Market-Moving News[i]
Bullish reaction
In the wake of a two-week surge in market volatility, the major U.S. stock indexes recorded their strongest weekly gains of 2024. The NASDAQ surged more than 5%, the S&P 500 added 4%, and the Dow rose 3%, lifted by encouraging data on inflation, retail sales, and consumer sentiment.
Inflation moderation
A key measure of consumer price inflation slipped below 3.0% for the first time since early 2021, and a separate report on wholesale prices came in better than forecast, reinforcing expectations for an interest-rate cut next month. The Consumer Price Index in July increased 2.9% from the same month a year earlier while the Producer Price Index rose 2.2%.
Retail rebound
Recent concerns about prospects of a recession eased as a monthly report on U.S. retail sales beat expectations. The 1.0% month-over-month sales gain in July surpassed economists’ consensus forecast for around 0.4%. Another encouraging sign came later on Thursday, when new claims for unemployment benefits fell relative to the previous week.
Sentiment comeback
An indicator that tracks U.S. consumer sentiment rose for the first time in six months. While Friday’s preliminary reading from the University of Michigan’s Consumer Sentiment Index exceeded most economists’ expectations, August’s reading of 67.8 remained far below a recent high of 79.6 in February. Consumers’ expectations of inflation over the next year remained at their lowest level since December 2020.
Gold glitters
Gold futures pushed their record levels higher for the third week in a row, and the commodity topped the $2,500-per-ounce level on Friday. Friday afternoon’s price of around $2,545 was up more than 20% year to date.
Earnings scorecard
Major retail companies reported results as quarterly earnings season neared an end. As of Friday, analysts were expecting S&P 500 companies overall to post a 10.9% second-quarter earnings increase compared with the same quarter a year earlier, according to FactSet. While that figure was down modestly from expectations a couple weeks earlier, it was well above analysts’ 8.9% forecast entering earnings season in early July.
Tech rebound
Information technology stocks that pulled the broader stock market lower in the previous week’s sell-off were among the leaders of the latest week’s sharply positive results. The tech sector's 7.6% average gain was a big reason why the NASDAQ outperformed the S&P 500 and the Dow, which have lower weightings in tech than the NASDAQ.
Fed’s summer agenda
Investors and economists will turn their attention to the Rocky Mountain town of Jackson Hole, Wyoming, where the U.S. Federal Reserve will hold its annual three-day economic policy symposium beginning Thursday, August 22. Fed Chair Jerome Powell is among the featured speakers, with an address scheduled on Friday.
The Week Ahead: Aug 19-23
- Monday
- Conference Board Leading Economic Index for the U.S.
- Tuesday
- No major reports scheduled
- Wednesday
- Release of minutes from the July 30-31 meeting of the U.S. Federal Reserve
- Thursday
- Existing home sales, National Association of Realtors
- Weekly unemployment claims, U.S. Department of Labor
- Friday
- U.S. Federal Reserve Chair Jerome Powell’s speech at conference in Jackson Hole, Wyoming
- New home sales, U.S. Census Bureau
Philosophy Quote of the Week[ii]
Corralling the Unnecessary
“It is said that if you would have peace of mind, busy yourself with little. But wouldn’t a better sayinbe do what you must and as required of a rational being created for public life? For this brings not only the peace of mind of doing few things, but the greater peace of mind of doing few things, but the greater peace of doing them well. Since the vast majority of our words and actions are unnecessary, corralling them will create an abundance of leisure and tranquility. As a result, we shouldn’t forget at each moment to ask, is this one of the unnecessary things? But we must corral not only unnecessary actions but unnecessary thoughts, too, so needless acts don’t tag along after them.”
Marcus Aurelius, Meditations, 4.24
Tax Tips[iii]
Tax Credits That Can Reduce Your Taxes
A tax credit is almost always better than a tax deduction because it reduces your taxes dollar-for-dollar. Tax deductions only reduce your income and then you compute the tax owed from the reduced income.
Some credits are refundable, which means even if you owe no tax, you may still get a refund check. Some are nonrefundable which only reduces your income tax to zero. The Adoption Tax Credit is an example of this. You can get approximately $15,950 (2023) in tax credits but it will not give you a refund if your taxes are less than the credit. It’s better to receive a refundable credit, but ANY credit is good and almost always better than a tax deduction.
