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Inflation and Ukraine Fears Cool Markets

Fri, 25 Feb 2022 15:45:35 GMT

Weekly Market Newsletter

February 14th, 2022

A hot inflation print and the growing concern of a Russian invasion of Ukraine sent stocks tumbling late in the week, leaving major indices lower for the five-trading days.

The Dow Jones Industrial Average skidded 1.00%, while the Standard & Poor’s 500 retreated 1.82%. The Nasdaq Composite index slumped 2.18%. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.26%. ^1,2,3

Red Friday

Investors woke up on Black Friday to reports of a mutated COVID variant, reviving fears of potential new economic restrictions. U.S. markets were not alone, as stock prices in Europe and Asia also tumbled.

Friday’s market action saw declines in economic reopening stocks, such as travel and leisure, cyclicals, financials, and energy, while some of the so-called stay-at-home stocks and pharmaceutical stocks experienced gains. Yields retreated amid a flight to safety and the potential that this turn of events may lead to a slowdown in the Fed’s bond tapering program and a delay in contemplated rate hikes. Prior to Thanksgiving the markets had been choppy, but largely trending higher for the week, while yields had moved up with the renomination of Fed Chair Powell.

Powell Renominated

President Biden announced last week that he was renominating Jerome Powell to serve another term as chairman of the Federal Reserve Bank, ending market speculation surrounding his renomination.

President Biden cited the need for stability and independence in a time of uncertainty in making his decision. While Powell’s renomination faced resistance, Senate approval appears likely. Coincident with Powell’s renomination, President Biden also nominated Lael Brainard, a member of the Federal Reserve Board of Governors, to serve as vice chair. Investors can soon expect further Fed nominations by the Biden Administration to fill vacancies created by term expirations and retirements.

This Week: Key Economic Data

Tuesday: Consumer Confidence.

Wednesday: ADP (Automated Data Processing) Employment Report. ISM (Institute for Supply Management) Manufacturing Index.

Thursday: Jobless Claims.

Friday: Employment Situation. Factory Orders.

^{Source: Econoday, November 26, 2021}

^{The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Tuesday: Salesforce.com, Inc. (CRM), Hewlett Packard Enterprise Company (HPE).

Wednesday: Okta, Inc. (OKTA), Snowflake, Inc. (SNOW), CrowdStrike (CRWD).

Thursday: Marvell Technology, Inc. (MRVL), Dollar General (DG), The Kroger Co. (KR), DocuSign (DOCU).

^{Source: Zacks, November 26, 2021}

^{Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

Tax Tip:

Protect Your Financial Safety in Case of a Natural Disaster

No matter where you live, you should be aware of possible natural disasters in your area and plan accordingly by considering the following tax tips:

Update your emergency plan.

Create electronic copies of all important documents.

Document your valuables. Documenting these items ahead of time makes it easier to claim insurance and tax benefits if a disaster strikes.

You can call the IRS at 866-562-5227 with any natural disaster-related questions. The agency can provide copies of previous tax returns, order transcripts showing most line items, and more.

Net personal, casualty, and theft losses may be deductible if they’re attributable to a federally declared disaster.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS.gov ⁴

Footnotes and Sources

^{1. The Wall Street Journal, November 26, 2021}

^{2. The Wall Street Journal, November 26, 2021}

^{3. The Wall Street Journal, November 26, 2021}

^{4. IRS.gov, January 22, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

Rate Hike Talks Sink Stocks - January 24th, 2022

Wed, 26 Jan 2022 04:19:33 GMT

Weekly Market Newsletter

January 24th, 2022

Stocks extended their January retreat as worries over inflation and rising bond yields continued to exert downward pressure on prices.

The Dow Jones Industrial Average slid 4.58%, while the Standard & Poor’s 500 sank 5.68%. The Nasdaq Composite index dropped 7.55% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.61%. ^1,2,3

Market Takes a Pause

After moving higher on Congressional approval of a $1 trillion-plus infrastructure spending bill, stocks drifted lower as investors took a breather after a weeks-long run-up in prices. A high October inflation report on Wednesday sent bond yields higher and stock prices lower, especially technology and other high growth companies. Energy also fell. ^4,5

Higher-than-expected inflation elevated investor worries that the Fed may be forced to accelerate its bond tapering schedule and hike interest rates sooner than planned. Stocks found firmer footing following the inflation-related sell-off, closing the week on a strong note, though it wasn’t sufficient to keep stocks from ending the week in the red.

Hot! Hot! Hot!

