Market-Moving News[i]
Record heights
The NASDAQ and the S&P 500 pushed their record levels higher again, posting weekly total returns of 3.5% and 2.0%, respectively. For the NASDAQ, it was the tenth positive week out of the past eleven. The Dow gained 0.7% and remained 1.6% below its record set in mid-May.
Jobs growth cools
June’s gain of 206,000 jobs exceeded economists’ consensus forecast for around 190,000, but a rise in unemployment to 4.1% left the jobless rate at the highest level since November 2021. Moreover, April’s and May’s initially reported jobs growth figures were revised downward by a total of 111,000, adding to the recent data indicating a modest slowdown in jobs growth.
% Yields Decline
Friday’s jobs report appeared to strengthen expectations of a potential U.S. Federal Reserve rate cut later this year, as yields of government bonds fell. The yield of the 10-year U.S. Treasury was about 4.28% at Friday’s close, down from 4.37% at the end of the previous week. Yields of 2- and 30-year notes also declined.
Oil rises
Oil prices climbed for the fourth week in a row to the highest level in more than two months, with U.S. crude trading above $83 per barrel on Friday afternoon. The latest gain came as a weekly report showed a decline in U.S. oil inventory, confirming recent forecasts from analysts who expect tight supplies throughout the summer.
Bitcoin falls
A recent decline in the price of the most widely traded cryptocurrency accelerated as Bitcoin fell below $54,000 at one point on Friday, the lowest level in more than four months. In afternoon trading, the price recovered somewhat to about $56,500. As recently as June 5, Bitcoin was trading above $71,000.
Small caps lag
An index that tracks U.S. small-cap stocks trailed a large-cap benchmark by a wide margin for the week, extending small caps’ year-to-date underperformance. For the week, the Russell 2000 Index was down 1.0% at Friday’s close versus a 1.8% total return for its large-cap peer.
Dividend growth
Companies in the S&P 500 modestly increased their dividend payments in this year’s second quarter as a handful of large-cap stocks began paying dividends for the first time. Companies in the S&P 500 paid out $153.4 billion in dividends, up more than 1% from $151.6 billion in this year’s first quarter, according to S&P Dow Jones Indices.
Inflation report ahead
A Consumer Price Index report scheduled for release on Thursday will show whether May’s stable inflation extended into June. The CPI report covering May showed an annual rate of 3.3%—better than economists’ consensus forecast for 3.4%, but unchanged from the prior month’s figure.
The Week Ahead: July 08-12
- Monday
- Consumer credit, U.S. Federal Reserve
- Tuesday
- Small Business Optimism Index, National Federation of Independent Business
- Wednesday
- Wholesale inventories, U.S. Census Bureau
- Thursday
- Consumer Price Index, U.S. Bureau of Labor Statistics
- Weekly unemployment claims, U.S. Department of Labor
- Federal budget, U.S. Department of the Treasury
- Friday
- Producer Price Index, U.S. Bureau of Labor Statistics
- University of Michigan Index of Consumer Sentiment, preliminary result
Philosophy Quote of the Week[ii]
Stop monkeying around
“Enough of this miserable, whining life. Stop monkeying around! Why are you troubled? What’s new here? What’s so confounding? The one responsible? Take a good look. Or just the matter itself? Then look at that. There’s nothing else to look at. And as far as the gods go, by now you could try being more straightforward and kind. It’s the same, whether you’ve examined these things for a hundred years, or only three.”
Marcus Aurelius, Meditations, 9.37
Tax Tips[iii]
Powers of Attorney (POA)
A lot of people are unaware that a Durable Power of Attorney may be necessary, even if you are married. That way your spouse will be able to act on your behalf if you are incapacitated. The POA document may allow others to speak and/or act for you in tax, financial, legal or healthcare matters. The person you give permission to act on your behalf is called an “Agent.”
Agents have your permission toact, sign, and obligate agreements on your behalf. The agent must put your best interests in front of everyone else (a fiduciary responsibility). All agents have a fiduciary responsibility to protect the principal (the person granting the power) in all situations.
