As I stated in my letter last month, the continuing decline in oil prices is stunning! Gasoline prices peaked this year at the end of April at close to $3.80 per gallon. The price remained at that level until the end of June, and then dropped precipitously to the present. At the start of November, $3.00 per gallon gas or less has become the norm. This is the lowest price for energy since 2010, just prior to the run-up in oil prices triggered by the Arab Spring in 2011. In the United States, gasoline prices account for 3% of personal spending – not an insignificant amount.

 So, why did the stock market dip last month only to recover very quickly and travel to new highs this week? Bull Markets climb “walls of worry” and corrections are a normal part of the process. There is always disconcerting news accompanying these declines – this last one had Ebola, European economic slowdown and geopolitical concerns at the forefront, but ultimately, the current reports on corporate earnings have propelled the U.S. equity markets to these higher levels.

 America is the strength of the globe right now. Many companies have highlighted the slowdown in Europe but few of these same global companies see weakness in the U.S. Not only did companies benefit from strength in the United States, they managed slower growth in Europe effectively and generated the typical amount of upside to third quarter earnings estimates of 3 – 4 %. Corporate America’s ability to manage costs, sustain profit margins, and maintain strong balance sheets has continued to impress, and LPL Financial Research does not expect these conditions to change anytime soon.

 Another positive today is the rising household net worth that is providing support to the consumer. House hold net worth is households’ holdings of assets (real estate, automobiles, and computers; but also financial assets such as stocks, bonds, annuities, retirement plans, savings accounts, etc.) minus the debt taken on to finance the purchase of those assets. Household net worth at the end of the second quarter of 2014 (the latest available data) stands at an all-time high of $81 trillion. Household net worth has increased by $8 trillion (or around 10%) over the past year, and by more than $26 trillion (or nearly 50%) since early 2009, providing solid support for consumer spending. With gains in stocks, bonds and real estate prices in the third and fourth quarters of 2014, and the continued reluctance of consumers to take on too much debt, household net worth is likely to continue to move higher through year end 2014 and into 2015.

 Thanksgiving is coming soon and we at Legacy Wealth Planning wish you the best of holidays! You will receive a special Thanksgiving hello from us in a few days and the annual Buckaroo Calendar will go out in early December. All the best – Mark

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. No strategy assures success or protects against loss.  Some of this research material has been prepared by LPL Financial. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Referenced material:  LPL Financial Weekly Economic Commentary and LPL Financial Weekly Market Commentary, both dated November 11, 2014.  Approved Tracking # 1-328800