Rising prices appear to be showing no signs of moderating. The first reading on inflation was Tuesday’s release of the Producer Price Index, which saw wholesale prices rise 0.6% in October and register an 8.6% increase from 12-months ago. ⁴

A day later the Consumer Price Index came in above consensus estimates, with prices climbing 0.9% from September 2021 and increasing 6.2% year-over-year. The 12-month increase was the sharpest such rise since 1990. The 12-month core inflation rate (excludes the more volatile food and energy sectors) was 4.6%, the fastest pace since 1991. ⁵

This Week: Key Economic Data

Tuesday: Retail Sales. Industrial Production.

Wednesday: Housing Starts.

Thursday: Jobless Claims. Index of Leading Economic Indicators.

^{Source: Econoday, November 12, 2021}

This Week: Companies Reporting Earnings

Monday: Lucid Group (LCID).

Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD), NetEase, Inc. (NTES).

Wednesday: Nvidia Corporation (NVDA), Cisco Systems, Inc. (CSCO), Target Corporation (TGT), Lowe’s Companies, Inc. (LOW), The TJX Companies, Inc. (TJX).

Thursday: Palo Alto Networks, Inc. (PANW), Ross Stores, Inc. (ROST), JD.com (JD).

^{Source: Zacks, November 12, 2021}

Tax Tip:

Tax Treatment of Hobbies

Taxpayers who earn money from their hobbies might have to report the income to the IRS. Here are some tips to help:

The IRS taxes income differently, depending on whether the income stems from a true hobby or a for-profit business.
Your hobby may entail expenses required to do it well. For example, you may need to buy yarn to knit scarves. You might be able to deduct expenses associated with hobby/business.
In some instances, you can deduct approvable expenses only up to the amount you brought in for income.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS.gov ⁶

^{Footnotes and Sources}

^{1. The Wall Street Journal, November 12, 2021}

^{2. The Wall Street Journal, November 12, 2021}

^{3. The Wall Street Journal, November 12, 2021}

^{4. CNBC, November 9, 2021}

^{5. The Wall Street Journal, November 10, 2021}

^{6. IRS.gov, May 25, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

Stocks Tap the Breaks - November 15st, 2021

Wed, 01 Dec 2021 05:00:14 GMT

Weekly Market Newsletter

November 15st, 2021

Stocks posted small declines last week as investors digested recent stock market gains and an unexpectedly high inflation read.

The Dow Jones Industrial Average slid 0.63%, while the Standard & Poor’s 500 retreated 0.31%. The Nasdaq Composite index slipped 0.69% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.78%. ^1,2,3

Market Takes a Pause

Hot! Hot! Hot!

This Week: Key Economic Data

Tuesday: Retail Sales. Industrial Production.

Wednesday: Housing Starts.

Thursday: Jobless Claims. Index of Leading Economic Indicators.

^{Source: Econoday, November 12, 2021}

This Week: Companies Reporting Earnings

Monday: Lucid Group (LCID).

Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD), NetEase, Inc. (NTES).

Wednesday: Nvidia Corporation (NVDA), Cisco Systems, Inc. (CSCO), Target Corporation (TGT), Lowe’s Companies, Inc. (LOW), The TJX Companies, Inc. (TJX).

Thursday: Palo Alto Networks, Inc. (PANW), Ross Stores, Inc. (ROST), JD.com (JD).

^{Source: Zacks, November 12, 2021}

Tax Tip:

Tax Treatment of Hobbies

Taxpayers who earn money from their hobbies might have to report the income to the IRS. Here are some tips to help:

The IRS taxes income differently, depending on whether the income stems from a true hobby or a for-profit business.
Your hobby may entail expenses required to do it well. For example, you may need to buy yarn to knit scarves. You might be able to deduct expenses associated with hobby/business.
In some instances, you can deduct approvable expenses only up to the amount you brought in for income.

^{Footnotes and Sources}

^{1. The Wall Street Journal, November 12, 2021}

^{2. The Wall Street Journal, November 12, 2021}

^{3. The Wall Street Journal, November 12, 2021}

^{4. CNBC, November 9, 2021}

^{5. The Wall Street Journal, November 10, 2021}

^{6. IRS.gov, May 25, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

COVID-19 Variant Clobbers Markets - November 29th, 2021

Wed, 01 Dec 2021 05:00:09 GMT

Weekly Market Newsletter

November 29th, 2021

News of a new, highly virulent COVID variant triggered a market sell-off on Friday, sending stocks into negative territory for the week.

The Dow Jones Industrial Average slid 1.97%, while the Standard & Poor’s 500 slumped 2.20%. The Nasdaq Composite index lost 3.52% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 1.68%. ^1,2,3

Red Friday

Powell Renominated

President Biden announced last week that he was renominating Jerome Powell to serve another term as chairman of the Federal Reserve Bank, ending market speculation surrounding his renomination.

This Week: Key Economic Data

Tuesday: Consumer Confidence.

