"Love ever gives
Forgives, outlives--
And ever stands
With open hands
And while it lives
It gives.
For this is love's prerogative
To give and give, and give."[John Oxenham]
Dear Friends,
I challenge you these next few weeks to dwell on this poem and the message that it sends. For Christians, love and generosity cannot be separated. In fact, you could even go so far as to say that love is generosity.
Now, I'm not talking about generosity just as it relates to money. The way we give of our tithes and offerings is certainly one facet of generosity, but it does not encompass the whole meaning of the word. Generosity exists in our thoughts toward others, our acts of service, our daily relationships, and our attitudes. No matter what area of life, we can be generous.
If we give our money, but not our hearts, we've totally missed the point of Oxenham's poem and of Jesus' teachings. We are called to give and give and give--of everything, all the time.
Blessings,
Kenneth R. Roney, J.D.
President
PERSONAL PLANNER
IRAs - Regular and Roth
While Social Security will provide approximately 40% of the average person's retirement income, an Individual Retirement Account (IRA) is an essential addition for a Read More
While Social Security will provide approximately 40% of the average person's retirement income, an Individual Retirement Account (IRA) is an essential addition for a successful retirement. Your IRA has two main benefits—contributions to a regular IRA are from pre-tax income and there is tax-free growth. There is another version of an IRA called a Roth IRA that is funded with after-tax income.
Linda is in her middle working years and anticipates receiving Social Security when she retires. But she has several questions about whether she should also start funding an IRA.
How should I fund my IRA?
Is it a good idea to do an IRA rollover?
At what age should I start taking IRA distributions?
Should I take the minimum required distribution or a larger amount?
Funding the IRA
If you are not actively participating in another type of qualified retirement plan and are within an adjusted gross income limit, you may qualify to transfer a substantial sum each year into an IRA. The IRA contribution amount is $5,500 for 2015. If you are over age 50, you may also make an additional $1,000 "catch-up" contribution. The maximum IRA contribution amounts are indexed for inflation in increments of $500. In future years, the contribution amount will increase.
Because Linda is over age 50, she is able to contribute $5,500 and her catch-up amount of $1,000, for a total of $6,500 to her IRA for 2015.
Linda considers the options to create a regular IRA or a Roth IRA. Because she wants to receive the income tax deduction, she transfers the funds into a regular IRA and deducts the $6,500 on her federal tax returns.
IRA Rollovers
The majority of larger IRAs are funded through rollovers from retirement plans through your employer. If you have a qualified plan through your employment, upon separation from service or reaching a specific age, such as 70, you will usually have an option to rollover to a self-directed IRA.
Normally, your qualified plan through a business has been funded with pretax income. The IRA account also benefits from tax free growth. Therefore, the rollover will be from the other qualified plan into a regular IRA. Your IRA will continue to grow tax free, but future distributions to you will be taxable.
IRAs may be rolled over to a new custodian. The preferred method is to have a custodian-to-custodian transfer. If the funds are transferred directly from one IRA custodian to the new custodian, there is no tax.
While it is permissible for your custodian to transfer funds to you and then for you to make the rollover, your IRA custodian will withhold 20%. Because of the 20% withholding requirement, virtually all IRA rollovers are completed with the custodian-to-custodian method.
An IRA to Roth IRA rollover may also be permissible for you. Generally speaking, people with any adjusted gross income are permitted to transfer a regular IRA to a Roth IRA. The value of the IRA will be included in your taxable income, so you may owe a substantial income tax for the conversion.
The primary benefit of the conversion to the Roth is that a Roth IRA does not have a mandatory distribution requirement at age 70½. The funds may be permitted to grow tax free and, at the discretion of the owner, may be withdrawn tax free during retirement years. If the owner of a Roth IRA does not make withdrawals, then the Roth may be transferred to children, who may make tax free withdrawals over their life expectancy.
