Broker Check
Weekly Market Update, Week Ending May 17, 2024

Weekly Market Update, Week Ending May 17, 2024

May 20, 2024
Market-Moving News[i]

Record highs

The NASDAQ set a record high on Tuesday and the S&P 500 and Dow followed suit the next day, lifted by fresh data on inflation and a brighter outlook for eventual interest-rate cuts. On Friday, the Dow closed above the 40,000-point mark for the first time —finishing at 40,003.6—to cap its fifth positive week in a row.

Inflation relief

U.S. stock indexes rose around 1% on Wednesday and bond yields fell after an inflation report showed that consumer prices increased less than most economists had expected. In April, the Consumer Price Index rose 0.3% over the previous month and 3.4% over the same month a year earlier, interrupting a recent trend of hotter-than-expected inflation data.

Shifting rate outlook

The latest inflation data lifted investors’ expectations for interest-rate cuts later this year, and government bond yields fell sharply, with most of the week’s decline coming in response to Wednesday’s better-than-expected inflation report. The yield of the 10-year U.S. Treasury bond closed at 4.42% on Friday, down sharply from 4.69% at the end of April.   

Gold’s glitter

The price of gold futures on Friday climbed above the record-high $2,400-per-ounce level last reached in mid-April. Year to date, gold has risen nearly 17%, with most of the gain coming since mid-March. 

China’s property stimulus

Amid slumping housing prices, China on Friday announced measures designed to lift the struggling commercial and residential property markets in the world’s second-largest economy. Among other things, China’s central bank reduced the minimum down payment for mortgages and removed the floor on interest rates for first and second homes.

Volatility eases

An index that measures investors’ expectations of short-term U.S. stock market volatility fell into negative territory year to date and slipped to the lowest level in five months. The Cboe Volatility Index has fallen about 38% from a recent high on April 15. 

Growth tops value

A U.S. large-cap growth stock index outperformed its value stock counterpart by a wide margin for the week, extending the year-to-date performance edge for the growth style. The growth benchmark finished the week up more than 13% year to date versus nearly 9% gain for the value index.

Retail flattens

U.S. retail sales were unexpectedly flat in April, marking a slowdown from the previous month, when sales climbed 0.6%. Most economists had been expecting an April sales gain of around 0.4%, rather than the unchanged result, which came amid elevated interest rates and persistent inflation.  

The Week Ahead:  May 20-24

  • Monday
    • No major reports scheduled
  • Tuesday
    • No major reports scheduled
  • Wednesday
    • Release of minutes from the April 30-May 1 meeting of the U.S. Federal Reserve
    • Existing home sale,
  • Thursday
    • Weekly unemployment claims, U.S. Department of Labor
    • New home sales, U.S. Census Bureau
  • Friday
    • University of Michigan Index of Consumer Sentiment
    • Durable goods orders, U.S. Census Bureau
    Philosophy Quote of the Week[ii]  

    Quality Over Quantity

    “What’s the point of having countless books and libraries, whose titles could hardly be read through in a lifetime.  The learner is not taught, but burdened by the sheer volume, and it’s better to plant the seeds of a few authors than to be scattered about by many.”

    Seneca, On Tranquility of Mind, 9.4

    Tax Tips[iii]

    Ten Things to Know About IRS Notices and Letters

    The IRS will not reach out to you through social media or a phone call!

    Here are 10 things to know in case a letter or notice form the IRS shows up in your mailbox:

    1. Don’t panic. You often only need to respond to take care of a notice.  An IRS notice could be bad or good news.  The IRS will contact you by mail to inform you that you have money coming back or a refund due to you, as often as they might say you owe more tax.
    2. There are many reasons why the IRS may send a letter or notice. It typically is about a specific issue on your federal tax return or tax account.  A notice may tell you about changes to your account or ask you for more information.  It could also tell you that you must make a payment.
    3. Each notice has specific instructions about what you need to do.
    4. You may get a notice that states the IRS has made a change or correction to your tax return. If you do, review the information and compare it with your original return.
    5. If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment. If you are due additional money, the notice will say so, and then you only must wait for the check in the mail.  The wait time differs depending on the reason for the change.  If the IRS takes more than 90 days to pay you, you are also entitled to interest being paid back to you on the refund amount.
    6. If you do not agree with the notice, it’s important for you to respond. You should write a letter to explain why you disagree.  Include any information and documents you want the IRS to consider.  Mail your reply with the bottom tear-off portion of the notice.  Send it to the address shown in the upper left-hand corner of the notice.  Allow at least 30 days for a response.  If you wish to have a tax professional speak or represent you, this is where you would tell the IRS who will speak for you.  There is a place to list your representative’s name, address and phone number, if the IRS needs to contact them.
    7. You shouldn’t have to call or visit an IRS office for most notices. If you have questions, call the number in the upper right corner of the notice.  Have a copy of your tax return and the notice with you when you call.  This will help the IRS answer your questions.  If you are not comfortable speaking with the IRS, engage or hire a tax professional to speak on your behalf.  There is no need for you to stress out when dealing with the IRS – let professionals (CPAs, EAs, Attorneys) handle it!
    8. Keep copies of any notices you receive with your other tax records.
    9. The IRS sends letters and notices by mail. They do not contact people by email or social media to ask for personal or financial information.  Always be sure to send all correspondence by certified mail, return receipt required.
    10. For more information, visit https://www.IRS>gov/ or see Publication 594, The IRS Collection Process. Get professional help!  Remember the old saying, “the attorney who represents themselves has a fool for a client.”

     

    Health Tip of the Week[iv]

    Keys to Brain Health as You Age

    Discover valuable insights from the second edition of 'Mayo Clinic on Healthy Aging,' delving into the keys to aging gracefully for everyone

    January 12, 2024

    By Mayo Clinic Press Editors

    It’s never too early to engage in habits that can help offset age-related cognitive changes and enhance your mental well-being. Taking steps now to protect your brain can help it stay healthy as you age. Researchers have found that about a third of the time, dementia is caused by risk factors that you can control. This means, in theory, if you can manage specific aspects of your health, you may be able to reduce your risk of developing brain-related conditions.

    Keeping your brain healthy is a lifelong process. Challenging and engaging your brain throughout your lifetime may increase your cognitive reserve and the brain protection it offers. Addressing general health issues, such as physical inactivity, high blood pressure, tobacco use, stress and anxiety, has also been shown to be helpful for brain functioning and mental health.

    While paying attention to these issues is important at any age, it’s especially important in midlife. Caring for your overall health can help protect your blood vessels, for example, which may prevent cognitive decline later in life.

    Good cardiovascular health is good for not only your heart but also your brain. Following are more details about what researchers have found to be most helpful in promoting brain health and mental well-being across the life span. Overall, these measures provide a road map for better brain aging.

    Keep physically active

    In one study, researchers divided participants into two groups. One group took part in aerobic exercise; the other group performed stretching and balance exercises. After one year, researchers noticed that the individuals involved with aerobic exercise had a larger hippocampus — the part of the brain that makes new memories.

    In another study, researchers found that people with a gene that causes Alzheimer’s disease who exercised for 150 minutes or more each week delayed onset of the disease by several years. People with the gene who exercised less than 150 minutes a week developed Alzheimer’s disease more quickly. While it’s not certain that exercise can reduce the risk of Alzheimer’s disease, this research suggests that it may.

    Physical activity helps provide protection against other diseases that can increase your risk of dementia, including high blood pressure, diabetes and high cholesterol. It may also give your immune system a boost and help combat chronic inflammation. Finally, physical activity helps offset symptoms of stress, anxiety and depression.

    Make sleep a priority

    It’s not news that getting enough good-quality sleep is essential for overall health and well-being. Most people are aware that sleep is important. But in terms of dementia risk, good sleep seems to be especially critical. Research suggests that not getting enough good sleep over a number of years may increase the risk of dementia. In one analysis, researchers found that people whose sleep is interrupted over many years are more at risk of developing dementia. Researchers also have found that individuals who don’t get enough sleep may be twice as likely to develop Alzheimer’s disease.

