GSPC) better than 13 percent return.

    There's also great volatility for international investors, particularly for those buying into country-specific funds. One of last year's hottest regions for investors was India, but India-focused stock funds were the worst performers during the most recent quarter.

    Since many international funds don't actually hedge against currency risk, it's often a wild ride.

    So, yes, there are some legitimate advantages to buying into international mutual funds. You get seasoned management that researches foreign equities for a living. That's valuable, but with few exceptions that exposure also carries greater risks.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    Worried couple working on personal finances
    Getty Images
    By Lauren Lyons Cole

    NEW York -- American students spend about 1,000 hours in school each year, and yet very few, if any, of those hours are dedicated to learning about personal finance. It should come as no surprise then that U.S adults perform poorly when quizzed on basic financial concepts like interest rates and inflation. Only 22 percent of women and 38 percent of men aced a three-question test conducted by the Global Financial Literacy Excellence Center. Among people under age 35 the numbers are even worse. Only 12 percent of women and 26 percent of men correctly answered all three questions.

    "There is substantial evidence that more financially savvy people are more likely to plan, save, invest in stocks, and accumulate more wealth," according to a report published recently by the Global Financial Literacy Excellence Center. "They also have been shown to be less likely to have credit card debt, and when they do borrow, they manage loans better, paying off the full amount each month rather than just the minimum due."

    When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes.

    Clearly, financial education is an important component of developing economic independence. According to the report's authors, Olivia S. Mitchell and Annamaria Lusardi, "more than one-third of U.S. wealth inequality could be accounted for by differences in financial knowledge."

    That number could be even higher than one-third. According to the Survey of Consumer Finances, 46.7 percent of American households carry credit card debt. A Bankrate study found that a similar proportion of Americans, 48 percent, isn't investing in the stock market.

    "When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes," the authors write. "In turn, these difficulties can spill over to their families and the rest of the economy."

    Much work remains to be done, but Americans are open to learning more. According to the report, consumers would trade 3 percent of their consumption over the course of their lifetime to gain the financial knowledge needed to improve their overall well-being. They can begin their efforts in three areas:

    Understanding How Interest Rates Work

    Not all debt is created equal. Interest rates are the most important factor to consider when deciding how to prioritize a debt repayment plan. Many Americans are stressed about student loans, but the majority of interest rates for education debt range from 3 to 8 percent. A borrower who is also carrying credit card debt with an interest rate of 15 percent, should prioritize putting extra cash toward the credit card debt, while making the minimum student loan payment. Over time, this strategy will minimize the total amount of money spent paying off debt.

    Overcoming a Fear of Investing

    The recent recession has left many people, especially young people, afraid of investing. Historically, the stock market is the best way to ensure account balances grow at a rate that outpaces inflation. For gun-shy investors, choosing a target date mutual fund is a perfectly good place to start. Target date funds rebalance regularly to manage risk and return in relation to age. Not investing at all is likely to result in a retirement funding shortfall that could potentially be debilitating.

    Making More to Save More

    Wages have been stagnant in recent years, leaving it difficult for many people to save money. Cutting expenses can only go so far. The single best way to have more money is to make more money. According to a study from Salary.com, 44 percent of American workers never negotiate their salary during performance reviews. This adds up to hundreds of thousands of dollars in lost income during one's working years. Employees aren't the only ones suffering from a lack of financial knowledge. Preliminary research from the Global Financial Literacy Excellence Center indicates that there may also be a connection between financial literacy and successful entrepreneurism. Yet another reason to invest in financial education in schools and the workplace.

     

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    Cannabis Supporters Hope For Legalization
    Getty Images
    By Krystal Steinmetz

    When you think of popular retirement destinations, Florida and Arizona likely come to mind.

    But according to Reuters, some U.S. retirees are considering more than warm weather, good health care and close proximity to grandkids when deciding where to retire. Many American seniors are choosing to enjoy their golden years in a marijuana-friendly state.

    Chris Cooper is a 57-year-old retired investment adviser from Ohio. He opted to retire in San Diego because California has legalized medical marijuana use. Cooper, who doesn't like heavy-duty prescription painkillers like Vicodin, told Reuters that marijuana eases his back pain and spasms.

    "[Marijuana] stores are packed with every type of person you can imagine," said Cooper, who uses marijuana once or twice a week, often orally. "There are old men in wheelchairs, or women whose hair is falling out from chemotherapy. You see literally everybody."

    A lot of the things marijuana is best at are conditions which become more of an issue as you get older.

    More seniors are turning to marijuana to ease the aches and pains of aging. The most recent data from the Substance Abuse and Mental Health Services Administration found that marijuana use has increased among Americans ages 50 and older in the last 10 years.

    "A lot of the things marijuana is best at are conditions which become more of an issue as you get older," Taylor West, deputy director of the Denver-based National Cannabis Industry Association, told Reuters. "Chronic pain, inflammation, insomnia, loss of appetite: All of those things are widespread among seniors."

    Although it's difficult to pinpoint exactly how many seniors are picking a state to retire based on its marijuana laws, Michael Stoll, a professor of public policy at University of California, Los Angeles who studies retiree migration trends, told Reuters that "there is anecdotal evidence that people with health conditions which medical marijuana could help treat, are relocating to states with legalized marijuana."

    Oregon voters passed a ballot initiative legalizing pot in November. The state has since experienced a 5 percent jump in people moving there. United Van Lines data shows that the Mountain West, which also includes marijuana-friendly Colorado, "boasted the highest percentage of people moving there to retire," Reuters said.

    Gray-haired retirees flocking to pot-friendly states is quite a divergence from the stereotype of the early 20s "pothead" who has no job, little ambition and lots of Cheetos.

    But it's not quite so surprising when you consider that the retiring baby boomers were in college during the 1960s and 70s, when marijuana use was prevalent.

    "In Colorado, since legalization, many dispensaries have seen the largest portion of sales going to baby boomers and people of retirement age," West said.

    Are you surprised that many retiring baby boomers are migrating to pot-friendly states? Do you think pot should be legalized? Share your comments below or on our Facebook page.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

     

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  • 07/27/15--22:00: 8 Steps to Save Big at CVS
  • Filed under: , , , ,

    How to Save Up to 90% at CVS

    By Ari Cetron

    Say you want to buy some shampoo. You walk into the local CVS, pick it up, take it to the register and pay whatever price it said on the shelf. Rookie mistake.