If you have a Mental Health or Healthcare Power of Attorney, ensure the Health Insurance Portability and Accountability Act (HIPAA) inclusion paragraph is included. That allows you to receive personal medical information about the principal you represent.
If you are an Agent, ensure you understand the Agency law of the state you live in. Consult an attorney and have them give you instructions in writing as to your responsibilities as a POA. When signing documents as a POA, always sign your name and the initials “POA” after your signature. Do not sign the name of the principal.
Types of Powers of Attorney
Immediate Power of Attorney: upon signing, the Agent can act on your behalf.
Springing Power of Attorney: springs into action upon a certain condition (such as incompetence or incapacitation or absence).
Durable Power of Attorney: husbands, wives, and partners should have a Durable Power of Attorney on each other. A Durable POA allows financial and legal decisions to be made on your behalf by an agent.
Healthcare Power of Attorney: appoints an Agent to make medical decisions for you.
Mental Health Power of Attorney: makes mental health decisions for you (can check you in or out of a mental health facility).
Living Will: directs actions to be taken of condition is terminal or death imminent. This is not a regular will; it is instructions to discontinue care or “pull the plug” under certain conditions. This is sometimes called a “do not resuscitate.”
Health Tip of the Week[iv]
Eye health: Myths and facts
Did anyone ever tell you not to cross your eyes because they might stick? Is that true?
Learn the facts about this and other common eye health myths:
Myth: Reading in poor light will hurt your eyes.
Fact: Before the invention of electric light, most nighttime reading and other work was done by dim candlelight or gaslight. Reading in dim light today won't harm your eyes any more than it did your ancestors' eyes or any more than taking a photograph in dim light will damage a camera.
Myth: Using your eyes too much will 'wear them out.'
Fact: You wouldn't lose your sense of smell by using your nose too much or your hearing by using your ears too much. Your eyes were made for seeing. You won't lose your vision by using your eyes for their intended purpose.
Myth: Wearing eyeglasses that are too strong or have the wrong prescription will damage your eyes.
Fact: Eyeglasses change the light rays that your eyes receive. They do not change any part of the eye itself. Wearing glasses that are too strong or otherwise wrong for your eyes cannot harm your eyes — although it might result in a temporary headache. At worse, the glasses will fail to correct vision and make you uncomfortable because of blurriness. However, it will not result in damage to any part of your eye.
Myth: Wearing eyeglasses will weaken your eyes.
Fact: Eyeglasses worn to correct nearsightedness, farsightedness, astigmatism or presbyopia will not weaken your eyes any more than they will permanently solve these types of vision problems. Glasses are simply external optical aids that correct vision for people who suffer from refractive errors. Exceptions are glasses given to children with crossed eyes (strabismus) or lazy eye (amblyopia). These glasses are used temporarily to help straighten their eyes or improve vision. Not wearing such glasses in these instances may lead to permanently defective vision.
Myth: Crossing your eyes may make them permanently crossed.
Fact: Your eye muscles are meant to allow you to move your eyes in many different directions. Looking left, right, up or down will not force your eyes to stay permanently crossed. Crossed eyes result from disease, from an uncorrected refractive error, or from muscle or nerve damage, not from forcing your eyes into that position.
Myth: Having 20/20 vision means that your eyes are perfect.
Fact: The term "20/20" denotes a person with excellent central vision. However, they may have other types of vision, such as side vision, night vision or color vision, that might be imperfect. Some potentially blinding eye diseases, such as glaucoma or diabetic retinopathy, can take years to develop. During this time, they are harming parts of the inner eye, but the central vision can remain unaffected.
Jennifer Garvey, M.D., is an ophthalmologist in La Crosse and Sparta, Wisconsin.
[i]https://www.jhinvestments.com/weekly-market-recap#investment-returns, accessed 07.08.2024.
[ii] Holiday, Ryan. The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. Kindle edition, page 205. Accessed 07.08.2024.
[iii] Hockensmith, Robert F. 52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money. Kindle edition, page 120, accessed 07.08.2024.
[iv]https://www.mayoclinichealthsystem.org/hometown-health/speaking-of-health/eye-health-myths-and-facts, accessed 07.08.2024.