The Week on Wall Street
Stocks drifted lower last week, weighed down by Federal Reserve Chairman Jerome Powell’s unsettling comments on the economy and signs of renewed tensions with China.
The Dow Jones Industrial Average fell 2.65%, while the Standard & Poor’s 500 retreated 2.26%. The Nasdaq Composite Index slipped 1.17% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, slid 3.66%.[1],[2],[3]
Stocks Pull Back
Stocks moved lower throughout most of last week on worries that the emerging economic reopening might accelerate the spread of COVID-19. Comments by Fed Chair Powell added to the downside pressure when he expressed concern about the path ahead for the U.S. economy.
The stock market managed to find some firmer footing, posting a strong gain on Thursday. Stocks rallied again on Friday, overcoming headlines that suggested a souring relationship with China and a report that showed U.S. retail sales dropped 16.4% in April.[4]
Powell Speaks
Fed Chair Powell spoke last Wednesday and painted a somber economic outlook, remarking that “the path ahead is highly uncertain and subject to significant downside risks.” He urged the White House and Congress to pass additional financial relief to help the economic recovery, adding that there was no plan on the Fed’s part to cut the federal funds rate to below zero.[5]
Powell also referenced internal Fed research that found those least able to weather the current economic environment were most impacted, with nearly 40% of households making less than $40,000 per year having lost a job in March.[6]
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Housing Starts.
Wednesday: FOMC (Federal Open Market Committee) Minutes.
Thursday: Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.
Source: Econoday, May 15, 2020
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
Monday: Baidu (BIDU)
Tuesday: Walmart (WMT), Home Depot (HD)
Wednesday: Kohls (KSS), Target (TGT), Lowes Cos. (LOW), Expedia Group (EXPE)
Thursday: Nvidia (NVDA), TJX Cos. (TJX), Ross Stores (ROST), Intuit (INTU)
Friday: Deere (DE), Alibaba Group (BABA), Pinduoduo (PDD)
Source: Zacks, May 15, 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.
How to Amend Your Return
If you discover that you’ve made an error on your tax return, you may need to file an amended return. Though you don’t need to file if you’ve made a simple math error or left out forms (the IRS corrects for those automatically), you should file an amended return for any missed credits, deductions, filing status, or income.
- Use Form 1040X to file an amended return.
- You’ll need to use separate forms for each year that you need to amend.
- If you use any other forms or need to submit new documentation, attach them to the 1040X form.
- Pay any additional taxes you owe as soon as possible to avoid accruing additional interest and penalties.
* 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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Consult your financial professional before making any investment decision.
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[1] The Wall Street Journal, May 15, 2020
[2] The Wall Street Journal, May 15, 2020
[3] The Wall Street Journal, May 15, 2020
[4] CNBC.com, May 15, 2020
[5] The Wall Street Journal, May 13, 2020
[6] The Wall Street Journal, May 13, 2020
[7] IRS.gov, June 4, 2019