    Through a combination of coupon clipping, sale-watching and the company's rewards program, you can stack various discounts to realize a huge savings. And make sure you are thinking about more than just the pharmacy counter, or health and beauty items, there's a lot of things you probably should be buying at drug stores.

    Rhode Island-based CVS Health (CVS) has more than 7,700 locations in 42 states, so it's likely there's one near you. These eight steps will get you started on a track to big savings. The basic premise is to use your CVS card and combine it with coupons to help you score a good deal. For other ideas and weekly deals and suggestions, check out www.wildforcvs.com.

    1. Get and register the card. It seems as though most large stores have some kind of rewards card, and CVS is no exception. Get that card and use it on all of your purchases at the store. Make sure you register the card online. If you sign up for email alerts, you'll get a steady flow of coupons and offers. Of course, you'll have to weigh that against the extra clutter in your inbox. It's a personal choice, just know that the extra coupons are a key point of the overall savings strategy. Extra Care Bucks: Your card will track your purchases and keep a tally of them. Depending on how much you spend, and what you spend it on, you'll earn extra cash to spend in the store. Whatever the amount is, you won't get change back from it, so make sure you spend the full amount (or more) when you redeem the bonus money. The credits often must be used within 30 days, so don't lollygag once you get them.

    2. Read the circular. CVS sends out a weekly circular, get it and read it. If you can't find a copy, go to www.CVS.com and read the online version. Make sure to pay special attention to the items that give you a bonus in Extra Care Bucks. Some, for example, might say free with the Extra Care Bucks. This means that you'll pay the full price at the register the day you buy it, but you'll get the same amount in extra care credit. If you have a coupon, use it, then you'll pay less for the item and still get the full amount of Extra Care Bucks -- almost like getting paid to take the item away from the store.

    It might also help to pay attention to how often the deals come up for the products you buy. Say your brand of soap comes up for a special deal once a month, it could be good to stock up when it happens (soap won't go bad, after all), or it might be better for you to wait until the next time it comes around.

    3. Clip the coupons. Keep an eye out for manufacturer's coupons -- the sort you might find in a newspaper or mailed circulars -- and CVS store coupons. CVS allows you to use one of each when you make a purchase, so if you have $1 off from one source and another $1 from the other, that's $2 off. If that item has Extra Care Bucks attached to it, you'll really be raking it in.

    4. Keep the bucks alive. You only have 30 days to spend the Extra Care Bucks, but what if there's nothing you want or need to buy that month? Buy something anyway. Find items that will generate the same amount of Extra Care Bucks and make the purchase. This effectively gives you another 30 days to spend the money. If you really, really don't need the items, maybe a friend does, or donate them to a local nonprofit and take the tax write off if you can.

    5. Get rain checks. If they don't have the item you want in stock, ask the clerk for a rain check, a slip of paper that allows its holder to purchase the item at the sale price at a later date. The Extra Care Bucks will still be part of the offer when you eventually do make the purchase. Check the expiration date. If you have time, it may even pay to wait until you have a coupon or other deal for that product before you cash in the rain check.

    6. Spend it all. You won't get change back from using extra bucks. If you've got $15 in extra bucks and only $13 in purchases, those other $2 are lost, so find something to spend them on. Little items can be a good idea, like travel sized toothpaste or shampoo to bring on your next trip, or maybe a candy bar, after saving all that money, you earned a little treat.

    7. Store it all. Don't be afraid to buy more nonperishable items than you need right now. Things like cleaning supplies, soaps and toiletries won't go bad. If you stock up on them when you find a deal, you'll never be out and never have to pay full price. Just make sure you have the proper space for all of the stuff you'll have.

    8. Extra transaction. If you've got multiple items with Extra Bucks on them, consider not buying them all at once. Buy each one in a separate transaction, and use the extra bucks on the next item. This will usually result in a tradeoff of having to pay less that day, but then having fewer Extra Care Bucks to use the next time. So you'll need to weigh which you need more, the cash today or the cash next week.

    Do you have tips and tricks for saving money on drugstore items? Share them in comments below or on our Facebook page.

     

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    50th. Anniversary
    Getty ImagesAs you celebrate Medicare's special birthday, make sure you know the ins and outs of the program.
    By Emily Brandon

    Medicare turns 50 years old Thursday. The health insurance program was signed into law by President Lyndon Johnson on July 30, 1965, and former President Harry S. Truman and his wife were the first beneficiaries. Medicare continues to cover hospital and doctor's visits for older Americans and now includes many types of preventive care and prescription drugs. Here are 10 important things you should know about Medicare.

    What's covered. Medicare Part A covers hospital care and some types of home health care. Medicare Part B is medical insurance that pays for doctor's office visits and outpatient services. Medicare Part C or Medicare Advantage Plans are an alternative to original Medicare provided by private insurance companies, often with extra coverage restrictions. Medicare Part D will cover prescription drugs, typically in exchange for an additional premium.

    How much you are paying in. Most workers pay 1.45 percent of their earnings into the Medicare system, and employers match that amount. Self-employed workers contribute 2.9 percent of their income. Earnings that exceed $200,000 for individuals and $250,000 for couples trigger an additional 0.9 percent tax.

    The enrollment deadlines. You can enroll in Medicare during the seven-month period that begins three months before the month you turn 65. Coverage can start as early as the month of your 65th birthday. If you don't sign up during this initial enrollment period, you could be charged higher premiums for the rest of your life. "If they sign up later than 65 for Medicare, they are going to pay late penalties," says Tanya Feke, a medical doctor and author of "Medicare Essentials: A Physician Insider Explains the Fine Print." "Someone who is working and has health insurance through their employer, they may be able to delay signing up for Medicare without penalties." If you postpone signing up for Medicare due to group health insurance through your current employer, sign up for Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.

    Premium amounts. Most people don't pay a premium for Medicare Part A. The standard Medicare Part B premium is $104.90 in 2015, but the monthly costs are higher for people with a modified adjusted gross income above $85,000 for individuals and $170,000 for couples. Medicare Part D premiums vary depending on the plan you select.

