With the weather getting cooler, it may seem like the perfect time to curl up on the couch with a good book.
But as you snuggle up with the latest crime-fiction bestseller and a pumpkin spice latté, you could be missing out on some of the latest money news happening around the world.
Luckily, we’re here to clue you in. So take a short break from that murder mystery to read about what a Fed report has to say about the state of Americans' personal finances, the dollar's recent rally, and the implications of the Alibaba IPO everyone's been talking about.
News Flash #1: The U.S. dollar flexes its muscles.
America is going strong again—at least when it comes to its currency. The U.S. dollar index, which measures the strength of the dollar against some other world currencies, ended September at a four-year high.
Meanwhile, the euro sunk to the lowest it's been since November 2012 (in fact, the European Central Bank is doing some very U.S.–style fiscal stimulus of its own), and the yen is struggling to stay afloat.
The dollar's run-up essentially signals that currency traders may have faith in a U.S. recovery, although some analysts think it may not be enough to stave off inflation. Still, there could be one immediate benefit for you: On that next overseas vacation, you should be able to get more travel bang for your buck.
News Flash #2: The Fed finds Americans’ finances are (mostly) a flop.
Every few years, the Federal Reserve publishes the most comprehensive picture of the country’s financial health in its Survey of Consumer Finances, which asks thousands of Americans to weigh in on their income, savings habits, investments and debt.
The most recent report reflects changes in Americans’ money life in the years following the end of the Great Recession. And while there are some silver linings, the findings paint a mostly disappointing picture.
Here's the big bright spot: Americans seem to be making headway on paying down their debt. Among middle-class families, less than 40% had mortgage debt, while 38% held credit card balances—down from 50.5% and 46%, respectively, in 2007.
But the rest of the findings didn't exactly scream progress. In fact, for everyone but the top 10% of earners, incomes have fallen since the last survey. And it's also the wealthy who've tended to benefit from this year's market rallies: The percentage of households owning stocks dropped for all income brackets—except for the top 10%.
Perhaps the most surprising bit is that, even though college graduates are still earning more than high-school-only grads, they’re not making that much more. In 1989 the median income of families led by young college grads was two times greater than that of families led by high school grads. Today, there’s only a 52% difference.
The big picture? Everyone seems to be feeling a bit of stagnancy when it comes to their money, but the wealth gap may be here to stay.
News Flash #3: Alibaba’s IPO sparks a mad investing scramble.
No, it's not the latest Disney movie to hit the big screen. Alibaba is China's largest e-commerce company, which had the biggest initial public offering in history, reaching $92.70 per share and raising more than $25 billion—making many of its stockholders instant millionaires.
Massive IPOs like Alibaba's are important to note because they can cause rumbles in the markets: Investors who want a piece of a company's pie may choose to shed other stock to free up cash, and indeed, big names like Facebook and Google saw their share prices fall slightly in the days leading up to Alibaba's debut on the New York Stock Exchange, leading some analysts to call it "The Baba Effect."
On top of that, Yahoo's share price took a tumble because prior to the IPO, U.S. investors could only tap into Alibaba via Yahoo, which owned a large stake in the company.
But even with the frenzy behind Alibaba's stock, the Chinese giant wasn't immune to the whims of the U.S. stock market: Its shares fell 4% the next trading day.
Last but not least, here are some more thought-provoking money stats to ponder the next time you curl up on your couch:
• To charge or not to charge? For most Millennials, it’s not even a question. A new survey from Bankrate.com finds that nearly two thirds of consumers in this demo don’t have a single credit card.
• According to the Center for American Progress, it's more expensive than ever to be a middle-class American. Key costs like child care, higher education, health care, housing and retirement rose by more than $10,000 in 12 years.
• Thank the bull markets: New data reveals that Americans’ net worth has increased 10% in the last year to a total of $81.5 trillion, due in large part to a rise in the stock market.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked-to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.