Economic Update

A Bull or a Bear in the China Shop?

Data released by China’s National Bureau of Statistics indicated a slight increase in retail sales (4.6%) and industrial production (4.5%) in August. Will these increases offset the slowdown in China’s real estate sector and consequent default by property developers? Are the Chinese government’s efforts to stimulate the economy by allowing banks to lend more money and cutting interest rates working? Why does any of this matter?

Effect on Trade

China is the world’s second-largest economy, and its annual growth rate has fallen from its usual 8% to around 3%. The effect on U.S. trade is likely to minimal because China does not import many American goods, partly due to tariffs imposed by former President Trump and kept, in large part, in place by President Biden. Of the total value of U.S. exports in 2022, only 7.5% was attributable to China.

Effect on Inflation

If the Chinese government decides to encourage exports and uses other countries to assemble Chinese parts, given the strength of the U.S. dollar compared to the Chinese renminbi, inflation in the U.S. could slow. And yet, as a presidential election approaches, any increase in Chinese imports that would affect American manufacturing could become a hot political issue.

Effect on Investors

Analysts with Charles Schwab do not believe that a “global financial contagion is a likely outcome” of China’s economic slowdown. Still individual companies may feel the effects. Apple, for example, generates about 20% of its revenue in China. Of the 8500 aircraft that Boeing expects to deliver in the next 20 years, 20% are to China. In its second quarter 2023 earnings call, Caterpillar projected a decline in sales greater than the 5% to 10% it forecasted just a quarter earlier.

We’re constantly watching the U.S. and global economies and are happy to answer any questions you may have. Just give us a call.

Lifestyle

Travel by Private Jet

While inching along in the hour-long security checkpoint line at Denver International Airport last month, Todd and Pat had plenty of time to daydream about private jet travel. If they were to seriously consider it, what would they need to know?

Where to Start

A quick Google search produces Private Jet Card Comparisons, a site that lists “over 250 private jet card programs.” Private jets are also available through fractional ownership programs and on-demand charters.

Research, Research, Research

Traveling by private jet is an investment so, like any investment, it pays to do your homework before you commit. Outline when you plan to travel in the next year or so, whether your dates are flexible, the number of people who will be flying with you, and whether you (or they) need or want any amenities (e.g., travelling with pets). There are some illegal charters out there, so verify the operator with the Federal Aviation Administration.

Read the Fine Print

Like commercial carriers, private jet companies charge premium prices for peak days, seasons, and time of day as well as fees for cancellation. Prices vary based on type of aircraft, advanced booking time, whether a flight is nonstop and demand on various routes.

Security Lines

When flying via private jet, there is a security process but, in most cases, it’s much quicker since the jets use private jet terminals (or fixed-base operators). That convenience alone makes private jet programs a daydream worth checking into!

How We Help

Retirement Planning: The Big (and Little) Picture

We met recently with a client to review her entire benefit package:

• Health, dental, and vision insurance
• Life and disability Insurance
• Health Savings and Flexible Spending Accounts
• Paid time off
• Employer-sponsored retirement plan

We created a comprehensive list of these benefits, and more importantly, looked at each as it relates to this person’s overall retirement plan. Bringing the big picture into focus and digging into the details are both necessary if one is to use benefits effectively. Knowing the value of each benefit and how it works (e.g., forfeiture and vesting provisions) is a critical component of a comprehensive retirement planning.

If you’d like to view your plans up close and from 30,000 feet, let us know. We’re happy to help.

Advisory Services offered through Obsidian Personal Planning Solutions, LLC. Securities are offered through Triad Advisors, member ​FINRA/SIPC.​ Obsidian Personal Planning Solutions, LLC, and Obsidian Personal Planning Solutions, Inc, are not affiliated with Triad Advisors.