    Other out-of-pocket costs. There's a $147 Medicare Part B deductible in 2015, after which you will be charged 20 percent of the Medicare-approved amount for most services with no annual limit on out-of-pocket costs. Medicare Part A has a $1,260 deductible if you are hospitalized, and additional costs apply if your hospital stay exceeds 60 days. "Medicare Part A and Part B pays a portion, but you are responsible for a portion of that bill," says Ronald Kahan, a medical doctor and author of "Medicare Demystified: A Physician Helps Save You Time, Money, and Frustration."

    Free services. Medicare beneficiaries qualify for a free wellness doctor's office visit once every 12 months. Many preventive care services also don't have any cost-sharing requirements such as flu shots and mammograms. However, if a problem is discovered during a wellness visit or additional tests are required, it may trigger other out-of-pocket costs.

    Prescription drug coverage. Retirees get to choose between an average of 30 Medicare Part D prescription drug plans in their area, each with different premiums, covered medications and cost-sharing requirements. Prescription drug plans are allowed to change their covered medications and costs each year. "Every year the insurance companies change their formularies, which is the drugs they cover, and how much they charge for those drugs," says Joseph Matthews, an attorney and author of "Social Security, Medicare & Government Pensions: Get the Most Out of Your Retirement & Medical Benefits." "Each year you have to figure out if the D plan that you have is still the best one for you, both in terms of cost and coverage." You can shop around for a new Medicare Part D plan once a year during the open enrollment period from Oct. 15 to Dec. 7, and consider switching if you can find a plan that better meets your needs.

    How to supplement Medicare. A Medigap plan can be used to cover traditional Medicare's out-of-pocket costs. "You can minimize deductibles and copays if you sign up for a Medigap policy," says Sudipto Banerjee, a research associate at the Employee Benefit Research Institute. You can first purchase a Medigap policy during the six-month period that begins when you're 65 or older and enrolled in Medicare Part B. After this period ends you could be charged significantly higher premiums or even denied supplemental coverage.

    What's not covered. Medicare typically doesn't cover eyeglasses, contact lenses, hearing aids or dental care. Medicare also won't pay for more than 100 days of long-term care such as nursing home stays or assisted living.

    Almost all older Americans use it. In 1966, 19 million people enrolled in the program. That number has gradually increased each year to 53.8 million people in 2014. The program continues to provide valuable health insurance to most Americans ages 65 and older, regardless of their health status.

    Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.

     

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    Ford Truck Missouri Plant
    Charlie Riedel/APA worker inspects a new 2015 aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant in Claycomo, Mo.
    By Bernie Woodall

    DETROIT -- Ford Motor Co. reported second-quarter earnings that handily beat expectations, based on the continued strength of North American sales, led by its popular F-150 pickup truck.

    Ford posted net quarterly profit of $1.89 billion, or 47 cents a share. Analysts estimated profit of 37 cents a share, according to Thomson Reuters I/B/E/S.

    Ford (F) shares were up 2.7 percent to $14.95 before the market opened.

    Operating profit totaled nearly $2.6 billion in North America, a company record for any quarter, and was linked to better pricing on new product launches, said Bob Shanks, Ford's chief financial officer.

    Ford maintained its full-year 2015 forecast of an operating profit of between $8.5 billion and $9.5 billion.

    Ford also maintained a forecast of North American profit margin between 8.5 percent and 9.5 percent. Shanks said he now expects the margin to end the year at the high end of that range.

    Operating profit in Asia Pacific rose 21 percent to $192 million despite a drop in industry sales in China, the world's biggest auto market.

    "As this has been happening, we have been adjusting our production all along" due to the lower demand, said Shanks.

    Ford lowered its 2015 forecast for industry sales in China to 23 million to 24 million vehicles, from 24.5 million to 26.5 million at the start of the year. Sales in China in 2014 were about 24 million. Shanks said Ford sees China sales of 30 million by the end of the decade.

    Ford's quarterly revenue of $37.3 billion beat expectations of $35.34 billion.

    Shanks said the company also achieved stronger pricing in North America because of the rollout of new versions of several models, including the F-150 truck and the Edge and Explorer SUVs.

     

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    Centennial Real Estate
    Steve Nehf/The Denver Post via Getty Images
    By Tom DiChristopher

    U.S. home prices continued to rise in May, according to the S&P/Case-Shiller Home Price Index, but the increase fell short of analyst estimates.

    The 20-city index rose 4.9 percent year-over-year in May. Analysts had expected an increase of 5.7 percent.

    Denver led the gains with 10-percent year-over-year appreciation in home prices, following by San Francisco and Dallas, where prices rose 9.7 percent and 8.4 percent, respectively.

    Nationally, single-family home prices have settled into an annual 4 to 5 percent pace of increase, moderating after "double-digit bubbly pattern of 2013," according to S&P/Case-Shiller.

    "Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages," David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said in a statement.
    The weak link in the market remains first-time home buyers, S&P/Case-Shiller reported.

    "First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory," Blitzer said.

     

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    Target Corp CEO Cornell
    Richard Drew/APTarget Chairman and CEO Brian Cornell
    By Krystina Gustafson

    Change doesn't come easy -- particularly when you're trying to move the needle at a company that rakes in hundreds of billions in annual sales.

    Still, when new CEOs took over at two of the country's largest retailers within a three-day time span last year, experts knew major changes were in store for the industry.

    As Greg Foran and Brian Cornell mark their one-year anniversaries at Walmart U.S. (WMT) and Target (TGT) next month, the two are looking to continue building on the frameworks they've put in place, and set their companies up for future growth.

    Although both retailers cater to a still-struggling consumer, the financials are starting to trend in their favor. Both big-box stores posted two consecutive quarters of traffic gains in the most recent periods. They've also recorded three straight quarters of same-store sales gains, following a string of flat or lower results.

    Target, however, has delivered an upside surprise to Retail Metrics' quarterly revenue and earnings estimates for the past three quarters, whereas Walmart has disappointed twice on revenue and once on profit.

    As a result, Target's shares have climbed 36 percent under Cornell, while Walmart's shares have dropped roughly 4 percent during Foran's tenure.

    "They've done a nice job," said Craig Johnson, president of Customer Growth Partners. "With the dramatic changes [Cornell has] made... you're seeing the rudder turn and you're seeing a significant change there."

    "Walmart has a bigger turning radius than Target," Jonson added.

    Target Rips Off the Bandage

    To Moody's analyst Charles O'Shea, Target's biggest success under Cornell came from one of the biggest failures in its history: Canada.

