The first trading week of 2017 is over, and during this time, all three major domestic indexes hit record highs. The DOW reached 19,999.63 in intra-day trading on Friday, January 6 —just 0.37 away from achieving 20,000 for the first time.[i] On the same day, the S&P 500 and NASDAQ both closed at record highs. For the week, the S&P 500 was up 1.70%, the Dow gained 1.02%, and the NASDAQ added 2.56%.[ii] International stocks in the MSCI EAFE increased by 1.77%.[iii]
To say that 2017 has started differently than 2016 would be an understatement. This time last year, we ended the week with all three indexes dropping at least 5.96% on fears about China’s economy.[iv]
What else happened last week?
In addition to record highs in the markets, we received a number of economic reports, which provided a mix of positive and less-than-ideal data.
Jobs Grew But Missed Projection: The Bureau of Labor Statistics reported that U.S. employers added an estimated 156,000 non-farm jobs in December. This number missed economists’ projections of 178,000 new jobs but also marked the 75th straight month of job growth.[v]
Unemployment Increased: The percentage of individuals actively seeking jobs in the U.S. increased by 0.1% in December, meeting expectations that it would reach 4.7%.[vi]
Wages Grew: One bright spot in this week’s labor report was a 0.4% increase in average hourly earnings. After sluggish growth through much of the economic recovery, wages increased by 2.9% in 2016.[vii]
Trade Deficit Increased: In November, U.S. exports declined as our imports grew, pushing the trade deficit to a nine-month high. The inflation-adjusted trade deficit is now $3.2 billion bigger than a year ago, an increase that could deflate Gross Domestic Product for the fourth quarter of 2016.[viii]
Manufacturing Hit Two-Year High: For the fourth consecutive month, the ISM manufacturing index showed growth in the manufacturing industry. December’s reading of 54.7 beat expectations.[ix]
Services Sector Beat Expectations: The ISM non-manufacturing index, which surveys economic data from executives in 60 service sectors, grew for the 83rd straight month. December’s measure of 57.2 matched November’s reading and beat economists’ predictions of a drop to 56.6.[x]
Overall, beginning a new year with record highs in the markets feels much better than the rocky start we experienced in 2016. Many of the fundamentals seem to point to an economy that is picking up speed—but only time will tell how our new presidential administration’s policies will affect us in the future.
We hope to see continued growth and stability, and no matter what lies ahead, we will be here to guide you toward the goals and priorities that matter most to you.
ECONOMIC CALENDAR:
Monday: Labor Market Conditions Index, Consumer Credit
Tuesday: JOLTS
Thursday: Import and Export Prices
Friday: PPI-FD, Retail Sales, Consumer Sentiment
| Data as of 1/6/2017 | 1-Week | Since 1/1/17 | 1-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 | 1.70% | 1.70% | 14.41% | 15.64% | 6.15% |
| DOW | 1.02% | 1.02% | 18.08% | 12.30% | 6.10% |
| NASDAQ | 2.56% | 2.56% | 14.17% | 21.29% | 12.68% |
| U.S. Corporate Bond Index | 0.33% | 0.33% | 5.26% | 4.33% | 6.73% |
| International | 1.77% | 1.77% | 3.87% | 3.62% | -1.79% |
| Data as of 1/6/2017 | 1 mo. | 6 mo. | 1 yr. | 5 yr. | 10 yr. |
| Treasury Yields (CMT) | 0.50% | 0.61% | 0.85% | 1.92% | 2.42% |
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the SPUSCIG. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
Tips for Deducting Expenses from Charity Travel
Volunteering for your favorite charity is a common way many Americans give back to their communities. If you plan to donate your time by volunteering and must travel as a result of your involvement, then you may be able to deduct some charity-related travel expenses. Here are some tips to consider:
Requirements
- Volunteer at a Qualified Charity
In order to deduct your travel expenses, you must first make sure that the organization is a qualified charity. Generally, all churches and government entities are qualified. Ask the organization of their charity status before you donate any time or check an organization’s status by using the Select Check tool provided by the IRS.
