The Week on Wall Street
Stock benchmarks declined for a second straight week as coronavirus news tempered risk appetite.
The S&P 500 fell 2.14% on the week. The Nasdaq Composite dipped 1.76%, and the Dow Jones Industrial Average, 2.55%. Away from North America, developed markets slumped 2.24%, according to MSCI’s EAFE index.[1],[2]
The Fed Makes a Minor Move
The Federal Reserve left short-term interest rates alone at its January meeting, but it did make what Fed chairman Jerome Powell called a “small technical adjustment” in view of its continuing purchases of Treasuries. Wednesday, it slightly increased the interest rate paid to banks that park excess capital reserves at the Fed.
The move may give the Fed a bit more control over short-term rates this quarter and assist the operations of U.S. financial markets.[3]
Encouraging New Consumer Data
Rising to 131.6 in January, the Conference Board’s Consumer Confidence Index reached its highest level since August. Consumer spending increased 0.3% in December, according to a new Department of Commerce report.[4],[5]
Economy Expanded at a 2.1% Pace in Fourth Quarter
The Bureau of Economic Analysis released this estimate Thursday. That number matches the gross domestic product of the third quarter and affirms that the U.S. avoided a fall slowdown.[6]
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: The latest snapshot of factory sector health from the Institute for Supply Management, presenting January data.
Wednesday: ISM’s January report on the state of non-manufacturing businesses and the latest private-sector payrolls report from Automatic Data Processing (ADP).
Friday: The Department of Labor releases its January employment report.
Source: MarketWatch, January 31, 2020
The MarketWatch 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.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Alphabet (GOOG), Sysco (SYY)
Tuesday: BP (BP), Fiserv (FISV), Gilead Sciences (GIL), Walt Disney (DIS)
Wednesday: GlaxoSmithKline (GSK), Merck (MRK), Qualcomm (QCOM), Toyota (TM)
Thursday: Bristol-Myers Squibb (BMY), Cigna (CI), Philip Morris (PM), Sanofi (SNY)
Friday: AbbVie (ABBV), Honda (HMC), Novo Nordisk (NVO)
Source: Zacks, January 31, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. 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.
Do You Know the Difference Between Taxable and Nontaxable Income?
All income you receive is taxable unless the rules explicitly state that it isn’t. According to the IRS, taxable income includes earned income, like wages, as well as any income earned by bartering or the exchange of property or services. Rental income is taxable, as are other forms of unearned income, like interest and dividends or Social Security.
Some income is not taxable unless certain conditions are met. For example, life insurance proceeds are usually not taxable to the beneficiary unless you redeem a life insurance policy for cash. Any amount you receive above the cost of the policy is taxable. State and local income tax refunds may be taxable and should be reported on your federal taxes.
There are also some forms 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.
* 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[7]
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.
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Past performance does not guarantee future results.
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Consult your financial professional before making any investment decision.
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[1] https://www.wsj.com/market-data
[2] https://quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices
[3] https://www.marketwatch.com/story/fed-holds-benchmark-interest-rate-steady-sees-economy-growing-at-moderate-pace-2020-01-29
[4] https://www.investing.com/economic-calendar/cb-consumer-confidence-48
[5] https://www.investing.com/economic-calendar/personal-spending-235
[6] https://www.marketwatch.com/story/economy-grows-21-in-the-4th-quarter-as-gdp-gets-big-boost-from-falling-trade-deficit-2020-01-30
[7] https://www.irs.gov/businesses/small-businesses-self-employed/what-is-taxable-and-nontaxable-income
