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Weekly Market Update, Week Ending March 15, 2024

Weekly Market Update, Week Ending March 15, 2024

March 18, 2024

Market-Moving News[i]

Taking a breather

The major U.S. stock indexes slipped for the second week in a row, as the market’s solid daily gain on Tuesday was offset by declines later in the week. The modest two-week retreat was in contrast with the four-month rally that preceded it—a period when the S&P 500 rose 16 out of 18 weeks.

Sticky inflation

A pair of reports showed that inflationary pressures remain stubborn, even as U.S. interest rates remain at their highest level since 2001. A report issued Tuesday on consumer prices and a Thursday update on producer prices both recorded price gains that were slightly higher than most economists had expected. The Consumer Price Index came in at an annual 3.2% rate in February, up from 3.1% the previous month.  

Yield surge

Yields of U.S. government bonds rose as the latest inflation data produced a shift in the interest-rate outlook. After retreating the previous week to 4.08%, the yield of the 10-year U.S. Treasury bond rebounded to close at 4.31% on Friday.

 

Oil rally

Amid tightening oil supplies, the price of U.S. crude rose around 4% for the week, reaching a peak of around $81.60 per barrel on Thursday afternoon. Although the price slipped to around $81.00 on Friday, oil remained near its highest level in more than four months. 

Bitcoin retreat

 A week after hitting a record high, the price of the most widely traded cryptocurrency pushed even higher, eclipsing $73,000 on Wednesday. However, Bitcoin’s price pulled back later in the week, and it was trading around $68,000 on Friday, close to where it ended the previous week. Year to date, the cryptocurrency was up more than 60%.

Retail moderation

February’s 0.6% gain in U.S. retail sales was slightly below the consensus estimate of economists; however, the result marked an improvement from the 1.1% decline recorded in January. That updated January reading reflected an adjustment from an initial estimate of a 0.8% decline. 

Small caps lag

A benchmarket of U.S. small-cap stocks lagged its larger peers by a wide margin, expanding small caps' year-to-date performance deficit.  The Russell 2000 Index was down 2% for the week.

Fed ahead

The U.S. Federal Reserve is expected to keep its benchmark interest rate unchanged at its two-day meeting that concludes Wednesday, and Fed observers will watch for any clues about the timing of eventual rate cuts this year. Based on Fed funds futures trading, most investors expect the Fed’s pivot to rate-cutting mode is likely to begin in either June or July.

 

The Week Ahead:  March 18-22

  • Monday

Housing Market Index, National Association of Home Builders   

  • Tuesday

Housing starts, U.S. Census Bureau 

  • Wednesday

U.S. Federal Reserve Board concludes two-day policy meeting, Chair Jerome Powell holds press conference   

  • Thursday

The Conference Board Leading Economic Index for the U.S.

Existing home sales, National Association of Realtors

Weekly unemployment claims, U.S. Department of Labor 

  • Friday

No major reports scheduled 

 

Philosophy Quote of the Week: 

Impossible Without Your Consent

“Today I escaped form the crush of circumstances, or better put, I threw them out, for the crush wasn’t form outside me but in my own assumptions.”

Marcus Aurelius, Meditations, 9.13


 

Tax Tips

Tips About Taxable and Nontaxable Income[ii]

All Income is Taxable (unless the law specifically excludes it):

  • Taxable income includes money you receive, such as wages, and tips. It can also include noncash income from property or services. For example, both parties in a barter exchange must include the Fair Market Value (FMV) of goods or services received as income on their tax return.  And sometimes your Social Security Benefits are subject to tax as well.
  • Some types of income are NOT TAXABLE except under certain conditions, including:
    • Life insurance proceeds paid to you are usually not taxable. But if you redeem a life insurance policy for cash, any amount that is more than the cost of the policy is taxable.
    • Income from a qualified scholarship is normally not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable.  However, amounts used for room and board are taxable.
    • If you received a state or local income tax refund, the amount may be taxable. You should have received a Form 1099-G from the state agency that made the payment to you, if you received a state refund.  If you didn’t get it by mail, the agency may have provided the form electronically.  Contact them to find out how to get the form.  Report any state refund you got, even if you did not receive Form 1099-G.  You must still report it, even if you are not taxed on it.  This is known as the tax benefit rule.
  • Here some types of income that are usually NOT TAXABLE:
    • Gifts and inheritances
    • Child support payments
    • Welfare benefits
    • Damage awards for physical injury or sickness
    • Cash rebates from a dealer or manufacturer for an item you buy
    • Reimbursements for qualified adoption expenses
    • Alimony payments (divorces decreed after 2018)
    • Foster Care Payments
  • Social Security Benefits (Taxable or Not?)
    • If you are earning income and receiving Social Security benefits, you may find yourself paying taxes on some of your Social Security benefits. As much as 85% of your Social Security benefits can be subject to taxation.
    • YOU DO NOT PAY 85% TAX. 85% of your benefits could be taxed at whatever your tax bracket is. 