    Just five months after Cornell took control, he announced that the company would incur a $500 million-plus cash cost to shutter its 133 stores there. The locations, which fell flat with Canadian consumers due to their high prices and empty shelves, weren't expected to be profitable until at least 2021.

    "It's almost mind-boggling to see what happened up there," O'Shea said. "That was priority No. 1."

    Closing up shop in Canada was one of a string of tough decisions Cornell has made, Johnson said. To reduce costs and speed up the decision-making process, the CEO in March said the company would cut several thousand jobs in a $2 billion savings plan. And just last month, Target parted ways with longtime merchandising chief Kathee Tesija.

    "Fixing the merchandise is a big deal," Johnson said.

    Part of what has traditionally separated Target from its low-price competitors was its reputation for cheap but chic items. But as other stores started a race to the bottom in the post-recession years, even the bull's-eye retailer has admitted it focused too much on the "pay less" portion of its "expect more, pay less" proposition.

    There are so many fronts that you have to fight on.

    Updating the stores' merchandise is at the core of one of Cornell's biggest initiatives -- prioritizing what the company refers to as its four "signature" categories: style, baby, kids and wellness. Analysts agree Target has made strides in once again differentiating merchandise, including its blockbuster limited-time collection with Palm Beach-inspired fashion house Lilly Pulitzer (OXM).

    But there is still work to be done, including finding a new chief merchant.

    Cornell, who comes from the consumer packaged goods industry, has listed grocery as another of his major priorities, and recently hired former PetsMart and Safeway executive Anne Dament to lead the charge.

    Accelerating the food business, which together with pet supplies accounts for 21 percent of Target's sales, could deliver a significant traffic boost to the retailer, as consumers shop for food five times as often as everything else, O'Shea said.

    But it's also a difficult business to get right -- particularly as Walmart zeros in on the category.

    Target is also hoping its recent partnership with CVS will boost visits to its stores. Through this deal, Target last month sold its pharmacy business to CVS Health (CVS), which could provide it with millions of repeat customers.

    "Target could potentially realize incremental sales as it picks up incident front-end purchases that customers used to make at [a] CVS location," Cowen & Co. analyst Oliver Chen wrote in a note to investors.

    That's not to say Target is taking its foot off the gas on the Web. Although O'Shea said its online operations still lag competitors such as Walmart or Best Buy (BBY), it's improved its tablet app, and its Cartwheel savings app continues to offer shoppers value.

    O'Shea said he's not sure, however, how much longer Target -- or Walmart for that matter -- can continue offering free shipping promotions in an effort to steal business from Amazon.com (AMZN).

    "There are so many fronts that you have to fight on," O'Shea said.

    Walmart Going Back to Basics

    Turnaround at Walmart U.S. has been understandably slower. With $288 billion in annual sales, the retailer's largest unit alone pulls in twice as much revenue as the second-biggest U.S. retailer, Kroger (KR).

    Though Walmart's sales and profits have failed to break out during Foran's tenure, the retailer recently reignited the minimum wage debate by boosting hourly pay for 500,000 of its U.S. workers to $9 an hour. Although experts agreed the move would dilute its profits, it should "start to bear dividends down the road," Johnson said.

    "When you pay people just minimum wage or close to minimum wage, you're going to have a turnover problem," Johnson said.

    Now, by incentivizing store associates to stick around longer -- and providing additional training to managers -- the stores' operations should improve. That includes everything from keeping its shelves stocked, having enough shopping carts at the front of the store, and cutting down on the long lines that have frustrated Walmart shoppers.

    Improving operations in the retailer's fresh food business is particularly important, as grocery accounts for more than half of its revenues. This is something the retailer has to get right, since Target sets the category in its crosshairs.

    Perhaps Walmart's biggest opportunity in this area is its small-format Neighborhood Market stores, which are located in more urban areas and skew toward grocery. These stores, which now account for more than 10 percent of the retailer's U.S. store count, offer shoppers a low-cost alternative for everyday items that they need during the week. They stand in contrast to its supercenter format, which cater to shoppers who want to stock up on bulk items.

    "It's hard to argue with all those points of distribution," O'Shea said. "You take advantage of the fill-in trip and you also become a competitor to every other retailer out there."

    "Greg is really focused on that."

    Johnson said he would like to see Walmart further accelerate its rollout of small-format stores, though they still have some operational issues. Problems include such retail basics as having enough handcarts to accommodate for small trips, and staying in-stock on fresh foods, Johnson said.

    These examples fall in line with the priorities Foran outlined at Walmart's investor meeting in April. First on the list: Improve the customer experience. As such, he acknowledged the retailer needs to do a better job getting inventory levels right and improving the flow of product to the selling floor.

    Stores have also started to reduce the price on products that are nearing their expiration date, which he estimates will deliver $500 million in annual savings. And moving forward, Foran plans to improve the lighting, layout and temperature in some of its stores.

    Although that doesn't mean the retailer will lose focus on savings, Johnson said Walmart can't rely on price alone to get people in the door.

    Foran echoed that sentiment back in April.

    "To be really frank, if we went out there and started shouting about price today, I don't think you'd get a great return on your investment," he said.

    "I think customers would want to make sure that we are in stock, that the store was clean, including the toilets, that fresh was reasonably fresh and that the service from the front end was appropriate."

     

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    Bored mixed race businesswoman using laptop
    Getty ImagesNo word back about the job you applied to? Don't get discouraged. Expect the the applicant reviewing process to take several weeks.
    By Vicki Salemi

    If you're looking for a job and feeling like it's taking a while, you may be right. That's because a job search won't happen overnight.

    While a new job won't simply land in your lap a week (or even a month) from today, your efforts will certainly pay off in the end. You'll need to stick to the course, be persistent and follow through to realize that.

    When I worked in recruiting and advised hiring managers who wanted to hire candidates extremely quickly, I repeatedly explained timing and expectations regarding the job posting, interview process and background check -- all of which took a minimum of six to eight weeks in a perfect world.

    The process takes time, so don't give up on your job search during this time period. In reality, the search is probably successful and progress is being made. It may feel challenging to recognize strides when they're muddled between thoughts and beliefs that are not beneficial. Here are several excuses and ways to eliminate to eliminate them once and for all:

    1. 'It's taking too long.' Years ago when I moved internally from international HR into recruiting, it took nearly two months for the interview process to occur, decisions to be made and for my transfer date to be confirmed. In hindsight, that's a pretty fast turnaround, but that didn't seem like that case as it was unfolding in real time.