IRA Distributions
For a regular IRA, there are specific rules on both contributions and withdrawals. Withdrawals for distributions are generally not taken before age 59½. With limited exceptions—such as uniform distributions over a lifetime, disability, separation from employment after age 55, or other exceptions—there is a 10% excise tax in addition to the regular ordinary income tax on withdrawals before age 59½. Therefore, very few individuals take early withdrawals before age 59½.
Between ages 59½ and 70½, there is an optional period for withdrawals. The withdrawals are not required, but you may take withdrawal of any amount. Of course, for a regular IRA the amount withdrawn is taxable to you and no longer grows tax free in the fund. Therefore, you may not want to take withdrawals unless you actually need the funds for living expenses.
After you reach age 70½, there are required minimum distributions (RMDs). The distributions start at approximately 3.8% at age 71 but increase with age each year. The distribution is calculated using your balance on December 31 multiplied by the appropriate percentage, and must be taken by the end of the next year. If you fail to take your distribution, there is a 50% penalty, so an error or an intentional disregard of the RMD rules is quite rare.
SAVVY LIVING
How to Find a Better Medicare Prescription Drug Plan
I recently received a letter from my Medicare drug plan provider notifying me that they are increasing my co-pays next year. I’d like to look for a better plan but could use some guidance. What’s the easiest way to do this? Read More
I recently received a letter from my Medicare drug plan provider notifying me that they are increasing my co-pays next year. I’d like to look for a better plan but could use some guidance. What’s the easiest way to do this?
Cost increases and coverage changes are an annual event for many Medicare Part D prescription drug plans. Fortunately, during the open enrollment period (Oct. 15 – Dec. 7), you have the ability to shop and compare plans and choose one that better fits your needs and budget. Your new plan will go into effect Jan. 1, 2016. Here are some tips that can help with this process.
Shop Online
If you have Internet access and are comfortable using a computer, you can easily shop for and compare all Medicare drug plans in your area and enroll in a new plan online.
Just go to Medicare’s Plan Finder Tool at medicare.gov/find-a-plan, type in your ZIP code or your personal information, enter how you currently receive your Medicare coverage, select the drugs you take and their dosages and choose the pharmacies you use. You’ll get a cost comparison breakdown for every plan available in your area so you can compare it to your current plan.
This tool also provides a five-star rating system that evaluates each plan based on past customer service records, and suggests generics or older brand name drugs that can reduce your costs.
It’s also important to keep in mind that when you’re comparing drug plans don’t judge a plan strictly by its monthly premium cost. Low-premium plans are often associated with higher prescription co-payments and may end up being more expensive. Look at the “estimated annual drug costs” that shows how much you can expect to pay over a year in total out-of-pocket costs – including premiums, deductibles and co-pays.
Also, be sure the plan you’re considering covers all of the drugs you take with no restrictions. Most drug plans today place the drugs they cover into price tiers. A drug placed in a higher tier may require you to get prior authorization or try another medication first before you can use it.
Need Help?
If you need some help choosing a new plan, contact your State Health Insurance Assistance Program (SHIP) that provides free one-on-one Medicare counseling in person or over the phone. They also conduct seminars during the open enrollment period at various locations throughout each state. To find the contact information for your local SHIP visitshiptacenter.org or call the Eldercare Locator at 800-677-1116.
Shrinking Donut Hole
You also need to know that Medicare’s “donut-hole,” the coverage gap in which you must pay out-of-pocket for your drugs, continues to shrink. In 2016, you will get a 55% discount on brand-name drugs and the federal subsidy for generic medications will rise to 42%.
The 2016 coverage gap begins when your total drug cost exceeds $3,310 (that includes your share and the insurer’s share of the costs) and ends when your total out-of-pocket costs reach $4,850. After that, your Part D plan usually covers around 95% of your remaining drug costs for the year.
