Domestic stocks leapt ahead last week as the latest jobs report inspired renewed confidence in our economic standing. The S&P 500 added 3.54%, and the Dow gained 3.25%.[1] The NASDAQ erased its losses from February’s market correction to hit a new record close while growing 4.17% for the week.[2] International stocks in the MSCI EAFE increased by 1.79%.[3]
In addition to solid stock growth, Friday, March 9, also brought a significant milestone in the markets: the 9th anniversary of our current bull market. The Dow is now in the midst of its longest-ever bull run, and the S&P 500’s bull market is its 2nd-longest and -largest ever.[4]
To put the recovery in perspective, 9 years ago, the S&P 500 closed at only 676.53. By market’s close last Friday, the index was at 2,786.57—more than 4 times its value at the bull market’s start.[5]
What drove last week’s market performance?
While talk of tariffs on aluminum and steel imports affected stocks last week, a major jobs report was arguably the biggest market mover.[6] The Bureau of Labor Statistics released its latest jobs report on Friday, and the numbers relieved many investors’ inflation concerns. The data showed that the economy added 313,000 jobs in February—far more than what analysts expected.
At the same time, wages only grew by 2.6% from this time last year, below the prediction.[7]
What does this data mean?
Bloomberg called the labor report a “‘Goldilocks’ scenario,” because it indicates that the economy is neither too hot nor too cold. The data reveals that many people are returning to the workforce, but wages are not increasing fast enough to trigger significant inflation.[8]
This jobs report also contrasts with last month’s data, which showed wages rising faster than expected. That report contributed to February’s market correction.[9]
Ultimately, some analysts believe the latest data implies that inflation is less of a concern, and the Fed may only increase interest rates 3 times this year.[10]
Later this month, Federal Reserve leaders will meet to determine whether to raise interest rates and will also provide their latest economic projections.[11] Looking ahead, we will continue to analyze the interplay between labor, inflation, and interest rates—and how these forces may affect your financial life.
ECONOMIC CALENDAR
Tuesday: Consumer Price Index
Wednesday: Retail Sales
Thursday: Jobless Claims, Housing Market Index
Friday: Housing Starts, Industrial Production, Consumer Sentiment
| DATA AS OF 3/9/2018 | 1 WEEK | SINCE 1/1/18 | 1 YEAR | 5 YEAR | 10 YEAR |
| STANDARD & POOR’S 500 | 3.54% | 4.22% | 17.83% | 12.43% | 7.98% |
| DOW | 3.25% | 2.49% | 21.47% | 11.97% | 7.86% |
| NASDAQ | 4.17% | 9.52% | 29.49% | 18.44% | 13.08% |
| INTERNATIONAL | 1.79% | -0.48% | 16.77% | 3.93% | 0.19% |
| DATA AS OF 3/9/2018 | 1 MONTH | 6 MONTHS | 1 YEAR | 5 YEAR | 10 YEAR |
| TREASURY YIELDS (CMT) | 1.57% | 1.89% | 2.03% | 2.65% | 2.90% |
Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
How Do You Get Your Taxes Done for Free?
Can’t pass up a good deal? How about a free one? Millions of people get their taxes done for free every year.
Two IRS-sponsored programs provide free tax preparations for lower- and moderate-income filers:
- The Volunteer Income Tax Assistance (VITA) program offers free tax-return preparation to eligible taxpayers with incomes $54,000 or less.
- The Tax Counseling for the Elderly (TCE) program primarily helps people 60 and older, but does provide services for all taxpayers. It deals with tax issues unique to seniors.
The IRS trains and certifies thousands of community volunteers to aid taxpayers, especially those with disabilities or who speak limited English.
Here is more information about the IRS’s 2 volunteer programs:
- Free Tax Prep Around the Country provides free tax help through community organizations at thousands of sites.
- Free Electronic Filing through VITA and TCE provides the safest and most accurate way to file tax returns.
- Volunteer Preparers Trained to Help Find Tax Benefits. The IRS-certified VITA and TCE volunteers help filers obtain eligible tax benefits, which may include the Earned Income Tax Credit, the American Opportunity Tax Credit, the Child Tax Credit, or the Credit for the Elderly.
- Self-Preparation Option. Some VITA sites may allow taxpayers making $64,000 or less to file their own returns through free web-based software.
- Site Information Available on IRS.gov. The VITA Locator Tool on the IRS website provides taxpayers with the nearest VITA site. They can also call 800-906-9887 for information.
* 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 advisor.
Tip adapted from IRS.gov[12]
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
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Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,
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[1] https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US
[2] https://www.bloomberg.com/news/articles/2018-03-09/nasdaq-takes-just-one-month-to-recoup-worst-losses-in-two-years
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
[3] https://www.msci.com/end-of-day-data-search
[4] https://www.cnbc.com/2018/03/08/the-bull-market-just-turned-9-years-old-heres-how-the-stock-surge-compares-with-past-runs.html
[5] https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
http://abcnews.go.com/Business/wireStory/us-bull-market-hits-ninth-birthday-2nd-longest-53632885
[6] https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
[7] https://www.cnbc.com/2018/03/09/nonfarm-payrolls-february.html
[8] https://www.bloomberg.com/news/articles/2018-03-09/it-s-market-deja-vu-jobs-beat-wages-miss-and-stocks-rally
[9] https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
[10] https://www.cnbc.com/2018/03/09/us-stock-futures-dow-data-nonfarm-payrolls-and-politics-on-the-agenda.html
[11] http://wsj-us.econoday.com/byshoweventfull.asp?fid=481816&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp – top
[12] https://www.irs.gov/newsroom/how-taxpayers-across-the-country-can-have-their-taxes-prepared-for-free
