Market-Moving News[i]
Tech-driven rally
The S&P 500 and the NASDAQ posted big weekly gains and snapped a three-week string of declines as strong earnings from technology companies helped offset disappointment over the latest economic and inflation reports. The NASDAQ finished more than 4% higher for the week while the S&P 500 was up nearly 3%; the Dow lagged, posting a fractional gain.
GDP slowdown
U.S. economic growth remained in positive territory in this year’s first quarter, but it slowed markedly from the previous quarter and fell short of most economists’ forecasts. Amid still-elevated inflation, GDP grew at an annualized rate of 1.6% in the latest period, down from a 3.4% figure in last year’s fourth quarter.
Earnings momentum
Near the midpoint of earnings season, the earnings growth outlook has improved relative to the previous week. FactSet reported on Friday that analysts were expecting S&P 500 companies to post a 3.5% first-quarter earnings increase compared with the same quarter a year earlier, based on results released so far and projections for companies that haven’t yet reported. Just a week earlier, the projected growth rate was 0.5%.
Sticky Inflation
Ahead of a U.S. Federal Reserve meeting, a report released on Friday showed that the Fed’s preferred gauge for tracking inflation remained above policymakers’ 2.0% long-term target rate. The Personal Consumption Expenditures Price Index rose at a 2.8% annual rate in March excluding food and energy prices—unchanged from February’s core inflation figure, and a tenth of a percentage point above what most economists had forecast.
Yields up again
Yields of U.S. government bonds rose for the fourth week in a row, and the yield of the 2-year Treasury briefly eclipsed 5.00% on Thursday for the first time since last November, when the yield reached the highest level since 2006. The yield of the 10-year bond finished the week around 4.67%.
Anxiety eases
An index that tracks investors’ expectations of short-term U.S. stock market volatility recorded its first weekly decline of April, retreating from its highest level in nearly six months. The Cboe Volatility Index finished down about 23% from a recent high recorded on April 15.
Sentiment sours
The recent trend of higher-than-expected inflation numbers appears to be weighing on U.S. consumers, as a measure of consumer sentiment fell, reversing course following recent gains. The University of Michigan’s sentiment survey findings released on Friday marked a turnaround from March, when the university’s sentiment index climbed to its highest level in 32 months.
Busy week ahead
In addition to more quarterly earnings reports, the new week will bring a U.S. Federal Reserve policy meeting that concludes on Wednesday and a jobs report on Friday. The Fed is widely expected to keep interest rates unchanged; the jobs report will show how April’s jobs growth compared with March’s bigger-than-expected gain of 303,000 jobs.
The Week Ahead: April 29-May 3
- Monday
- No major reports scheduled
- Tuesday
- S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index
- Consumer Confidence Index, The Conference Board
- Wednesday
- U.S. Federal Reserve Board concludes two-day policy meeting; Fed Chair Jerome Powell holds press conference
- ADP National Employment Report, ADP
- Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics
- Institute for Supply Management’s manufacturing index
- Construction spending, U.S. Census Bureau
- Thursday
- Factory orders, U.S. Census Bureau
- Weekly unemployment claims, U.S. Department of Labor
- Trade balance, U.S. Census Bureau
- Friday
- Jobs & unemployment, U.S. Bureau of Labor
- Consumer credit, U.S. Federal Reserve
- Institute for Supply Management’s nonmanufacturing index
Philosophy Quote of the Week
Washing Away the Dust of Life
“Watch the stars in their courses and imagine yourself running alongside them. Think constantly on the changes of the elements into each other, for such thoughts wash away the dust of earthly life.”
Marcus Aurelius, Meditations, 7.47
Tax Tips[ii]
Deductions Allowed When You Do Not Itemize
There are two ways to reduce your income on your income tax returns. Reducing your income is a way to also reduce the income tax you may be responsible for. The two methods are known as itemizing your deductions and using the standard deduction. Many taxpayers find they are better off using the standard deduction, which is a pre-arranged tax deduction the IRS allows taxpayers to claim on their tax returns, based on marital status, among other things. If you are over 65 and/or blind, there is an extra $1,500 for each, added to the standard deduction. Some deductions are available without having to itemize and are called deductions FOR Adjusted Gross Income (AGI). Deductions for AGI are ALWAYS better than deductions from AGI.