Low-Income Assistance
You may be eligible for the federal Low-Income Subsidy known as “Extra Help” that pays Part D premiums, deductibles and co-payments if you meet the income requirements. Single persons must have income under $17,655 and assets worth less than $13,640 to qualify. Married persons must have income below $23,895 and assets worth less than $27,250 to qualify. For more information or to apply, call Social Security at 800-772-1213 or visit socialsecurity.gov/extrahelp.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
A God-Honoring Estate Plan
Like so many others, my wife and I found ourselves without a current and viable estate plan in place. Read More
Like so many others, my wife and I found ourselves without a current and viable estate plan in place. Although we had drawn up a pair of wills years before, it was a shock to see how out-dated and inadequate they had become. Our circumstances, finances, and interests had changed; but our wills had not. A last will and testament is supposed to provide instructions to family and friends about who and what was important to the will-maker in life. With time, our estate plan no longer reflected those values. And to just discard our old wills would leave us without a viable estate plan, causing state laws to take over and leaving our assets to be distributed to distant or unintended relatives, or possibly to the state itself. Neither result was what we wanted to leave behind.
So began our journey to develop a God-honoring estate plan that would include our family and the local church, as well as national and international ministries, after we are gone.
In 1985, my wife and I purchased a small family business from my parents. Over the years, the Lord blessed our hard work and commitment to quality products and services. After operating the business for a number of years, we began to realize that we had many employees who depended on us as well as a great deal of corporate responsibilities. It became obvious we needed an estate plan that would deal with the business issues as well as our personal goals.
About that time, we were invited to our first World Challenge in Tacoma, Washington. The effectiveness of the JESUS Film was very impressive. We appreciated how the JESUS Film Harvest Partners teams work with indigenous peoples to identify pastoral and lay leadership, and how they help establish preaching points and organize local churches to disciple new believers. As a result of that invitation to the Tacoma World Challenge, we included the JESUS Film Harvest Partners ministry in our new estate plan.
Some time later, in a more recent World Challenge, my wife and I were struck with the urgency of getting JESUS Film teams and equipment out to the field. We realized we didn't want to wait until we were dead and gone to support this ministry in a more meaningful way. We wanted to be a part of the ministry during our lifetime. So, we decided to make an immediate and significant pledge.
In order to implement this pledge, we engaged the services of the Foundation. With their help, we were able to establish an endowment fund, which will be funded over a five-year period. Each year, 95 percent of the endowment earnings will go the JESUS Film Harvest Partners ministry and the remaining 5 percent will be plowed back into the endowment to help grow the fund.
After we are gone, our estate will be distributed to various ministries through the Foundation in a God-honoring way. We are so impressed with the Foundation and thankful that we can have the joy of giving now and seeing the results because of our endowments. We are confident the ministries that are important to us will keep on receiving income in perpetuity. WASHINGTON NEWS
Clinton, Carson, Jindal and Rubio on Taxes
Four presidential candidates advanced specific tax proposals this week. Read More
Four presidential candidates advanced specific tax proposals this week. Candidate Hillary Clinton proposed a tax on high-frequency trading. Her campaign published a brief and stated, “The growth of high-frequency trading (HFT) has unnecessarily burdened our markets and enabled unfair and abusive trading strategies that often capitalize on a two-tiered market structure with obsolete rules. The tax would hit HFT strategies involving excessive levels of order cancellations, which make our markets less stable and less fair.”
The Clinton proposal lacks specifics, but may be similar to a financial transactions tax advocated by candidate Bernie Sanders. His proposal is to levy a 0.5% tax on all stock trades and use the estimated $47 billion per year to fund free public college education.
Two different Washington tax research groups commented on the proposals. While they could raise revenue, the risk is that a financial transaction tax would cause the trading and jobs to migrate to London, Hong Kong or another financial center.