Wednesday: ADP (Automated Data Processing) Employment Report. ISM (Institute for Supply Management) Manufacturing Index.

Thursday: Jobless Claims.

Friday: Employment Situation. Factory Orders.

^{Source: Econoday, November 26, 2021}

This Week: Companies Reporting Earnings

Tuesday: Salesforce.com, Inc. (CRM), Hewlett Packard Enterprise Company (HPE).

Wednesday: Okta, Inc. (OKTA), Snowflake, Inc. (SNOW), CrowdStrike (CRWD).

Thursday: Marvell Technology, Inc. (MRVL), Dollar General (DG), The Kroger Co. (KR), DocuSign (DOCU).

^{Source: Zacks, November 26, 2021}

Tax Tip:

Protect Your Financial Safety in Case of a Natural Disaster

No matter where you live, you should be aware of possible natural disasters in your area and plan accordingly by considering the following tax tips:

Update your emergency plan.

Create electronic copies of all important documents.

Document your valuables. Documenting these items ahead of time makes it easier to claim insurance and tax benefits if a disaster strikes.

You can call the IRS at 866-562-5227 with any natural disaster-related questions. The agency can provide copies of previous tax returns, order transcripts showing most line items, and more.

Net personal, casualty, and theft losses may be deductible if they’re attributable to a federally declared disaster.

Footnotes and Sources

^{1. The Wall Street Journal, November 26, 2021}

^{2. The Wall Street Journal, November 26, 2021}

^{3. The Wall Street Journal, November 26, 2021}

^{4. IRS.gov, January 22, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

Fed Says Tapering Ahead - November 8th, 2021

Wed, 01 Dec 2021 04:47:23 GMT

Weekly Market Newsletter

November 8th, 2021

A Federal Reserve announcement on tapering, a fresh batch of corporate profits, and encouraging economic data lifted stocks to another weekly gain.

The Dow Jones Industrial Average rose 1.42%, while the Standard & Poor’s 500 advanced 2.00%. The Nasdaq Composite index led, tacking on 3.05%. The MSCI EAFE index, which tracks developed overseas stock markets, added 1.58%. ^1,2,3

Stocks Power Higher

Stocks marched higher throughout the week, lifted by a succession of positive corporate earnings surprises, optimistic forward guidance by some companies, and healthy economic data. Continued strong third-quarter profits reinforced the narrative that businesses were able to meet strong consumer demand and maintain robust profit margins, despite the headwinds of inflation and supply-chain knots.

Investors were unfazed by the Fed’s mid-week announcement that it would begin its bond purchase tapering plans, in part, because it had long been telegraphed and Fed Chair Powell’s optimistic analysis of the current state of the economy. Also cheered was the announcement of a new COVID-19 antiviral pill and a powerful rebound in job creation, driving stocks to new heights to close out the week.

The Fed Speaks

In an eagerly awaited November meeting of the FOMC (Federal Open Market Committee), the Fed pulled the trigger on its plan to taper monthly bond purchases. Fed tapering will begin this month with reductions of $15 billion per month ($10 billion in Treasurys and $5 billion in mortgage-backed securities) that will end this pandemic-era policy response by July 2022. ⁴

The Fed reiterated its belief that inflation remained transitory, though conceding it had underestimated its acceleration and persistence; it did not expect interest rates to be raised until after the completion of the tapering program. Powell expects inflation to stay elevated until mid-2022 when he anticipates supply-chain bottlenecks to clear. ^5,6

This Week: Key Economic Data

Wednesday: Consumer Price Index (CPI). Jobless Claims.

Friday: Consumer Sentiment. Job Openings and Labor Turnover Survey (JOLTS).

^{Source: Econoday, November 5, 2021}

This Week: Companies Reporting Earnings

Monday: PayPal Holdings, Inc. (PYPL).

Tuesday: D.R. Horton, Inc. (DHI), Sysco Corporation (SYY), Palantir Technologies, Inc. (PLTR), DoorDash, Inc. (DASH), Coinbase Global, Inc. (COIN), Roblox Corporation (RBLX).

Wednesday: The Walt Disney Company (DIS), Affirm Holdings, Inc. (AFRM).

Friday: AstraZeneca PLC (AZN).

^{Source: Zacks, November 5, 2021}

Tax Tip:

Check Your Withholding Status Online

The Withholding Calculator can help you determine whether you should submit a new W-4 to your employer, and you also can use the results to adjust your income tax withholding. If you have a more complex tax situation, you may need to use Publication 505, Tax Withholding and Estimated Tax form. This form can help you determine your self-employment tax, alternative minimum tax, or tax on unearned income by dependents. Publication 505 also can help if you receive non-wage income, including capital gains, royalties, dividends, and more.