Here are some tax credits you shouldn’t overlook when filing your federal tax return:
- The Earned Income Tax Credit (EITC)
- This is a refundable credit for people who work but don’t report much income. It can boost your refund by as much as $7,430 (2023 amounts). You may be eligible for the credit based on the amount of your income, your filing status, and the number of children in your family. If you are audited and it is determined that you are not eligible for the EIC you could be barred from applying for it for 10 years. Talk to your tax preparer and check out IRS.gov for their EITC Assistant Tool, or check out Publication 596, Earned Income Credit.
- The Child Tax Credit (CTC) and Dependent Care Credit (DCC)
- The Child Tax credit may reduce the taxes you pay by as much as $2,000 for each qualified child you claim on your return. The child must be under age 17 in 2023 and meet other requirements. Use the Interactive Tax Assistant Tool and see Publication 972 for more about the rules.
- The Dependent Care Credit can help you offset the cost of daycare or day camp for children under age 13. You may also be able to claim it for costs paid to care for a disabled spouse or non-child dependent of any age. See Publication 503. For 2023, you could save up to the $4,000 for one qualifying dependent and up to $8,000 for two or more qualifying dependents.
- Disabled children or other dependents usually qualify for CTC and/or DCC at any age, subject to income limits.
- The Retirement Savings Credit
- This helps workers save for retirement. You may qualify if your income is $73,000 o less in 2023 and you contribute to an IRA or a retirement plan at work. Check out Publication 590.
- The American Opportunity Credit & the Lifetime Learning Credit
- If you, your spouse, or your dependent take higher education classes you may be able to claim some education credits.
- The American Opportunity Credit is worth up to $2,500 per eligible student for the first four years at an eligible college or vocational school as they are earning a degree or other recognized credential AND are attending at least half-time or attended at least one academic period that started during the tax year. It helps cover the cost of tuition, books, supplies and fees. It is subtracted from your taxes but can also give you a refund of up to $1,000, if it’s more than your taxes.
- The Lifetime Learning Credit is limited to $2,000 per tax return per year regardless of how many students qualify. It can be used for all years of higher education, including classes for learning or improving job skills. It’s limited to the amount of your taxes and covers the cost of tuition, fees, books, supplies and equipment you must buy from the school.
- For Both Credits:
- The school generates a Form 1098-T – MAKE SURE IT’S ACCURATE!!
- File Form 8863, Education Credits, to claim
- You can only take one type of education credit per student. If more than one student qualifies, you can claim a different credit for each student.
- Eligible schools includes institutions that offer education beyond high school, including most universities, colleges, vocational and other post-secondary school.
- You may not claim the credit if someone else claims you ad a dependent.
- You can’t claim both credits for the same student or for the same expense in the same year.
- The credits are subject to income limits that could reduce the amount you can claim on your return.
- For nonresident aliens:
- If you are in the U.S. on an F-1 student visa, you usually file your federal tax return as a nonresident alien
- You cannot claim an education credit if you were a nonresident alien for any part of the tax year unless you elect to be treated as a resident alien for federal tax purposes.
- See Publication 519, U.S. Tax Guide for Aliens, for details.
- Income limits apply so these credits may be reduced or eliminated, based on your income.
- Foreign Tax Credits and Exclusions
- If U.S. taxpayers pay foreign taxes, either from wages or investments, the amount of the foreign taxes paid is considered a credit against U.S. tax. Use IRS Form 1116 or take the deduction on Schedule A, under the “Taxes” section. See your tax preparer to determine which is best for you.
- When Americans work overseas for foreign companies there is a nonrefundable exclusion allowed each year by the IRS. A non-refundable credit means the amount of the credit can reduce or eliminate federal income taxes but any excess credit will be given back to the taxpayer as a refund. You can’t get refunds from this credit only tax reductions but the exclusion, deduction or credit can reduce income taxes to zero.
- US taxpayers may be able to get a tax credit for paying taxes in a different country for earning income form interest or dividends.
- You can claim the taxes on Schedule A or Form 1116, whichever benefits you most.
- Some income earned overseas by working for foreign companies can be excluded each year from paying taxes on it. See your tax professional for this year’s excluded amount.