In a media interview, Dr. Ben Carson was asked how to enhance the economy. He pointed to the $2 trillion held overseas by U.S. corporations. Carson proposed to allow the companies to repatriate or return the funds to the U.S.A. without tax if at least 10% of the amount was used in “empowerment zones” in major cities. The urban zones would be designed to create good jobs. Carson suggested that creating these jobs for the unemployed would be “the biggest stimulus since the New Deal and FDR, and wouldn’t cost the taxpayers a penny.”
Louisiana Governor Bobby Jindal published a fairly comprehensive tax plan. He would reduce the current seven income tax brackets to a tax of 2% on the first $10,000, 10% on the next amount up to $90,000 and 25% over $90,000. The brackets would be doubled for married couples.
Gov. Jindal also suggests a $30,000 per year tax-free savings plan. He eliminates all itemized deductions except charitable gifts and mortgage interest, with a mortgage limit of $500,000. The plan repeals the corporate income tax, the alternative minimum tax and the estate tax. All capital gains would be taxed as ordinary income.
A nonpartisan Washington organization, the Tax Policy Center, suggested that the plan would stimulate the economy but could result in $9 trillion in lost federal revenue over a decade.
Sen. Marco Rubio spoke at a conference in New York this week. He emphasized the importance of new “sharing economy” companies such as Uber or Handy. The Handy organization allows individuals to connect with plumbers, maids or handymen. Handy employees earn approximately $18 per hour for their services.
Rubio notes that these service persons are not technically employees, but do not fit very well within the independent contractor status. He suggests that we follow some of the European nations and create a third status known as a dependent contractor. Companies such as Handy could then provide additional training and recommended actions to the service personnel based on customer feedback.
Editor’s Note: There is one aspect of the comprehensive plan by Bobby Jindal that is positive for philanthropy. As has been true of several other proposed comprehensive tax plans, lower tax brackets are funded through elimination of deductions. However, the plans all contemplate retaining the charitable income tax deduction. While it is still a very long way to tax reform, the principle to retain the charitable and mortgage deductions and eliminate other itemized deductions is very favorable for philanthropy.
FINANCES
Stocks - Diet Soda Sales Hamper Pepsi's Earnings Read More
PepsiCo, Inc. (PEP) announced its third quarter results on Tuesday, October 6. Both revenue and income declined during the quarter.
PepsiCo reported revenue of $16.33 billion. This was a 5% decline from the $17.22 billion earned during the same period last year.
"We are pleased with our performance for the third quarter of 2015," said Pepsi Chairman and CEO Indra Nooyi. "Despite ongoing volatility in many of our key international markets, we delivered strong organic revenue growth, gross margin expansion and double-digit core constant currency EPS growth. Based on our year-to-date results and our outlook for the remainder of the year, we are increasing our full-year core constant currency EPS growth target to 9%."
Pepsi's net income fell 73% during the quarter to $533 million or $0.36 per share. Taking out one-time charges, earnings were $1.35 per share, which was better than analyst estimates of $1.44 per share.
Like Coca-Cola, Pepsi has faced challenges with consumers that are trending away from sodas and other carbonated beverages. Of particular concern is the decline in diet soda sales, supposedly due to concern over the common artificial sweetener aspartame. In effort to appeal to health-conscious consumers, Pepsi debuted a new Diet Pepsi without aspartame. The early results were not promising with sales of Diet Pepsi falling 6.5% during the quarter.
PepsiCo, Inc. (PEP) shares ended the week at $99.47, up 4.8% for the week.
Domino's Pizza Reports Earnings
Domino's Pizza, Inc. (DPZ) announced its third quarter results on Thursday, October 8. While the company's bottom line numbers showed improvement compared to last year, they were below analyst estimates.
The company reported that revenue increased 8.5% to $484.7 million. This was slightly below estimates for revenue of $487.1 million.
"We are pleased with the sustained strong sales and continued momentum behind store growth," said Domino's President and CEO J. Patrick Doyle. "The things we are doing are working, and we will continue to aggressively lead the industry."
Domino's reported that net income during the quarter rose 6.2% to $37.8 million or $0.67 per share. Estimates for net income were higher at $0.74 per share.
