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Market-Moving News[i]
Weekly Market Recap
As we close the books on 2024, the financial markets had a remarkable year. The S&P 500 surged 24% driven by stellar performances in tech and communication services as well as the continued dominance of the "Magnificent 7." Looking ahead to 2025, key trends like sticky inflation, potential new tariffs, and expected Fed rate cuts could shape the year. Join Kara Murphy on Money with Murphy as she unpacks the highlights of 2024 and what investors should watch for in the year ahead.
Thought of the Week – click here for more details
It was another great year for U.S. equities. The S&P 500 rose 24% and hit 57 new all-time highs along the way, the most since 1928. Once again, we have AI to thank for this spectacular performance. The Magnificent 7 rallied 48%, and for the second year in a row, technology, communication services and consumer discretionary were the top performing sectors, while semiconductors & semiconductor equipment was the top performing industry. Nevertheless, gains were slightly less concentrated: the Mag 7 contributed 55% of the index return this year vs. 63% in 2023. This is partly due to an expanded recognition of AI beneficiaries. The utilities sector, for instance, rallied 20% this year as markets priced in elevated electricity demand from data centers. In fact, the second-best performing stock in the S&P 500 was an electrical utility.
But it’s not all about AI. After five consecutive quarters of contraction, earnings growth for the S&P 500 ex. Mag 7 inflected positively in 2Q24. Financials in particular improved profitability as capital markets and commercial loan activity increased, supporting a 28% return for the sector. In 2025, broader earnings growth should drive broader leadership. We got a taste of this rotation in 3Q24 when value outperformed growth for the first time since 2022. Health care, however, has lagged throughout the year, partly due to a slower post-COVID earnings recovery, but mainly amid regulatory uncertainty. Despite entering October up 13%, it sold off 11% over the course of the fourth quarter. Indeed, markets will be watching Washington closely this year. Deregulation, tax and tariff policies could all elevate volatility. Investors should ensure tech’s outperformance hasn’t left portfolios unprotected or unprepared.
Philosophy Quote of the Week[ii]
Where, Who, What, and Why
“A person who doesn’t know what the universe is doesn’t know where they are. A person who doesn’t know their purpose in life doesn’t know who they are or what the universe is. A person who doesn’t know any one of these things doesn’t know why they are here. So what to make of people who seek or avoid the praise of those who have no knowledge of where or who they are?”
Marcus Aurelius, Meditations, 8.52
The late comedian Mitch Hedberg had a funny story he told in his act. Sitting down for an on-air interview, a radio DJ asked him, “So who are you?” IN that moment, he had to think, Is this guy really deep or did I drive to the wrong station?
How often are we asked a simple question like “Who are you?” or “What do you do?” or “Where are you from?” Considering it a superficial question – even if we consider it at all – we don’t bother with more than a superficial answer.
But, gun to their head, most people couldn’t give much in the way of a substantive answer. Could you? Have you taken the time to get clarity about who you are and what you stand for? Or are you too busy chasing unimportant things, mimicking the wrong influences, and following disappointing or unfulfilling or nonexistent paths?
Tax Tips[iii]
New Year Financial Resolutions
The new year signifies a fresh start to financial responsibilities. Responsibilities that translate to financial commitments like an upgraded home, buying your family toys and trips, saving for retirement and education.
Now is the time to look at your finances, spending habits, debts, credit cards, insurance coverages, future, and activities that put them in the status they are in today. While many people are comfortable with their financial situation they strive to improve because they have goals.
Whether you are poor, average, or wealthy, everyone needs to look at their financial picture at least on an annual, quarterly, monthly or preferably every payday basis. If you review on a payday basis, the constant review of the budget helps you know where your money is going ahead of time. It’s like looking out the windshield of a car instead of the rearview mirror. Knowing where your money is going helps you stay on track, so your journey to your financial goals is a guided path rather than a blind walk.
As with any successful accomplishment you must start with a guide, plan, blueprint, charter or budget! Use whatever word that helps you understand the need for financial planning consistency. Consistency is the key to financial freedom. Financially successful people know that if something can help them start or continue on their patch to financial freedom, it is consistency in financial planning. Such a plan keeps you focused and on track towards the destination. The same process helps you lose weight, complete your education or break bad habits!
Here are Six Steps to Help you Financially in 2025
- Pay off holiday debts
This should be done within 90 days of the New Year. Polan a budget on how much you will spend and let each partner keep check on the other. Each person who writes down a budget has a better chance of sticking to it rather than just talking about it. There is no try, there is only do or do not!
- Track your spending and keep a budget
Keep every receipt for the first three months, for absolutely everything you spend. Budgets are made each payday, before they are paid. You will know where every dollar goes ahead of time!