 

Health Tip of the Week[iii]

Diet Soda: Good or Bad?

Medically reviewed by Katherine Marengo LDN, R.D., Nutrition — By Elise Mandl, BSc, Msc, APD — Updated on April 19, 2023

Diet soda does not add nutritional value to your diet and not all options are low in calories or sugar-free. It may also contribute to certain health conditions.

Diet sodas are popular beverages all over the world, especially among people who want to reduce their sugar or calorie intake.  Instead of sugar, artificial sweeteners, such as aspartame, cyclamates, saccharin, acesulfame-k, or sucralose, are used to sweeten them.  Almost every popular sugar-sweetened beverage on the market has a “light” or a “diet” version — Diet Coke, Coke Zero, Pepsi Max, Sprite Zero, etc.  Diet sodas were first introduced in the 1950s for people with diabetes, though they were later marketed to people trying to control their weight or reduce their sugar intake.  Despite being free of sugar and calories, the health effects of diet drinks and artificial sweeteners are controversial.

Diet soda isn’t nutritious

Diet soda is essentially a mixture of carbonated water, artificial or natural sweetener, colors, flavors, and other food additives.  It usually has very few to no calories and no significant nutrition. For example, one 12-ounce (354-mL) can of Diet Coke contains no calories, sugar, fat, or protein and 40 mg of sodium (1).  However, not all sodas that use artificial sweeteners are low in calories or sugar-free. Some use sugar and sweetener together. For example, one can of Coca-Cola Life, which contains the natural sweetener stevia, contains 90 calories and 24 grams of sugar (2).  While recipes differ from brand to brand, some common ingredients in diet soda include:

  • Carbonated water. While sparkling water can occur in nature, most sodas are made by dissolving carbon dioxide into water under pressure (4).
  • Sweeteners. These include common artificial sweeteners, such as aspartame, saccharin, sucralose, or an herbal sweetener like stevia, which are 200–13,000 times sweeter than regular sugar (45Trusted Source).
  • Acids. Certain acids, such as citric, malic, and phosphoric acid, are used to add tartness to soda drinks. They’re also linked to tooth enamel erosion (4).
  • Colors. The most commonly used colors are carotenoids, anthocyanins, and caramels (4).
  • Flavors. Many different kinds of natural juices or artificial flavors are used in diet soda, including fruits, berries, herbs, and cola (4).
  • Preservatives. These help diet sodas last longer on the supermarket shelf. A commonly used preservative is potassium benzoate (4).
  • Vitamins and minerals. Some diet soft drink manufacturers add vitamins and minerals to market their products as healthier no-calorie alternatives (4).
  • Caffeine. Just like regular soda, many diet sodas contain caffeine. A can of Diet Coke contains 46 mg of caffeine, while Diet Pepsi contains 35 mg (16).

 

SUMMARY

Diet soda is a mixture of carbonated water, artificial or natural sweeteners, colors, flavors, and extra components like vitamins or caffeine. Most varieties contain zero or very few calories and no significant nutrition.