While Domino's bottom-line numbers fell below Wall Street estimates, the numbers were still relatively strong. As a large multinational company, Domino's has been hurt by the strong U.S. dollar, which reduces the value of international sales. On a positive note, the company reported domestic and international same-store sales growth of 10.5% and 7.7%, respectively.
Domino's Pizza, Inc. (DPZ) shares ended the week at $105.38, down 1.6% for the week.
China Woes Plague Yum! Brands
Yum! Brands, Inc. (YUM) announced its third quarter results on Tuesday, October 6. The operator of KFC, Taco Bell and Pizza Hut reported disappointing earnings that reflected the company's ongoing struggles with its China division.
The company reported that sales increased 2% to $3.43 billion. However, this was lower than estimates calling for sales of $3.68 billion.
"We're pleased same-store sales turned positive and we achieved restaurant margins of nearly 20% in our China business," said Yum! Brands CEO Greg Creed. "However, the pace of recovery in our China Division is below our expectations. Outside of China, our Taco Bell and KFC Divisions continued to sustain their positive sales momentum while Pizza Hut was relatively flat. Given our lower full-year expectations in China, combined with additional foreign exchange impact, we now expect 2015 EPS growth to be well below our target of at least 10%."
Yum! reported net income of $421 million or earnings per share of $0.95. Estimates were for earnings per share of $1.07.
Yum! Brands overall numbers continue to be dragged down by the company's struggles in China. In recent years a number of health-related scandals have hurt the company's reputation in the fast growing Chinese market. The lingering effects of those scandals along with a slowing Chinese economy continue to dog the company. Same-store sales in China increased only 2% whereas expectations were for growth of nearly 10%.
Yum! Brands, Inc. (YUM) shares ended the week at $70.25, down 15% for the week.
The Dow started the week of 10/5 at 16,502 and closed at 17,085 on 10/9. The S&P 500 started the week at 1,954 and closed at 2,015. The NASDAQ started the week at 4,742 and closed at 4,830.
Bonds - Treasury Yields Reach October Highs Read More
PepsiCo reported revenue of $16.33 billion. This was a 5% decline from the $17.22 billion earned during the same period last year.
"We are pleased with our performance for the third quarter of 2015," said Pepsi Chairman and CEO Indra Nooyi. "Despite ongoing volatility in many of our key international markets, we delivered strong organic revenue growth, gross margin expansion and double-digit core constant currency EPS growth. Based on our year-to-date results and our outlook for the remainder of the year, we are increasing our full-year core constant currency EPS growth target to 9%."
Pepsi's net income fell 73% during the quarter to $533 million or $0.36 per share. Taking out one-time charges, earnings were $1.35 per share, which was better than analyst estimates of $1.44 per share.
Like Coca-Cola, Pepsi has faced challenges with consumers that are trending away from sodas and other carbonated beverages. Of particular concern is the decline in diet soda sales, supposedly due to concern over the common artificial sweetener aspartame. In effort to appeal to health-conscious consumers, Pepsi debuted a new Diet Pepsi without aspartame. The early results were not promising with sales of Diet Pepsi falling 6.5% during the quarter.
PepsiCo, Inc. (PEP) shares ended the week at $99.47, up 4.8% for the week.
Domino's Pizza Reports Earnings
Domino's Pizza, Inc. (DPZ) announced its third quarter results on Thursday, October 8. While the company's bottom line numbers showed improvement compared to last year, they were below analyst estimates.
The company reported that revenue increased 8.5% to $484.7 million. This was slightly below estimates for revenue of $487.1 million.
"We are pleased with the sustained strong sales and continued momentum behind store growth," said Domino's President and CEO J. Patrick Doyle. "The things we are doing are working, and we will continue to aggressively lead the industry."
Domino's reported that net income during the quarter rose 6.2% to $37.8 million or $0.67 per share. Estimates for net income were higher at $0.74 per share.