- Provide Genuine and Substantial Duty
To qualify for deductions, you must provide real, substantial work throughout the trip. If your responsibilities are considered nominal, or you don’t have any duties for a significant time of your travel, then you can’t deduct your expenses.
Deductions – Allowable
Out-of-Pocket Expenses
In order to deduct these expenses, the costs must be necessary for your volunteering efforts while you’re away from home. To qualify, the costs must:
- Be unreimbursed
- Connect directly to the organization’s services
- Result from the specific services you provided
- Be separate from any personal, living, or family expenses
Travel Expenses
When you incur expenses directly related to traveling, you may be able to deduct some of these costs. These expenses can include:
- Air, rail, and bus transportation
- Car expenses
- Lodging costs
- Meals/food costs
- Taxi or other transportation between the airport or station and your lodging
Deductions – Non-Allowable
Value of Time or Service
When you donate your time or provide services to a charity, you’re unable to deduct the value of this work, including any income you lose as a result of serving as an unpaid volunteer.
Certain Travel Expenses
Be aware that you can’t deduct some travel expenses. An example is when you travel for charity but devote a large portion of your trip to recreation or a vacation. Consult with your tax advisor on the specific travel expenses that you can’t deduct.
Tip courtesy of IRS.gov[xii]
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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 S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.
The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
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.
You cannot invest directly in an index.
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 Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
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[i] http://money.cnn.com/2017/01/06/investing/dow-nears-20000-jobs-report-trump-rally/
[ii] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1483074000&period2=1483678800&interval=1d&filter=history&frequency=1d
http://finance.yahoo.com/quote/%5EDJI/history?period1=1483074000&period2=1483678800&interval=1d&filter=history&frequency=1d
http://finance.yahoo.com/quote/%5EIXIC/history?period1=1483074000&period2=1483678800&interval=1d&filter=history&frequency=1d
[iii] https://www.msci.com/end-of-day-data-search
[iv] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=11&b=28&c=2015&d=11&e=31&f=2015&g=d
http://finance.yahoo.com/q/hp?s=%5EDJI&a=11&b=28&c=2015&d=11&e=31&f=2015&g=d
http://finance.yahoo.com/q/hp?s=%5EIXIC&a=11&b=28&c=2015&d=11&e=31&f=2015&g=d
[v] http://www.forbes.com/sites/maggiemcgrath/2017/01/06/in-last-jobs-report-of-obamas-presidency-u-s-adds-156000-jobs-in-december/#2006f2ef4423
[vi] http://www.rpc.senate.gov/policy-papers/december-2016-jobs-report
http://www.forbes.com/sites/maggiemcgrath/2017/01/06/in-last-jobs-report-of-obamas-presidency-u-s-adds-156000-jobs-in-december/#34537c094423
[vii] http://www.theage.com.au/business/markets/american-workers-average-hourly-earnings-rise-29pc-in-2016-20170106-gtnf8u.html
[viii] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/1/6/the-trade-deficit-in-goods-and-services-came-in-at-45.2-billion-in-november
[ix] http://www.ftportfolios.com/Commentary/EconomicResearch/2017/1/3/the-ism-manufacturing-index-rose-to-54.7-in-december
[x] http://www.cnbc.com/2017/01/05/ism-non-manufacturing-index-hits-572-vs-estimate-of-566.html
[xi] http://www.foodnetwork.com/how-to/photos/how-to-make-applesauce-a-step-by-step-guide.html
[xii] https://www.irs.gov/uac/irs-offers-tips-on-charity-travel
[xiii] http://www.health.com/health/gallery/0,,20357829,00.html/view-all
[xiv] http://www.nature.org/greenliving/gogreen/everydayenvironmentalist/repackage-your-packaging.xml