- Start a savings plan
New Year holiday budget or keep your change in a piggy bank. It doesn’t matter how the journey of a 1000 miles starts as long as it starts with that first step. Always start a savings plan with an emergency fund. This should be 3-6 months living expenses and this fund is only used in an emergency (medical, fired from or quit work, car breaks down – real emergencies!).
- Pay down debt
Smallest debt first, then move up and pay the next smallest, and so on. While doing this only make minimum payments on unpaid debt until it is next in line. While paying these large debts don’t worry about the interest rate, just the size of the debt. Most people have a income problem, not an expense problem. The fastest way to make money is to eliminate debt.
- Review your credit report every quarter
You are entitled to a free credit report from each agency annually (Transunion, Equifax, Experian). Requesting these helps prevent identity theft and improves your credit status if errors are found. A free credit report doesn’t mean a free credit score.
- Check your insurance policies
Talk to one of our CERTIFIED FINANCIAL PLANNER™ Professionals to help you decide how much and what kind of insurance you might need. If you have someone who depends on your income, you may need 7-10 times your annual income for life insurance coverage. Most people over-insure their home. There is no need to insure land, just the replacement value of your home’s building and contents.
Each step is independent of the other and can be started and continued on its own. By completing each step regularly you will minimize debt and build your net worth. Remember that re-visiting, reviewing and renewing your goals regularly will help keep you on track to financial success!
Remember – always contact your tax professional for help! That’s what you pay them for!
2024 Key Financial Data
An Overview of 2024 Financial Data – CLICK HERE FOR A COPY OF THE 2024 KEY FINANCIAL DATA CARD
The 2024 financial landscape introduces a variety of tax and planning changes that are essential for individuals, families, and businesses to understand as they navigate their financial strategies. From updated tax brackets and retirement plan limits to key deadlines and exemptions, the year provides opportunities and challenges for optimal planning.
Tax Rates and Brackets
The 2024 tax rate schedule outlines distinct brackets for individuals, couples, and households. For single filers, the 10% rate applies to incomes up to $11,600, while those earning over $609,350 are taxed at the highest rate of 37%. Married couples filing jointly have a broader range, with incomes over $731,200 subjected to the top rate. For estates and trusts, the highest rate begins at $15,200, emphasizing the need for strategic estate planning to minimize liabilities.
Long-term capital gains and qualified dividend tax rates remain favorable, with a 0% rate for lower-income brackets. However, gains exceeding $518,900 (for single filers) face a 20% tax, underscoring the importance of portfolio management. Additionally, the 3.8% surtax on net investment income applies to individuals with modified adjusted gross incomes (MAGI) exceeding $200,000 or $250,000 for married couples filing jointly.
Retirement and Health Planning
Retirement contribution limits reflect inflation adjustments. Defined contribution plans now have a $69,000 cap, while 401(k) and similar plans allow elective deferrals of up to $23,000, with an additional $7,500 for individuals aged 50 and above. SIMPLE plans also see an increase, with a $16,000 deferral limit and $3,500 catch-up contributions. These updates encourage individuals to maximize their retirement savings, leveraging tax-advantaged accounts to secure financial stability.
For health-related savings, Health Savings Accounts (HSAs) permit contributions of $4,150 for individuals and $8,300 for families, with a $1,000 catch-up provision for those over 55. Deductible expenses and co-pays are capped at $8,050 for individuals and $16,100 for families, making HSAs an appealing option for managing healthcare costs.
Estate and Gift Planning
Significant increases in exclusions for estate, gift, and generation-skipping transfer taxes reflect broader inflationary trends. The exclusion amount now stands at $13.61 million per individual, while the annual gift exclusion rises to $18,000. These updates create opportunities for wealth transfer while minimizing tax liabilities.
Key Deadlines and Standard Deductions
Taxpayers must adhere to critical deadlines, such as the April 15 filing date and quarterly estimated tax payments. For itemized deductions, December 31 remains the deadline for completing charitable contributions or capital gains transactions. The standard deduction increases to $29,200 for married couples filing jointly and $14,600 for single filers, offering relief to taxpayers who don’t itemize.
Social Security and Medicare Adjustments
Social Security beneficiaries reaching full retirement age in 2024 can expect a maximum monthly benefit of $3,822, with earnings limits adjusting to reflect inflation. Medicare premiums also see incremental increases, depending on income, alongside adjusted deductibles for Parts A and B.
The 2024 financial data presents numerous updates that impact various facets of financial planning. Whether managing retirement savings, navigating tax obligations, or planning for health and estate needs, staying informed is critical for individuals to optimize their strategies and ensure financial well-being in the year ahead.
[i]https://am.jpmorgan.com/content/dam/jpm-am-aem/americas/us/en/insights/market-insights/wmr/weekly_market_recap.pdf. Accessed 01.08.2025. See page 2 for important disclosures.
[ii] Holiday, Ryan. The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. Kindle edition, page 14. Accessed 01.08.2024.
[iii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, pages 11-14. Accessed 01.08.2025.