- Energy Credits
- Energy Efficient Home Improvement Credit (starting 2023)
- This credit is worth 30% of the cost of certain qualified energy-savings items you added to your main home last year. This includes items such as insulation, windows, doors/roofs, heat pumps, water heaters, air conditioners, furnaces, air circulating fans and others.
- You may be able to claim the credit fo the actual cost and installation of certain property. This may include items such as water heaters and HVAC systems. Each type of property has a different dollar limit.
- The credit has an annual limit of $1,200 but you can claim as much as $2,000 annually for heat pumps and water heaters.
- Your main home, second home or rental property must be in the U.S. to qualify for the credit.
- Get the written certification from the manufacturer that their prdocut qualifies for the tax credit. They usually post it on their website or include it with the product’s packaging. You can rely on it to claim the credit but do not attach it to your return – keep it with your tax records.
- Renewable Residential Energy Efficient Property Credit
- This tax credit is 30% of the cost of alternative energy equipment installed on or in your home. Qualified equipment includes solar hot water heaters, solar electric equipment and wind turbines, geothermal heaters and pumps.
- There is no dollar limit on the credit for most types of property. If your credit is more than the tax you owe, you can carry it forward on to next year’s tax return.
- The property must be in the U.S.
- Use form 5695, Residential Energy Credits, to claim.
- Energy Efficient Home Improvement Credit (starting 2023)
Health Tip of the Week[iv]
The best ways to prevent wrinkles
June 5, 2024
By Sara Youngblood Gregory
Wrinkles are a completely normal part of aging. In fact, some may argue that wrinkles are a privilege — a sign of adventure and a life fully lived. Others are less enthusiastic and would prefer to delay the onset of aging.
Either way, it is possible to protect your skin’s health and, to an extent, prevent wrinkles. But it’s best to approach skin care holistically, rather than from a fear of growing older.
Below, Mayo Clinic expert and dermatologist Elika Hoss, M.D., weighs in on skin care and the best strategies to prevent wrinkles.
What causes wrinkles?
Wrinkles happen as part of the natural aging process, says Dr. Hoss.
“As we age, we see a decrease in the building blocks of the skin such as collagen, elastin and hyaluronic acid. This makes the skin thinner, drier and less elastic over time, leading to the appearance of wrinkles, lines and creases.”
Static wrinkles — consistent lines on the face like a forehead crease — are caused by muscle movement, as well as a decrease in elasticity and collagen in the skin.
Dynamic wrinkles, which appear only when you move your face, are primarily caused by muscle movement. Habitual facial expressions — like when you smile with a friend, furrow your brow in concentration or squint to read a street sign — can create lines. Over time, dynamic wrinkles become static wrinkles — meaning they’re visible at rest — and look deeper with movement.
Aside from simply getting older, there are a number of factors that can contribute to both kinds of wrinkles — some of which you can control and some of which you can’t. Genetics can influence how and when you get wrinkles, as can certain environmental exposures. Common air pollutants harm the skin and play a part in wrinkle formation. Likewise, research has shown that smoking and UV exposure also contribute to premature aging and wrinkles.
Finally, Dr. Hoss says skin tone and melanin play a part in the onset of wrinkles.
“While light-skinned patients often see wrinkles and lines in their late 20s or early 30s, these can be seen almost a decade later in patients with darker skin.”
The basics of wrinkle prevention
The most important strategy for wrinkle prevention is sun protection, says Dr. Hoss.
“It is never too early to think about skin health. Good skin care should start in childhood with sunscreen use and sun protective measures such as seeking shade and wearing a hat.”
As a rule of thumb, Dr. Hoss recommends that people of all ages wear broad-spectrum SPF 30 sunscreen daily, rain or shine. You also should consider protective clothing like wide-brimmed hats and long sleeves when spending time outdoors.
For the face, Dr. Hoss recommends mineral sunscreens (like zinc oxide or titanium dioxide) as they are less likely to cause irritation or burning of the eyes and skin. The amount of sunscreen you use also matters in preventing skin damage — apply an entire nickel-sized amount to the face and reapply every two hours when outdoors.
“As a cosmetic dermatologist, I tell patients that sunscreen is the number 1, 2 and 3 anti-aging cream!” says Dr. Hoss.
