Weekly Market Commentary

September 10, 2018

 

The Markets

Remember: Volatility is normal.

Major U.S. stock market indices climbed into record territory during August and then gave back some gains last week.

Strong economic growth and rising wages have the potential to push inflation – increases in prices of everyday goods – higher than the Fed’s 2 percent target. The Fed battles inflation and promotes financial stability by raising the Fed funds rate. Usually, higher rates make borrowing more expensive and slow economic growth, so it is something to keep up with.

Rising rates in the United States have an effect on emerging markets, too. Colin Dwyer of National Public Radio reported higher interest rates in the United States have enticed investors and they have moved money out of riskier emerging markets investments to the states.

Why are Nordic countries at the top of the world happiness report? It’s a question Freakonomics Radio explored in August. They asked Jeff Sachs, a professor at Columbia University, who is also a special adviser to the United Nations Secretary General on the Sustainable Development Goals.

The World Happiness Report ranks 156 countries by the happiness of their citizens. The countries that top the list tend to have high scores in all six of the variables considered to measure well-being. These include income, healthy life expectancy, social support, freedom, trust, and generosity.

Currently, the happiest countries in the world are:

  1. Finland
  2. Norway
  3. Denmark
  4. Iceland
  5. Switzerland
  6. Netherlands
  7. Canada
  8. New Zealand
  9. Sweden
  10. Australia

The United States is ranked number 18. That has something to do with our priorities, according to the interview with Sachs. “We have the paradox that income per person rises in the United States, but happiness does not…the United States is falling behind other countries, because we are not pursuing dimensions of happiness that are extremely important: our physical health, the mental health in our community, the social support, the honesty in government.”

Focus On The Positive

“If I were to ask all of you to try and come up with a brand of coffee – a type of coffee, a brew – that made all of you happy, and then I asked you to rate that coffee, the average score in this room for coffee would be about 60 on a scale of 0 to 100. If, however, you allowed me to break you into coffee clusters, maybe three or four coffee clusters, and I could make coffee just for each of those individual clusters, your scores would go from 60 to 75 or 78. The difference between coffee at 60 and coffee at 78 is a difference between coffee that makes you wince and coffee that makes you deliriously happy. That is the final, and I think most beautiful lesson…that in embracing the company of human beings, we will find a surer way to true happiness.”

–Malcolm Gladwell, Journalist and author