While Domino's bottom-line numbers fell below Wall Street estimates, the numbers were still relatively strong. As a large multinational company, Domino's has been hurt by the strong U.S. dollar, which reduces the value of international sales. On a positive note, the company reported domestic and international same-store sales growth of 10.5% and 7.7%, respectively.
Domino's Pizza, Inc. (DPZ) shares ended the week at $105.38, down 1.6% for the week.
China Woes Plague Yum! Brands
Yum! Brands, Inc. (YUM) announced its third quarter results on Tuesday, October 6. The operator of KFC, Taco Bell and Pizza Hut reported disappointing earnings that reflected the company's ongoing struggles with its China division.
The company reported that sales increased 2% to $3.43 billion. However, this was lower than estimates calling for sales of $3.68 billion.
"We're pleased same-store sales turned positive and we achieved restaurant margins of nearly 20% in our China business," said Yum! Brands CEO Greg Creed. "However, the pace of recovery in our China Division is below our expectations. Outside of China, our Taco Bell and KFC Divisions continued to sustain their positive sales momentum while Pizza Hut was relatively flat. Given our lower full-year expectations in China, combined with additional foreign exchange impact, we now expect 2015 EPS growth to be well below our target of at least 10%."
Yum! reported net income of $421 million or earnings per share of $0.95. Estimates were for earnings per share of $1.07.
Yum! Brands overall numbers continue to be dragged down by the company's struggles in China. In recent years a number of health-related scandals have hurt the company's reputation in the fast growing Chinese market. The lingering effects of those scandals along with a slowing Chinese economy continue to dog the company. Same-store sales in China increased only 2% whereas expectations were for growth of nearly 10%.
Yum! Brands, Inc. (YUM) shares ended the week at $70.25, down 15% for the week.
The Dow started the week of 10/5 at 16,502 and closed at 17,085 on 10/9. The S&P 500 started the week at 1,954 and closed at 2,015. The NASDAQ started the week at 4,742 and closed at 4,830.
Bonds - Treasury Yields Reach October Highs Read More
Treasury yields rose on Friday, October 9, driving prices down as investors became more comfortable investing in stocks and other riskier assets on signs of improvement in the global economy. The weekly rise in bond yields is an improvement from last week when the 10-year yield reached a 5-month low.
Factoring into investors' decisions to pull away from government bonds this week was the release of the minutes from the Federal Reserve's latest policy meeting. The minutes showed that many members are reluctant to raise interest rates until there is an uptick in inflation. While this was good news for investors, there were other indications in the Fed's minutes that "most" members believe economic conditions will warrant a rate increase before year end.
"There is still a chance that the Fed will raise rates in 2015," said Sean Simko, Head of Fixed-Income Portfolio Management at SEI Investments. "However, I place a low probability on that. The risk is we see further softening in global economic data, which will drive yields lower, testing the 1.95% level."
During early Friday trading, the benchmark 10-year yield had risen to 2.12% from 2.11% yesterday. That is a significant turnaround from last week's closing yield of 1.99%.
Internationally, investors have found comfort in the fact that the economic situation in China appears to be stabilizing or, at the very least, has not worsened. However, the overall global economy is still weak, which has prompted the European Central Bank and the Bank of Japan to consider further asset-purchase programs to jumpstart growth in their respective economies. That in turn has helped boost yields in the United Kingdom and Germany.
The 10-year Treasury note yield finished the week of 10/5 at 2.10% while the 30-year Treasury note yield finished the week at 2.93%.
CDs and Mortgages - Jobs Report Drives Rates Lower Read MoreFreddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, October 8. The report showed interest rates falling this week in response to a disappointing September jobs report released last Friday.
The 30-year fixed rate mortgage averaged 3.76% this week. This represents a decrease from last week when it averaged 3.85%. Last year at this time, the 30-year fixed rate mortgage averaged 4.19%.