    Why is sleep so important? Earlier, we learned that clumps of the protein beta-amyloid harden into plaques. These plaques cause nerve cells in the brain to die. This process is thought to lead to Alzheimer’s disease. During sleep, beta-amyloid and other toxins are cleared from the brain. If you don’t get good sleep, especially over a long period of time, this process may not work as well. Lack of sleep can increase risk of dementia in other ways, too. (Poor sleep can also increase your risk of other diseases such as high blood pressure and diabetes.)

    Stay socially engaged

    People who have many social contacts and regularly engage with other people may be half as likely to experience memory problems. How many people are part of your social network, how diverse your connections are and how often you’re in touch with the people in your social circle all play a role in how well your brain functions. That makes staying connected with others, especially later in life, an important factor in preserving brain health and preventing brain changes that can lead to dementia.

    Social connections are thought to benefit the brain in many ways. Research suggests that engaging with others triggers the release of chemicals such as serotonin and dopamine, which improve mood and outlook and protect the brain from dementia, especially dementia caused by Alzheimer’s disease. Social connections are thought to boost a person’s cognitive reserve, which helps buoy the brain against age-related changes.

    Social isolation, meanwhile, increases the risk that you will have trouble with thinking skills and memory. It also makes Alzheimer’s disease more likely. And it may increase the odds of developing conditions linked to Alzheimer’s disease, such as high blood pressure and heart disease, as well as increase your risk of depression and other mental health disorders.

    Keep stress in check

    Several studies show that chronic stress — the feeling of constantly being overwhelmed by one or more of life’s challenges — can result in shrinkage (atrophy) of an area of the brain known as the hippocampus, important to the creation and storage of memories. High levels of stress and prolonged states of stress can increase chronic inflammation and affect cell aging. Stress is thought to affect the length of telomeres, genetic structures at the end of cell chromosomes.

    Stress can affect brain health in other ways. When you’re faced with a stressful situation, a surge of hormones temporarily increases your blood pressure and causes your blood vessels to narrow. While there’s no proof that stress can cause long-term high blood pressure on its own, it’s linked to factors that can increase your risk of having high blood pressure. In times of stress, some people turn to unhealthy habits such as smoking, drinking too much alcohol and eating unhealthy foods, all of which can lead to high blood pressure.

    There are several strategies that can help keep stress in check. They include exercise; mind-body therapies such as deep breathing, meditation and yoga; and simplifying your daily schedule. These practices may also improve overall emotional well-being. Mind-body therapies are based on the idea that the mind and body are intricately connected and that the mind has the capacity to affect the body. 

    Eat brain-friendly foods

    Following a mostly plant-based diet, such as the Mediterranean diet or the Mayo Clinic diet, may help prevent dementia. These diets, rich in fruits, vegetables, olive oil, legumes, whole grains and fish, are thought to be good for overall brain health and may also play a role in reducing dementia risk. Studies have shown that people who follow a Mediterranean diet seem less likely to have Alzheimer’s disease than those who don’t follow such a diet.

    Studies also suggest that following a Mediterranean diet may slow mental decline in older adults, keep mild cognitive impairment from progressing to Alzheimer’s disease and reduce the risk of mild cognitive impairment. The foods emphasized in plant-based diets may lower cholesterol and blood sugar, which helps protect blood vessels and, in turn, reduces the risk of stroke and dementia. They may also help prevent the loss of brain tissue associated with Alzheimer’s disease.

    Reduce your risk of stroke

    The health of your blood vessels is critical to brain health. If your blood vessels weaken or become damaged, they can’t get nutrients and oxygen to nerve cells in the brain that need them to funct


    [i]https://www.jhinvestments.com/weekly-market-recap#investment-returns, accessed 05.19.2024.

    [ii] Holiday, Ryan.  The Daily Stoic:  366 Meditations on Wisdom, Perseverance, and the Art of Living.  Kindle edition, pages 154.  Accessed 05.19.2024.

    [iii] Hockensmith, Robert F.  52 Ways to Outsmart the IRS, Weekly Tax Tips to Save You Money.  Kindle edition, pages 89-91, accessed 05.19.2024.

    [iv]https://mcpress.mayoclinic.org/healthy-brain/keys-to-brain-health-as-you-age/, accessed 05.19.2024.