Next, consider lifestyle factors that can contribute to wrinkles, like quitting smoking, limiting alcohol and eating a healthy diet rich in fruits, vegetables and lean proteins. Smoking, in particular, has dual aging effects. Not only does smoking harm collagen production, Dr. Hoss says the repetitive muscle movement can cause lip lines or “smoker’s lines” around the mouth.
Creating a skincare routine
In addition to sun protection, Dr. Hoss says a good skincare routine can help prevent wrinkles. There are a ton of products out there and it can be overwhelming to start a multistep skin care routine from scratch, so focus on small, consistent steps. For some people, they’re more likely to stick to a routine that is motivation-based (taking care of your skin health, setting aside time for pampering, etc.) than shame-based (feeling frustrated about your looks or fearful of aging).
In the morning, Dr. Hoss recommends starting with a topical antioxidant such as a vitamin C serum. Antioxidant products help fight damage from UV rays, blue light and pollution, says Dr. Hoss.
“They’ve also been shown to improve skin tone, brightness and collagen production. But we do not routinely recommend vitamin supplements by mouth for anti-aging or anti-wrinkle benefits.”
Then, apply a broad-spectrum SPF 30+ sunscreen to your face, neck and chest.
At night, Dr. Hoss recommends a three-step routine:
- Start with a gentle cleanser in the evening to remove dirt, debris and makeup from the day.
- Next, apply an anti-aging product such as a retinol, retinoid or peptide cream. Both retinol and retinoid are forms of vitamin A, though retinoid is typically only available through prescription. With consistent use, retinol/retinoid can reduce fine lines, improve pigmentation and stimulate collagen production. At first, it’s possible that retinol/retinoid will make your skin dry, red or generally more sensitive. After about 4 to 6 weeks of use, the skin typically adapts and improves overall. Be sure to onlyuse these products at night or as instructed, as their beneficial properties can be made inactive by sunlight. Retinoids can make the skin more sensitive to the sun, so it is crucial to use daily sunscreen and practice sun protective measures.
- Finally, apply a moisturizer. This will help to hydrate your skin, maintain the skin barrier, and prevent dryness and irritation, says Dr. Hoss. Moisturizers also can temporarily plump the skin, and thus improve lines and creases.
Can Botox prevent wrinkles?
Onabotulinum toxin A, commonly known by the brand name Botox, Dysport or Xeomin, can treat and may help prevent wrinkles, according to Dr. Hoss.
“Since repeated muscle movement can lead to static wrinkles, then paralyzing this movement with a neuromodulator such as botulinum toxin prevents the formation of wrinkles in areas of facial movement.”
Some people opt for smaller doses of Botox to soften muscle movement for a more natural appearance, sometimes referred to as baby Botox.
“This is a reasonable approach for patients who raise their brows often, or frown often, and are starting to see a line forming between their brows, or across their foreheads,” says Dr. Hoss. “If a neuromodulator is done properly, with appropriate injection points, dosages and treatment intervals, then the risks are quite minimal.”
Risks of Botox injections include bruising, asymmetry of facial features, unnatural results or in rare cases, allergic reaction, cautions Dr. Hoss. Rarely, the neuromodulator can impact nerve and muscle groups or cause side effects like vision problems, and difficulty talking, swallowing or breathing.
“The benefit [of neuromodulators] is that you can prevent deep wrinkles that end up being much more difficult, if not impossible, to treat later,” says Dr. Hoss.
Botox results tend to last 3 to 4 months per treatment.
There are other treatments to consider as well, including laser resurfacing, chemical peels, dermabrasion and fillers — all of which can help reduce wrinkles and rejuvenate skin. To know what treatment suits you and your skin best, work with your healthcare team to discuss your options.
[i]https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/market-updates/economic-update/ accessed 08.12.2024. https://www.kiplinger.com/investing/economy/this-weeks-economic-calendar, accessed 08.12.2024.
[ii] Holiday, Ryan. The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. Kindle edition, page 248. Accessed 08.20.2024.
[iii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, page 149-456, accessed 08.20.2024.
[iv]https://mcpress.mayoclinic.org/healthy-aging/the-best-ways-to-prevent-wrinkles/, accessed 08.20.2024.