We’re only a few weeks into 2018, and stocks are showing quite a strong performance so far. Last week, major domestic indexes posted gains yet again, with all 3 up at least 5% this year. By Friday, the S&P 500 had added another 0.86%, and both the Dow and NASDAQ were up 1.04%.[1] All 3 indexes hit new record highs at least once during the week.[2]
In addition to the solid performance for U.S. equities, we’re also experiencing synchronized global growth. European and Asian stocks grew last week, and China’s growth data was more positive than expected.[3] Overall, international stocks in the MSCI EAFE added a healthy 1.24% last week. Year to date, the MSCI is up 4.95%.[4]
What happened last week?
Two key topics drove conversations: corporate earnings and a government shutdown.
- Corporate Earnings
In the U.S., corporate earnings season dominated much of the economic news as reports continue to show companies doing well. For organizations that released their 4th-quarter results, 79% beat earnings projections and 89% exceeded sales estimates.[5]
- Government Shutdown
The Federal government shut down on Saturday morning, January 20th, after the House and Senate failed to pass a bill to extend funding. This shutdown is the first since 2013.[6]
How did these occurrences affect the markets?
While a potential shutdown loomed last week, overall, investors had little reaction to its possibility.[7] Volatility did increase last week as investors waited to see whether or not the House and Senate would reach a compromise on government funding.[8] However, the solid news from corporate earnings seemed to outweigh concerns about the Federal government.[9] Rather than focusing on drama in Washington, many traders are paying attention to the strength in U.S. corporations’ fundamentals.[10]
As more data unfolds, we will continue to monitor the relationship between government policy and economic performance. As always, if you have any questions about how current events and market developments may be affecting you, contact us any time.
ECONOMIC CALENDAR
Wednesday: Existing Home Sales
Thursday: New Home Sales, Jobless Claims
Friday: Durable Goods Orders, GDP
| DATA AS OF 1/19/2018 | 1 WEEK | SINCE 1/1/18 | 1 YEAR | 5 YEAR | 10 YEAR |
| STANDARD & POOR’S 500 | 0.86% | 5.11% | 24.15% | 13.59% | 7.81% |
| DOW | 1.04% | 5.47% | 32.13% | 13.82% | 7.98% |
| NASDAQ | 1.04% | 6.27% | 32.42% | 18.54% | 12.11% |
| INTERNATIONAL | 1.24% | 4.95% | 25.71% | 5.40% | 0.48% |
| DATA AS OF 1/19/2018 | 1 MONTH | 6 MONTHS | 1 YEAR | 5 YEAR | 10 YEAR |
| TREASURY YIELDS (CMT) | 1.28% | 1.62% | 1.79% | 2.45% | 2.64% |
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 to Get Tax Transcripts from the IRS
The IRS urges taxpayers to retain tax returns for at least the last three years. Those who need previous returns may check with their tax preparer or contact the IRS. The agency charges prior-year returns. Transcripts are free.
Two types of transcripts are available from the IRS:
- Tax-return transcripts: These show most line items. They don’t show changes made after the filing and are available only for the current tax year.
- Tax-account transcripts: These display basic data such as return type, marital status, adjusted gross income, taxable accounts, and all payment types.
To obtain transcripts, you can:
- Order online: Go to “Get Transcript” at IRS.gov.
- Order by phone: Call 800-908-9946.
- Order by mail: Send completed Form 4506-T or Form 4506-EZ to the IRS.
It may take 30 days to receive a transcript by mail and 75 days for tax return copies.
Tip adapted from IRS.gov.[11]
*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.
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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.
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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[1] 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
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
[2] https://www.cnbc.com/2018/01/19/us-stocks-government-shutdown-earnings.html
[3] https://www.bloomberg.com/news/articles/2018-01-18/asian-stocks-face-mixed-start-treasuries-drop-markets-wrap
[4] https://www.msci.com/end-of-day-data-search
[5] https://www.cnbc.com/2018/01/19/us-stocks-government-shutdown-earnings.html
[6] https://www.marketwatch.com/story/shutdown-all-but-certain-at-midnight-as-spending-bill-lacks-votes-2018-01-19
[7] https://www.marketwatch.com/story/shutdown-all-but-certain-at-midnight-as-spending-bill-lacks-votes-2018-01-19
[8] https://www.cnbc.com/2018/01/19/us-stocks-government-shutdown-earnings.html
[9] https://www.marketwatch.com/story/shutdown-all-but-certain-at-midnight-as-spending-bill-lacks-votes-2018-01-19
[10] https://www.cnbc.com/2018/01/19/us-stocks-government-shutdown-earnings.html
[11] https://www.irs.gov/newsroom/how-to-get-tax-transcripts-and-copies-of-tax-returns-from-the-irs