Effects on weight loss are conflicting

Because diet soda is usually calorie-free, it would be natural to assume it could aid weight loss. However, research suggests the association may not be so straightforward.  Several observational studies have found that using artificial sweeteners and drinking high amounts of diet soda is associated with an increased risk of obesity and metabolic syndrome (7Trusted Source8Trusted Source9Trusted Source10Trusted Source).  Scientists have suggested that diet soda may increase appetite by stimulating hunger hormones, altering sweet taste receptors, and triggering dopamine responses in the brain (11Trusted Source1213Trusted Source14).  Given that diet soft drinks have no calories, these responses may cause a higher intake of sweet or calorie-dense foods, resulting in weight gain. However, evidence of this is not consistent in human studies (5Trusted Source11Trusted Source15Trusted Source).  Another theory suggests that diet soda’s correlation to weight gain may be explained by people with bad dietary habits drinking more of it. The weight gain they experience may be caused by their existing dietary habits — not diet soda (16Trusted Source17Trusted Source).  Experimental studies do not support the claim that diet soda causes weight gain. In fact, these studies have found that replacing sugar-sweetened drinks with diet soda can result in weight loss (18Trusted Source19Trusted Source).  One study had overweight participants drink 24 ounces (710 mL) of diet soda or water per day for 1 year. At the end of the study, the diet soda group had experienced an average weight loss of 13.7 pounds (6.21 kg), compared with 5.5 pounds (2.5 kg) in the water group (20Trusted Source).  However, to add to the confusion, there’s evidence of bias in the scientific literature. Studies funded by the artificial sweetener industry have been found to have more favorable outcomes than non-industry studies, which may undermine the validity of their results (21Trusted Source).  Overall, more high-quality research is needed to determine the true effects of diet soda on weight loss.

SUMMARY

Observational studies link diet soda with obesity. However, it’s not clear whether diet soda is a cause of this. Experimental studies show positive effects on weight loss, but these might be influenced by industry funding.

Some studies link diet soda to diabetes and heart disease

Although diet soda has no calories, sugar, or fat, it has been linked to the development of type 2 diabetes and heart disease in several studies.  Research has found that just one serving of an artificially sweetened drink per day is associated with an 8–13% higher risk of type 2 diabetes (22Trusted Source23Trusted Source).  A study in 64,850 women noted artificially sweetened drinks were associated with a 21% higher risk of developing type 2 diabetes. However, this was still half the risk associated with regular sugary drinks. Other studies have observed similar results (24Trusted Source25Trusted Source26Trusted Source27Trusted Source).  Conversely, a recent review found that diet soda is not associated with an increased risk of diabetes. Also, another study concluded that any association could be explained by the existing health status, weight changes, and body mass index of participants (28Trusted Source29Trusted Source).  Diet soda has also been linked to increased risks of high blood pressure and heart disease.  A review of four studies including 227,254 people observed that for each serving of artificially sweetened beverage per day, there is a 9% increased risk of high blood pressure. Other studies have found similar results (30Trusted Source31Trusted Source32Trusted Source).  Additionally, one study has linked diet soda to a small increase in the risk of stroke, but this was only based on observational data (33Trusted Source).  Because most of the studies were observational, it may be that the association could be explained another way. It’s possible that people who were already at risk of diabetes and high blood pressure chose to drink more diet soda (24Trusted Source34Trusted Source35Trusted Source).  More direct experimental research is needed to determine whether there’s any true causal relationship between diet soda and increased blood sugar or blood pressure.

SUMMARY

Observational studies have linked diet soda to type 2 diabetes, high blood pressure, and an increased risk of stroke. However, there’s a lack of research on the possible causes of these results. They may be due to preexisting risk factors like obesity.

Diet soda and kidney health

Drinking diet soda has been linked to an increased risk of chronic kidney disease.  A recent study analyzed the diets of 15,368 people and found that the risk of developing end-stage kidney disease increased with the number of glasses of diet soda consumed per week.  Compared with those who consumed less than one glass per week, people who drank more than seven glasses of diet soda per week had nearly double the risk of developing kidney disease (36Trusted Source).  A suggested cause for the kidney damage is the high phosphorus content of soda, which may increase the acid load on the kidneys (36Trusted Source37Trusted Source).  However, it has also been suggested that people consuming high amounts of diet soda may do so to compensate for other poor dietary and lifestyle factors that may independently contribute to the development of kidney disease (36Trusted Source38Trusted Source).  Interestingly, studies investigating the effects of diet soda on the development of kidney stones have found mixed results.  One observational study noted that diet soda drinkers have a slightly increased risk of kidney stone development, but the risk was much smaller than the risk associated with drinking regular soda. In addition, this study has not been supported by other research (39Trusted Source).  Another study reported that the high citrate and malate content of some diet sodas may help treat kidney stones, particularly in people with low urine pH and uric acid stones. However, more research and human studies are needed (40Trusted Source).

SUMMARY

Observational studies have found an association between drinking a lot of diet soda and the development of kidney disease. If diet soda does cause this, a potential reason could be increased acid load on the kidneys due to its high phosphorus content.