    New mantra: "Anything worth having is worth waiting for." We're used to being immersed in an instant gratification society. Want takeout? Within minutes, you can have a meal delivered to your door. Need a car service? There's an app for that, too. Texting a friend making dinner plans? Instant messages galore.

    But job searching isn't instant. Leverage your insatiable appetite for a new job as fuel to continue pursuing meaningful networking rather than allowing that same hunger to stifle and distract you. Create an Excel spreadsheet, take notes in your smartphone or do whatever you need to do to stay organized and remain focused. Keep your eye on the prize.

    Making life changes -- whether it's finding a new job, buying a house or researching rescue shelters to get a new dog -- will take time, energy and effort. Accept that as part of the process, and focus on what you do have control over -- your actions and positive beliefs.

    2. 'But I haven't interviewed in years. My skills are rusty.' Sure, this may be true, but there is no time like the present to eliminate this alienating thought, which serves as a block to either not interview at all or not ace an interview once one has been scheduled.

    New mantra: "I'm an excellent conversationalist and enjoy meeting new people." You've most likely had meaningful conversations about your career, whether it was during a year-end performance review with your boss or a conversation with your mentor, mentee or staff.

    As for your interview skills, they may feel a little rusty, but you may be pretty skilled at making small talk, highlighting your strengths and asking intuitive questions. That sounds a lot like a job interview, doesn't it? The only way to remedy the situation (in addition to owning the new mantra) is to start interviewing.

    3. 'I don't even have a resume. I can't start looking for a new job without one.' Even if you don't have a current resume, you can always work on one. Begin today!

    This is similar to working out: You may feel out of shape, and yet the only way to get fit is to simply start moving. One situp leads to two and then three, and the same applies to your resume, so get moving.

    And just because you don't have a resume readily available doesn't mean you shouldn't network. When I worked in corporate recruiting, sometimes resumes got submitted after the fact. As in: "Congratulations, you're hired -- and, by the way, we need you to submit your resume so we'll have it on file and can generate an offer letter from the system."

    Yes, you'll need a resume for the job-search process, but don't let not having one prevent you from having meaningful networking conversations, which can lead to interviews and possible job offers.

    New mantra: "My resume is my passport -- but instead of a new destination, it's leading me to a new job." Think of your resume as your one-way ticket to a new job.

    Instead of dreading it, embrace it as your port of entry. Candidates have told me once they actually sat down to revise their old one, the process didn't take as long as they originally anticipated. Working on their resume took less time then the amount of time spent procrastinating.

    Remember that your resume is a work in progress. You can tweak responsibilities and revise the document as you go along. After you land a new job, incorporate facets from the job description into your resume.

    4. 'My resume is just going to get submitted into a black hole online, so I'm not going to bother.' That's like forfeiting a ballgame by not even showing up. You owe it to yourself to show up. The applicant tracking system (better known as the ATS), will get inundated with resumes pegged to each specific job opening, but that doesn't mean you shouldn't apply.

    While it does help to have a referral so your resume is flagged differently in the system for recruiters to easily spot, don't give up. Definitely apply.

    New mantra: "My efforts are paying off." One of the most important things to remember about your job search is progress. Many job seekers tend to only focus on one tangible aspect: whether or not they landed a new job. In reality, many other intangible strides are taking place, such as conversations, applications, interviews, open doors and movement closer to your goal.

    Although you may not have landed a new job just yet, keep the faith and, more importantly, keep the focus.

    Vicki Salemi is a career expert for Monster, a global leader in connecting people to jobs. She utilizes her more than 15 years of experience in corporate recruiting and human resources to empower job seekers with insights and firsthand knowledge from the halls of HR. A public speaker and consultant, Vicki is the author of "Big Career in the Big City," and former creator/host/producer of MediabistroTV's "Score That Job."

     

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    Consumer Confidence
    David Goldman/AP
    By PAUL WISEMAN

    WASHINGTON -- U.S. consumer confidence fell this month to the lowest level since September. Consumers are worried about the job market and rattled by events in Greece and China.

    The Conference Board said Tuesday that its index of consumer confidence fell to 90.9 in July from a revised 99.8 in June. That's the lowest since September's reading of 89.

    Consumers' assessment of current conditions fell slightly to a still-healthy 107.4 from 110.3 in June; but their outlook for the next six months dropped sharply to 79.9 this month, the lowest since February 2014 and down from 92.8 in June.

    Lynn Franco, a Conference Board economist, says consumers may have been concerned about the debt standoff in Greece and a stock market plunge in China.

    The percentage of consumers describing current business conditions as "good" slipped to 24.2 percent from 26.1 percent in June.

    The percentage expecting the job market to improve over the next six months dropped to 13.1 percent from 17.1 percent in June; the percentage expecting fewer jobs in six months rose to 20 percent from 15.2 percent.

    Consumers were also slightly less likely to expect their incomes to grow in the next few months and more likely to expect them to fall.

    Adam Collins, an economist with Capital Economics, said the drop in confidence also reflects higher gasoline prices in recent months; prices hit bottom at $2.03 a gallon in late January and have since rebounded to $2.70 a gallon, according to AAA. Consumer caution may reduce spending to an annual growth rate of 2 percent in the July-September period from the 2.7 percent forecast for the April-June period, Collins said in a research note.

    He predicted their mood will improve. "With the labor market likely to strengthen further, wage growth poised to accelerate and the recent fall in oil prices suggesting gasoline prices may start to decline again," he wrote, "confidence should rebound soon." He expects consumption growth should then rise back toward 3 percent.

    Still, Mark Vitner, senior economist at Wells Fargo Securities, worries that consumers' darkening mood reflects bigger problems. A strong dollar has made U.S. products less competitive in foreign markets, hurting American manufacturers. And weakening global economic growth has pushed down commodity prices and hurt mining and energy firms.

    "The slide likely reflects the pressure that weaker global economic growth and the stronger dollar are exerting on parts of the country tied to energy production, mining and agriculture," Vitner wrote in a research report.

