Happy Monday. We hope that you had a relaxing weekend. Below are some current headlines, including an update on US/China trade relations, high-fee mutual funds underperformance, and the hype around CES.
INVESTING & THE ECONOMY
The clash reflects American anxiety about China’s rise as a potential competitor in telecommunications and other technology. Trump wants Beijing to roll back initiatives like “Made in China 2025,” which calls for the state-led creation of global competitors in such fields as robotics and artificial intelligence. American officials worry those might erode U.S. industrial leadership.
The underperformance gets worse when we focus on even higher-cost mutual funds. Again, take the example of large-cap U.S. stocks. When we look at funds that charge more than 2% annually in fees, we see the average 10-year return fall another 0.60 percentage point, down to 10.01%.
More than 26% of mortgage borrowers who used Federal Housing Administration-insured loans got assistance from a relative to make the down payment in the 12 months through September, up from about 22% in 2011, according to data released late last year as part of the agency’s annual report.
Alphabet’s Google Assistant made a splash at CES last year, both via Google’s own colorful exhibits and efforts to promote Assistant via the booths of third-party exhibitors. Google promises to have an even larger presence this year, as it tries to use CES to gain mindshare relative to Amazon.com’s (AMZN – Get Report) Alexa among hardware makers and the tech press.
One reason for the increase in student debt is simply because more Americans are going to college than ever before. This trend is unlikely to change. The Georgetown Center on Education and the Workforce predicts that by 2020, 65 percent of all jobs in the American economy will require education beyond high school.