It’s linked to preterm delivery and childhood obesity

Drinking diet soda while pregnant has been linked to some negative outcomes, including preterm delivery and childhood obesity.  A Norwegian study in 60,761 pregnant women found that intake of artificially sweetened and sugar-containing drinks was associated with an 11% higher risk of preterm delivery (41Trusted Source).  Earlier Danish research supports these findings. A study in almost 60,000 women found that women who consumed one serving of diet soda per day were 1.4 times more likely to deliver preterm than those who did not (42Trusted Source).  However, recent research in 8,914 women in England did not find any association between diet cola and preterm delivery. However, the authors admitted that the study may not have been big enough and had been limited to diet cola (43Trusted Source).  It’s important to note that these studies were only observational and offer no explanation of exactly how diet soda may contribute to preterm birth.  Furthermore, consuming artificially sweetened drinks while pregnant is significantly associated with an increased risk of childhood obesity (44Trusted Source).  One study found that the daily consumption of diet drinks during pregnancy doubled the risk of a baby being overweight at 1 year of age (45Trusted Source).  Further research is needed to analyze the potential biological causes and long-term health risks for children exposed to artificially sweetened sodas in the womb.

SUMMARY

Large studies have linked diet soda to preterm delivery. However, a causal link has not been found. Additionally, infants of mothers who drank diet soda while pregnant are at an increased risk of being overweight.

Other effects

There are several other documented health effects of diet sodas, including:

  • May reduce fatty liver. Some studies have shown that replacing regular soda with diet soda can reduce fat around the liver. Other studies have found no effect (46Trusted Source47).
  • No increase in reflux. Despite anecdotal reports, carbonated drinks have not been found to make reflux or heartburn worse. However, the research is mixed, and more experimental studies are needed (3Trusted Source48Trusted Source).
  • No strong links to cancer. Most of the research on artificial sweeteners and diet soda has found no evidence it causes cancer. A slight increase in lymphoma and multiple myeloma in men was reported, but the results were weak (49Trusted Source50Trusted Source).
  • Changes to the gut microbiome. Artificial sweeteners may alter the gut flora, leading to reduced blood sugar control and potentially increasing the risk of type 2 diabetes. One study found all of the six tested artificial sweeteners damaged the gut microbiome in various ways. Another found the way people’s gut flora reacted to artificial sweeteners was highly individualized (51Trusted Source52Trusted Source5354Trusted Source).
  • Increased risk of osteoporosis. Diet and regular cola is associated with bone mineral density loss in women, but not in men. The caffeine and phosphorus in cola might interfere with normal calcium absorption (5Trusted Source).
  • Tooth decay. Like regular soda, diet soda is associated with dental erosion due to its acidic pH level. This comes from the addition of acids, such as malic, citric, or phosphoric acid, for flavor (5Trusted Source55Trusted Source).
  • Linked to depression. Observational studies have found higher rates of depression among those who drank four or more diet or regular sodas per day. However, experiments are needed to determine whether diet soda is a cause (56Trusted Source).

While some of these results are interesting, more experimental research is needed to determine whether diet soda causes these issues, or if the findings are due to chance or other factors.

SUMMARY

Diet soda may improve fatty liver and does not appear to increase heartburn or the risk of cancer. However, it may reduce blood sugar control and increase the risks of depression, osteoporosis, and tooth decay. However, more research is needed.

The bottom line

Research on diet soda has produced a lot of conflicting evidence.  One explanation for this conflicting information is that most of the research is observational. This means it observes trends, but there’s a lack of information about whether diet soda intake is a cause or simply associated with the true cause.  Therefore, while some of the research sounds quite alarming, more high-quality experimental studies are needed before concrete conclusions can be drawn about the health effects of diet soda.  Regardless, one thing is certain: Diet soda does not add any nutritional value to your diet.  So, if you’re looking to replace regular soda in your diet, other options may be better than diet soda. Next time, try an alternative like milk, coffee, black or herbal tea, or fruit-infused water.


[i]https://www.jhinvestments.com/weekly-market-recap#investment-returns, accessed 03.18.2024.

[ii] Hockensmith, Robert F.  52 Ways to Outsmart the IRS, 2nd Edition.  Kindel Edition, location 52-56 of 226.  Accessed 03.18.2024.

[iii]https://www.healthline.com/nutrition/diet-soda-good-or-bad#:~:text=Although%20diet%20soda%20has%20no,diabetes%20(%2022%20%2C%2023%20).  Accessed 03.18.2024.