    The government will report Thursday on gross domestic product during the April-June quarter. The economy contracted 0.2 percent during the first three months of the year, pummeled by winter weather and global economic pressures that caused the dollar to rise in value and hurt the affordability of U.S. made goods abroad.

    Economists say that the economy likely returned to growth in the second-quarter, expanding at a 2.7 percent annualized pace.

    A separate survey of consumer sentiment compiled by the University of Michigan that was released this month showed a preliminary decline in sentiment from June to July.

     

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    Starbucks
    Mark Lennihan/APStarbucks is among the many businesses where consumers are paying more for goods and services.
    By CHRISTOPHER S. RUGABER

    WASHINGTON -- Apartment rents are up. So are prices for restaurant meals, haircuts, gym memberships and a cup of coffee.

    For American consumers who have become used to flat or even falling prices for several years, an unfamiliar sight has emerged in many corners of the economy: Inflation is ticking up.

    The price increases remain modest. And in many cases, they're canceled out by price declines for other items that are keeping overall inflation historically low.

    Yet the stepped-up price tags for a range of consumer items are the largest since the Great Recession ended six years ago. They actually reflect a healthier economy: Many businesses have finally grown confident enough to pass their own higher costs on to consumers without fear of losing customers. Employers have added nearly 5.6 million jobs the past two years, allowing more people to absorb higher prices.
    INFLATION
    Signs of emergent inflation are a key reason the Federal Reserve, which is meeting this week, will likely raise interest rates from record lows later this year. Inflation has long trailed the Fed's 2 percent target rate but is on track to return to that level in coming months.

    "That should give the Fed a little more confidence that ... they will meet their [inflation] objective," said Laura Rosner, an economist at BNP Paribas.

    In June, the price of haircuts jumped 1.6 percent, the biggest monthly jump in the 62 years that the government has tracked the data. Over the past year, they've surged 2.8 percent, the largest year-over-year gain since 2008.

    That's no surprise to Chrissie Crosby, a retired government worker in Alexandria, Virginia. She says her hair salon has started charging nearly $30 for a shampoo, blow dry and haircut, up from $22.

    "It used to be a convenient place for a trim, because it was inexpensive, but it's no longer very inexpensive," she said.

    Coffee prices jumped 6.1 percent in January from 12 months earlier, the most in nearly three years. Starbucks (SBUX) has responded by raising the price of a cup of coffee by between 5 cents and 20 cents.

    And beef prices have soared nearly 11 percent in the past year, which has led Chipotle (CMG) to raise prices for steak and its beef barbacoa by an average of about 30 cents an entree, the company says.

    The biggest driver of inflation this year has been residential rents. They climbed 3.5 percent in June from a year earlier, the fifth straight month with an annual gain of that size.

    Overall, consumers have yet to be hit by significant increases for everyday purchases. Inflation as measured by the consumer price index has barely risen in the past 12 months, mostly because cheaper gas has held down the index.

    But prices are rising. If you exclude food and energy, which tend to fluctuate sharply, "core" inflation has risen 2.3 percent at an annual rate in the past three months. In April, the three-month annual pace was 2.6 percent, well above the Fed's inflation target.

    Economists expect the price increases to continue, in part because they're occurring mostly in services, whose prices tend to be comparatively stable. Economists call these "sticky" prices. They include rent, insurance, haircuts, restaurant meals and utility bills.

    Sticky prices are slow to change. Utilities typically must ask regulators to approve price increases, for example, and most restaurants don't want to frequently reprint menus. But once prices in those categories do rise, they're usually slow to change course.

    The Federal Reserve Bank of Atlanta maintains an index of sticky prices, which has risen 3 percent at an annual rate in the past three months, the most since the recession ended.

    'No Reaction Whatsoever'

    Labor costs for many service-sector companies are rising, lifted by minimum wages in an increasing number of states. Chipotle just raised prices 10 percent in San Francisco partly because of that city's minimum wage increase. Jack Hartung, the company's chief financial officer, said Chipotle has seen "no reaction whatsoever" from customers.

    By contrast, prices for goods in some cases keep falling. Clothing, furniture, and many appliances are cheaper than they were a year ago, a result of global competition that's held down the costs of factory goods.

    And gasoline and natural gas is much cheaper than they were last year. Through the first half of 2015, the average retail gasoline price is down 30 percent to $2.47 a gallon. Residential natural gas prices are down 9 percent, according to the Energy Information Administration.

    People are finally getting back to the comforts they may have afforded prior to the recession, including splurging on haircuts and home cleaning services.

    A big reason prices for services have risen is that they're increasingly where Americans are spending money. Consumers spent just 32 cents of every dollar on goods in the first quarter of this year, down from nearly 34 cents two years ago. Over the same period, services spending rose to 67.6 cents from 66.

    "People are finally getting back to the comforts they may have afforded prior to the recession, including splurging on haircuts and home cleaning services," says Jack Kleinhenz, chief economist at the National Retail Federation.

    Still, for many families that remain squeezed by sluggish pay growth, even small price increases hurt. Average hourly earnings rose just 2 percent in June from a year earlier, well below the 3.5 percent pace typical of a healthy economy.

    Jeremy Beck, a lawyer in Louisville, Kentucky, has noticed a jump in his water bill and said electricity costs were also rising. But he and his wife, Christine Ehrick, a professor at the University of Louisville, said the biggest problem has been flat wages.

    "Neither of us have seen our pay increase much at all in the past few years," Ehrick said.

    -AP business writers Candice Choi, Anne D'Innocenzio and Jonathan Fahey contributed to this report from New York.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Noel Randewich

    NEW YORK -- U.S. stocks ended sharply higher Tuesday, breaking a five-day losing streak as attention shifted from trouble in Chinese equities to U.S. corporate earnings and to speculation the first Federal Reserve interest rate hike may not come until December.

    The Dow Jones industrial average and S&P 500 chalked up gains of more than 1 percent, while the Nasdaq composite lagged slightly.

    The S&P has had five down days in a row and a lot of people are starting to nibble.

    After the S&P sank over the past week toward the low end of a range it has traded in since February, some investors wagered the market was primed for a technical bounce-back.

    "The S&P has had five down days in a row and a lot of people are starting to nibble," said Michael Matousek, head trader at U.S. Global Investors in San Antonio, which manages about $1 billion.