This week, the 15-year fixed rate mortgage averaged 2.99%. This is down from last week when it averaged 3.07%. The 15-year fixed rate mortgage averaged 3.36% one year ago.
"Calling the September jobs report disappointing is an understatement," said Sean Becketti, Chief Economist at Freddie Mac. "The sputtering U.S. economy added only 142,000 jobs. To make matters worse, there were downward revisions to the prior two months. Hourly wages were flat, and the labor force participation rate fell to 62.4%, the lowest rate since 1977. In response, Treasury yields dipped below 2% triggering a 9 basis point tumble in the 30-year mortgage rate to 3.76%."
The money market fund finished the week of 10/5 at 0.3%. The 1-year CD finished at 0.6%.
______________________________
Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, a college or university, Global Mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access updated financial and gift planning information, please visit our website.
_____________________________The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
Phone: (913) 577-2983
Factoring into investors' decisions to pull away from government bonds this week was the release of the minutes from the Federal Reserve's latest policy meeting. The minutes showed that many members are reluctant to raise interest rates until there is an uptick in inflation. While this was good news for investors, there were other indications in the Fed's minutes that "most" members believe economic conditions will warrant a rate increase before year end.
"There is still a chance that the Fed will raise rates in 2015," said Sean Simko, Head of Fixed-Income Portfolio Management at SEI Investments. "However, I place a low probability on that. The risk is we see further softening in global economic data, which will drive yields lower, testing the 1.95% level."
During early Friday trading, the benchmark 10-year yield had risen to 2.12% from 2.11% yesterday. That is a significant turnaround from last week's closing yield of 1.99%.
Internationally, investors have found comfort in the fact that the economic situation in China appears to be stabilizing or, at the very least, has not worsened. However, the overall global economy is still weak, which has prompted the European Central Bank and the Bank of Japan to consider further asset-purchase programs to jumpstart growth in their respective economies. That in turn has helped boost yields in the United Kingdom and Germany.
The 10-year Treasury note yield finished the week of 10/5 at 2.10% while the 30-year Treasury note yield finished the week at 2.93%.
CDs and Mortgages - Jobs Report Drives Rates Lower Read MoreFreddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, October 8. The report showed interest rates falling this week in response to a disappointing September jobs report released last Friday.
The 30-year fixed rate mortgage averaged 3.76% this week. This represents a decrease from last week when it averaged 3.85%. Last year at this time, the 30-year fixed rate mortgage averaged 4.19%.
This week, the 15-year fixed rate mortgage averaged 2.99%. This is down from last week when it averaged 3.07%. The 15-year fixed rate mortgage averaged 3.36% one year ago.
"Calling the September jobs report disappointing is an understatement," said Sean Becketti, Chief Economist at Freddie Mac. "The sputtering U.S. economy added only 142,000 jobs. To make matters worse, there were downward revisions to the prior two months. Hourly wages were flat, and the labor force participation rate fell to 62.4%, the lowest rate since 1977. In response, Treasury yields dipped below 2% triggering a 9 basis point tumble in the 30-year mortgage rate to 3.76%."
The money market fund finished the week of 10/5 at 0.3%. The 1-year CD finished at 0.6%.
______________________________
Are you a Nazarene Legacy Partner (NLP)? The answer is “YES” if you have designated any gift to a Nazarene ministry in your will, bequest, or estate plan. This could be a tithe on your estate, an insurance beneficiary designation to your local church, a college or university, Global Mission, or any other Nazarene ministry you support.
Send us your name and contact information by reply email and indicate “I am a Nazarene Legacy Partner” and we will add your name to our NLP honor roll. To model generosity inspires others to do the same. Thank you for your interest in gift planning. To access updated financial and gift planning information, please visit our website.
_____________________________The Global Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200
Lenexa, Kansas 66220 United States
Phone: (913) 577-2983
Fax: (913) 577-0898
Toll free: 866-273-2549
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