Here are other tax deductions you can also deduct in addition to the standard deduction:
- IRA contributions. There are certain rules allowing this deduction, depending on whether your or your spouse are in a retirement plan at work, and depending on how much income you earn.
- Self-Employment Retirement Savings Plans (SEP, Keogh, SIMPLE)
- Student loan interest
- Tuition fees
- Self-Employment Health Insurance Payments (you can deduct 100% of health insurance premiums and part of qualified long-term care policy premiums, including Medicare insurance) for business owners, partners or shareholders of S-corporations.
- Alimony paid to former spouse (not allowed for divorces decreed after 2018).
- Health Savings Accounts. This is a medical savings plan where you can contribute money for future medical bills and get a tax deduction for doing so.
- Self-Employment Social Security and Medicare Tax. Self-employed pay 100% of any Medicare and Social Security tax to the IRS, but they also receive a 50% deduction on the front of their tax return as a benefit of being self-employed.
- Moving expenses paid because of change in job – for members of the military only.
- Early withdrawal penalties from CDs, savings accounts, insurance contracts.
- Educator expenses for supplies purchased for classrooms.
- National Guard or Reservist expenses for those who work out of town overnight.
- Many of these “For AGI” deductions have limits. Be sure to ask your tax professional what the limits are for this year.
Health Tip of the Week[iii]
7 Steps for Managing Grief and Loss
Dana Sparks, December 17, 2014
LE SUEUR, Minn. — Grief is summarized as sadness felt after suffering loss. Although that’s a fine cursory definition, it doesn’t really give grief true meaning. Grief is a deep and sometimes complex response to loss. Behavioral health provider and social worker at Mayo Clinic Health System Jessie Wolf says, “Even though it’s often associated with death, grief can be the result of any sort of loss or major life change. Losing your job, getting divorced, even moving — these all can elicit feelings of grief.”
Initial grief frequently comes as acute emotional pain. While it may seem insurmountable when it first grasps hold of your life, there are ways to cope with grief. Supplying yourself with knowledge and grieving tactics is the best way to combat your loss. Wolf provides some tips to help you during the grieving process.
Give yourself permission to feel.
Grieving is a normal part of dealing with loss. But you can’t grieve if you don’t allow yourself the opportunity. Be sure to recognize the need to grieve and let it run its natural course. Your emotional health will be better served if you face your grief.
Write a letter to the deceased loved one.
If you’ve recently lost a loved one, try expressing your feelings through a letter. Writing a message about your emotions can be cathartic and aid with coping.
Journal about positive memories.
This is similar to writing a letter and can apply to any sort of loss. Even if you’ve lost your house, a journal about positive memories and experiences will help you focus on the good times. In terms of a loved one’s death or divorce, journal about why you loved them and the joy you shared together.
Talk to someone.
Even though talking to someone about your feelings seems simple, it can be extremely challenging. People may feel safer shutting everyone else out during their time of grief. Resist that urge and find a confidant to share with.
Understand grief affects everybody.
Grief is not age-specific or limited to certain populations. Children, teens and adults all grieve. Recognize this fact and expect signs of grief from all involved parties, no matter the age. And remember, everyone has their own unique form of grieving. There is no textbook way to grieve.
Lend a supportive ear to others.
Maybe someone else’s grief doesn’t affect you in the same way or much at all. It’s still important to support your loved ones during their grieving process. Be there to listen and comfort them.
With kids, listening and being supportive is critical. Be sure to let them work through the process, and answer their questions directly as they arise. Neglecting to answer questions or answering questions in a roundabout way may lead a child to make up stories and even blame themselves for the death or loss.
Prepare for recurring grief.
Holidays, birthdays and other events can spark grief — even years after a loss. Recognize these triggers and prepare to handle the grief as needed.
“Loss and subsequent grieving are challenging. But with proper coping techniques and an understanding of the grieving process, you will be better prepared to handle grief and loss,” adds Wolf.
[i]https://www.jhinvestments.com/weekly-market-recap#investment-returns, accessed 04.29.2024.
[ii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, pages 78-79, accessed 04.29.2024.
[iii]https://newsnetwork.mayoclinic.org/discussion/7-steps-for-managing-grief-and-loss/, accessed 04.29.2024.