    Market sentiment also reflected expectations the Fed would wait until December, rather than September, to raise interest rates for the first time since 2006, Matousek added.

    With a two-day Fed policy meeting ending Wednesday, investors are looking for hints about the timing of that rate increase. No move on rates is expected this week.

    "September is possible but the probability for a December rate hike is increasing," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

    The Dow Jones industrial average (^DJI) rose 1.1 percent, to end the session at 17,630.27. The Standard & Poor's 500 index (^GSPC) gained 1.2 percent to 2,093.25 and the Nasdaq composite (^IXIC) added 1 percent to finish at 5,089.21.

    All the 10 major S&P 500 sectors rose, with the energy index leaping 3 percent as oil prices recovered from near six-month lows.

    U.S. consumer confidence weakened in July to its lowest level since September, due in part to a less optimistic outlook on the labor market.

    Earnings Watch

    Ongoing uncertainty related to China's stock market, which closed lower again Tuesday, took a backseat to U.S. corporate earnings.

    With second-quarter reports well under way, analysts now expect overall earnings of S&P 500 companies to edge up 0.3 percent and revenue to decline 4 percent, according to Thomson Reuters (TRI) data.

    "Earnings are growing but very slowly. The market's biggest concern is the lack of top-line growth and where that growth is going to come from," said Tim Courtney, chief investment officer of Exencial Wealth Advisors, which oversees $1.3 billion.

    After the bell, Twitter (TWTR) jumped 5.2 percent and Gilead Sciences (GILD) rose 3 percent after both companies posted their second-quarter results. Yelp (YELP) slumped 13 percent after its report.

    During Tuesday's session, SuperValu (VALU) jumped 10.6 percent. It said it was exploring a spinoff of its discount grocery chain Save-A-Lot into a publicly traded company.

    Advancing issues outnumbered declining ones on the NYSE by 2.7 to 1. On the Nasdaq, 1.67 stocks gained for each that declined. The S&P 500 racked up 15 new 52-week highs and 12 lows. The Nasdaq composite posted 36 new highs and 163 lows. Some 7.3 billion shares changed hands on U.S. exchanges, above the daily average of 6.7 billion so far this month.

    -Tanya Agrawal contributed reporting.

    What to watch Wednesday:
    • The National Association of Realtors reports pending home sales for June at 10 a.m.
    • Federal Reserve policymakers meet to set interest rates and release a statement at 2 p.m.
    Earnings Calendar
    These selected companies are scheduled to release quarterly financial results:
    • Altria Group (MO)
    • Anthem (ANTM)
    • Facebook (FB)
    • General Dynamics (GD)
    • GlaxoSmithKline (GSK)
    • Hilton Worldwide Holdings (HLT)
    • Humana (HUM)
    • International Paper Co. (IP)
    • Level 3 Communications (LVLT)
    • Marriott International (MAR)
    • Mastercard (MA)
    • MetLife (MET)
    • Northrop Grumman (NOC)
    • Southern Co. (SO)
    • Whole Foods Market (WFM)

     

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    Health Spending
    Carolyn Kaster/APHealth-policy expert Douglas Holtz-Eakin speaks on Capitol Hill in 2010. Holtz-Eakin said a report forecasting accelerated growth in health spending was "not great news."
    By RICARDO ALONSO-ZALDIVAR

    WASHINGTON -- It's lasted six years. But now welcome relief from rising U.S. health care costs seems to be winding down.

    Health care spending will outpace the nation's overall economic growth over the next decade, the government forecast on Tuesday, highlighting a challenge for the next president, not to mention taxpayers, businesses and individual Americans.

    A combination of expanded insurance coverage under President Barack Obama's law, an aging population, and rising demand will be squeezing society's ability to pay.

    By 2019, midway through the next president's term, health care spending will be increasing at roughly 6 percent a year, compared to an average annual rise of 4 percent from 2008 through 2013.

    The higher rate of increase is still "relatively modest," says the report from the Office of the Actuary in the Health and Human Services Department. The forecast, through 2024, doesn't foresee a return to pre-recession days of torrid health care inflation, as the government and private employers try to revamp the way they pay hospitals and doctors to emphasize quality over quantity.

    The main point is that the bill will continue to grow faster than the economy, which is what pays the bill.

    Even so, the report is "not great news," said economist Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank.

    "The main point is that the bill will continue to grow faster than the economy, which is what pays the bill," he added. "The next president faces the task of reining in the growth of federal entitlement spending."

    "I do think this becomes something of a liability for anybody coming into office, and they need to have a very proactive policy to address it," said Dan Mendelson, CEO of Avalere Health, a market analysis and consulting firm. Mendelson served in the Clinton White House as a health policy expert.

    Health care as a share of the nation's overall economy is projected to grow from 17.4 percent in 2013 to 19.6 percent in 2024, the report says, accounting for nearly $1 of every $5 spent.

    Growth in the nation's health care tab slowed dramatically during the 2007-2009 economic recession.

    Then came several years when health care increases tracked closely with the economy as it started to stir again. The health care law's Medicare cuts helped keep spending in check, as did across-the-board cuts enacted later.

    As taxpayers, Americans benefited from the slowdown. But many working people saw their own medical bills rise, as employers shifted costs to employees and their families.

    More Americans Covered

    Things changed in 2014, the report says, with coverage expansion under the new health care law. Some 8.4 million gained coverage that year, and people with health insurance use more medical services and prescriptions than do the uninsured.

    At the same time, expensive new drugs that can cure hepatitis C are boosting spending on medications. In 2013, prescription drug spending rose by 2.5 percent. For 2014, the projected increase is 12.6 percent, according to the report. Hepatitis C is a viral infection that gradually destroys the liver, afflicting about 3 million Americans.

    Spending on Medicaid, the federal-state health insurance program for low-income people, also has jumped. The 2013 increase was 6.1 percent. But the program is projected to have grown by 12 percent in 2014, again boosted by coverage expansion under the health care law.

    Expanded Medicaid is one of two paths for covering the uninsured under Obama's law. The other is subsidized private insurance. Spending on private insurance is projected to have grown by 6.1 percent last year, more than double the rate in 2013.

    Higher Drug Costs

    The effects of expanded coverage won't be as dramatic in the years ahead, the report says. Likewise, the spike in drug costs will work its way through the system as government programs and insurers demand rebates from the manufacturers of hepatitis C drugs.