It’s important to check your withholding to ensure that you’re deducting the right amount of taxes, and these handy tools can help.

Footnotes and Sources

^{1. The Wall Street Journal, November 5, 2021}

^{2. The Wall Street Journal, November 5, 2021}

^{3. The Wall Street Journal, November 5, 2021}

^{4. CNBC, November 3, 2021}

^{5. CNBC, November 3, 2021}

^{6. CNBC, November 3, 2021}

^{7. IRS.gov, January 22, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

Earnings Build; GDP Slows - November 1st, 2021

Wed, 01 Dec 2021 04:47:21 GMT

Weekly Market Newsletter

November 1st, 2021

A fresh wave of positive corporate earnings surprises sent markets to new record highs last week.

The Dow Jones Industrial Average increased 0.40%, while the Standard & Poor’s 500 rose 1.33%. The Nasdaq Composite index picked up 2.71% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was up 0.68%. ^1,2,3

Investor Optimism Returns

After beginning the week on a lackluster note, stocks turned higher on Wednesday as companies kicked off a new earnings season and details about the Fed’s taper plans emerged. Investor enthusiasm shifted into high gear the following day on positive economic data and earnings reports that exceeded investor expectations. Buying continued through Friday on fresh earnings surprises and a better-than-expected retail sales report.

The economic data allayed some concerns about inflationary pressures and economic deceleration, while early earnings results provided hope that companies had weathered the surge in summer Covid infections.

Nevertheless, worries about how supply-chain disruption and higher prices may impact corporate earnings guidance haven’t gone away.

Let the Tapering Begin

Minutes from September’s Federal Open Market Committee released last week provided detail around the Fed’s plans to taper its $120 billion monthly bond purchase program. The Fed expects to reduce its purchases by $15 billion each month, beginning in mid-November/December and ending in June 2022. ⁴

This tapering schedule is somewhat faster than what investors were anticipating, reflecting the Fed’s concern that inflation has been somewhat higher and more persistent than it had anticipated, with continuing supply-chain bottlenecks raising that risk level. Fed Chair Powell’s commitment to transparency and advanced signaling of policy changes appeared to have worked, as markets greeted the news calmly. In fact, stocks rallied strongly the following day as yields moved lower.

This Week: Key Economic Data

Monday: Industrial Production.

Tuesday: Housing Starts.

Thursday: Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.

Friday: PMI (Purchasing Managers’ Index) Composite Flash.

^{Source: Econoday, October 15, 2021}

This Week: Companies Reporting Earnings

Tuesday: Netflix, Inc. (NFLX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Kansas City Southern (KSU).

Wednesday: Tesla, Inc. (TSLA), International Business Machines (IBM), Verizon Communications (VZ), Abbott Laboratories (ABT), United Airlines (UAL), CSX Corporation (CSX).

Thursday: AT&T, Inc. (T), Intel Corporation (INTC), Snap, Inc. (SNAP), PPG Industries, Inc. (PPG), Southwest Airlines (LUV), American Airlines Group, Inc. (AAL), Union Pacific Corporation (UNP), Chipotle Mexican Grill, Inc. (CMG), Danaher Corporation (DHR), Dow, Inc. (DOW).

Friday: American Express Company (AXP), HCA Healthcare, Inc. (HCA), Schlumberger Limited (SLB).

^{Source: Zacks, October 15, 2021}

Tax Tip:

How to Research Tax-Exempt Organizations

The IRS makes it easy to check various organizations’ status to ensure that they are eligible to receive tax-deductible contributions. It provides a tool, Tax Exempt Organization Search, which allows users to research an organization quickly and easily, using information such as the organization’s name, Employee Identification Number, and location.

In addition to finding out whether an organization is eligible to receive tax-deductible donations, users also automatically can see whether any organizations’ tax-exempt status has been revoked (which happens if they don’t file their required Form 990-series for three years in a row), as well as access IRS determination letters that recognize the organization as tax-exempt, among other information.

Footnotes and Sources

^{1. The Wall Street Journal, October 15, 2021}

^{2. The Wall Street Journal, October 15, 2021}

^{3. The Wall Street Journal, October 15, 2021}

^{4. The Wall Street Journal, October 13, 2021}

^{5. IRS.gov, February 26, 2021}

We would love to answer any questions you may have. Please contact us at:

248-641-9200

joe@benefingroup.com

kim@benefingroup.com

Sequence of Returns Risk

Mon, 01 Mar 2021 03:31:17 GMT

Learn more about Sequence of Returns Risk

Income Allocation vs. Asset Allocation

Thu, 07 Jan 2021 17:56:34 GMT

Income Allocation vs. Asset Allocation

There is a difference..........A BIG difference