FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
The labour market for new college graduates is improving (Think Advisor)
This year’s college graduates will have an easier time finding jobs than those in years passed, according to a report released by the New York Federal Reserve. “While successfully navigating the job market will likely remain a challenge, it appears that finding a good job has become just a little bit easier for the class of 2015,” according to authors Jaison Abel and Richard Deitz. The report states the unemployment rate for new graduates is down to 5%, which should help ease the burden of the $US30,000 in student loans graduates average. However, underemployment remains an issue with 44.6% of graduates not being utilised at their full capability. That number was at 38% in 2000.
Is the rise in bond yields temporary or will it continue? (Charles Schwab)
Global bond yields have reversed sharply in recent weeks, buoyed by optimism regarding the prospects for global growth. Despite the increasing possibility first quarter US GDP will be revised negative, bond yields have rebounded on the belief the Federal Reserve will hike rates later in the year. Investors have also had to grapple with an improving European economy and the belief the slowdown in China is dissipating. According to Schwab’s Kathy Jones, “Our long-term view continues to be that the Fed’s approach to tightening monetary policy will be slow and that the potential upside in yields will be limited due to structurally slower economic growth and lower inflation than in the past.”
REITs are looking into retail (Wealth Management)
Street retail is gaining interest from REITs, and will be a staple in many publically traded portfolios going forward, notes RBC Capital Markets analyst Rich Moore. Moore says there are 11 “institutional” street retail markets in the US that can “reach up to $US3,240 per sq. ft., and such properties trade at cap rates in the 4 per cent to 5 per cent range, and sometimes lower.” These markets include “Fifth and Madison Avenues in New York City, Michigan Avenue in Chicago and Union Square in San Francisco, among other easily recognisable streets,” according to the note.
Department of Labour extends comment period on fiduciary proposal (Financial Planning)
The Department of Labour announced it will extend the comment period 15 days to give the financial services industry more time to consider the controversial proposal. The extension means the industry will have 90 days after the August 10 public hearings to comment on the proposal which Financial Planning says, “Extends a fiduciary standard to brokers and advisors providing investment advice on retirement accounts.” Lawmakers were asking for a 45 day extension while stakeholders wanted the original 75-day period to stand.
Sen. Bernie Sanders (I-Vermont), a Democratic presidential hopeful, wants American colleges to be tuition-free. Sanders will introduce his legislation on Tuesday, which calls for tuition-free higher education to students at four-year colleges. “Countries like Germany, Denmark, Sweden and many more are providing free or inexpensive higher education for their young people,” and, “We should be doing the same,” Sanders suggested.
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