    But the other big factors pushing spending higher may harder to deal with. An aging population means older and sicker Medicare beneficiaries who will need more services, and more intense medical attention. Also, economic recovery creates demands for higher pay, and hospitals and doctors' offices are labor-intensive enterprises.

    Government will become a more dominant player as the federal, state, and local government share of health care rises to 47 percent in 2024, from 43 percent in 2013.

    The health care spending report was published online by the journal Health Affairs.

     

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    More Money-Saving Moving Tips
    Moving can be a stressful experience, so before you get packing, here are a few ways to make it easier on both you and your wallet.

    First, when packing up your kitchen, use styrofoam plates in between your real plates as padding. It's a cheap, easy way to keep them from breaking during your move. When it comes to your glasses, an old wine box is a perfect way to keep them organized. Just snag some boxes from your local bar or liquor store, stuff some newspaper in each compartment for protection, and your glasses will be good to go.

    Another thing to remember is that a little bit of cling wrap can go a long way. You can use it to keep your jewelry from getting tangled, to cover the openings of your toiletries so they don't leak, and even to stop dresser drawers from sliding open while they're on the moving truck. The cling wrap will also help pad the dresser, and keep it from getting scratched during your move.

    Next, if you're a renter, don't wait until the day of the move to clean your place. If the owner has to bring in a cleaning crew to go over the stuff you skipped, chances are it'll come out of your security deposit. Clean ahead of time so you can hold onto your money.

    Finally, always pack an overnight bag or box with everything you'll need for the first night in your new place. After a long day of moving, the last thing you'll want to do is go through a bunch of boxes, just to find your pajamas or hairdryer. Keep all the basics on hand, and save yourself from unnecessary stress.

    So, if you're about to move, remember these tips to make it easier on yourself. You'll see that by packing with a plan, you'll save yourself time, money and stress on moving day.

    View Poll

     

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    Senior Woman Paying Bills
    Getty Images
    By Nicholas Pell

    NEW YORK -- As you close in on your retirement, consumer debt can really cramp your style.

    "You're going to have a lot less stress and a lot more stability if you can retire your debt before you retire," said Gerri Detwiler, director of consumer education at Credit.com.

    If you're unable to nip debt in the bud during your working years, you might spend years after retirement paying down your debts. Even worse, you might have to push retirement back so that you can pay off your outstanding debt.

    But if you have some time left before you retire, you don't have to contemplate such doomsday scenarios. Instead, you just need to begin aggressively attacking your consumer debt. Here's how.

    The Benefits of Paying Down Retirement Debt

    Detweiler notes that there are two main benefits to paying down your retirement debt now. "It will give you more money in your budget, but it also gives you a sense of what you can really live off of," she says.

    Paying off debt before retirement is the most prudent thing to do.

    She points out that in retirement, your income is likely to drop. So getting used to living on less at this point in your life is a good exercise for when the day comes that you actually retire. "It will be less of an adjustment," she says.

    "Paying off debt before retirement is the most prudent thing to do," says Ellie Kay, a family financial expert. "It leads to a higher quality of life, because you don't have the extra burden of consumer debt."

    To underscore the importance of getting rid of your debt load before your golden years, it's essential to take stock of how much money you will need in retirement.

    "The rule of thumb is that you need 70 percent of your income when you retire," says Detweiler. "But if you can live on less, you have more options. It doesn't necessarily have to be 70 percent of what you're earning today. If you can live on less than that, you have a lot more options in terms of when you can retire and how you can spend your money." So a happy accident of paying down your debt before retirement is that you end up retiring sooner than you think.

    Should You Use Retirement Funds to Pay Off Debt?

    Tapping your retirement funds to get rid of debt may not be the hottest idea out there. That's because if you're not yet 59.5 years old, withdrawals from your 401(k) account will get dinged at a 10 percent tax penalty. To boot, taking withdrawals from your 401(k) decreases the total pot and stunts the ability for the funds to grow with compound interest.

    That said, if you can cut down on that crippling high-interest credit card debt, it may be worth your while to employ some of your retirement funds toward eliminating your debt.

    "If you're really flush with retirement money and you can use it, that's fine," says Detweiler. "But most people who are looking at retirement with debt will want to preserve those savings for later."

    Instead, she suggests that you begin your quest by meeting with a credit counselor. "Let's say you want to retire in three years and have a lot of debt, between $30,000 and $60,000," she says. "Just because you can't come up with a plan to become debt free doesn't mean they can't." She says that many people who are afraid they'll never be able to retire come up with workable plans after meeting with nonprofit credit counselors.

    If you are still employed, one option, not without risk, is to take a loan from your employer-sponsored retirement plan. You can set up a repayment plan for three years or less without owing interest. The downside, of course, is that you won't be earning growth on that money in your 401(k) plan. Also, you will want to weigh how secure your position is: if you lose your job or leave the company voluntarily, you will have to repay your retirement plan loan quickly, sometimes within 90 days.

    Kay suggests that one way to start working on retiring debt today is to have a family meeting and decide on a strategy. "Decide how you're going to pay it off, but be smart about it," she says. One proven method of retiring debt Kay recommends is the snowball method, where you pay off the card with the highest interest rate. Once you've handled that, roll the payment you'd previously allocated to the highest interest credit card over to the next card, then both payments to the third and so on. "You have more money available to attack your debt," she says.

    Another method Kay recommends is paying forward any money you start saving in other areas. For example, she advises that people look at their insurance policies annually. Lower rates are generally available on an annual basis. If your insurer isn't offering them, shop around for one that will. If you save $300 a year on your car insurance, you can take that money and put it to work attacking your consumer debt.

    You might also want to consider downsizing your life before retirement. "Selling your home and using equity to pay off debt and buy something cheaper can allow you to get into a lower-cost housing situation and retire some debt," she says. This, in turn, will give you the kind of financial flexibility that you're looking for when you think about retiring your debts.

    Finally, Kay recommends that you attack your consumer debt in a strategic way that improves your credit score. That means lowering the balance on your most used cards for a bump in your FICO score. And while you might be tempted to put the balance onto a card with a low introductory rate, Kay cautions against that. "The problem is that you're going to take a hit on your credit, because every new card shortens your average credit history," she says. "It's a way to slowly but significantly deteriorate your FICO score if you keep rolling balances over.

     

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