The Bears Are Mauling & The Dangers of Equity Indexed Annuities

The Bears Are Mauling & The Dangers of Equity Indexed Annuities

The Money Wise guys are back at it, kicking off the show with a review of last week’s numbers from Wall Street. The Dow was down 3.0%, the S&P 500 was down 2.7%, and the NASDAQ was down 3.3%. YTD the Dow is now down 1.0%, with the S&P 500 and the NASDAQ still in the black. The Money Wise guys discuss why the Dow rolled over and went into the red, why they didn’t trust the run-up that January gave us, the hotter CPI, PPI, and CPE numbers, and so much more.

What is the CPE?

We mention CPE several times in this episode. It's a buzzword we’ve discussed quite a bit in recent weeks, too, so let’s dig into the details of what it means. 

First of all, CPE stands for Consumer Personal Expenditures Index. According to the Bureau of Economic Analysis, the CPE is a measure of prices that people living in the United States, or those buying on their behalf, pay for goods and services. It’s released each month as part of the Personal Income & Outlays report. The PCE price index is known for capturing the impact of inflation across a wide range of consumer expenses. In times of deflation, the CPE captures the impact of lowered inflation, too.

In the past, the Federal Reserve used Core CPE as the most important data point in measuring the impact of inflation and setting monetary policy. However, as we discussed in last week’s show, the CPE has been replaced by the Fed’s newest measure: Supercore Inflation.

In the second hour, the Money Wise guys share warnings as they discuss the very real dangers of Equity Indexed Annuities. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.