Stocks Post Small Weekly Gains

Weekly Commentary — February 11th, 2019

The Week on Wall Street       

Major U.S. stock benchmarks eked out slight gains last week, with corporate profit reports and news about U.S.-China trade negotiations vying for investor attention over five trading sessions.

The big three ended the week little changed from where they settled the previous Friday. The Dow Jones Industrials rose 0.17% percent, while the S&P 500 Index gained 0.05% percent. The NASDAQ Composite ended the week up 0.47%. Looking at international stocks, the MSCI EAFE index retreated 0.47%.1,2

Earnings Scorecard

As of last Friday, 66% of all S&P 500 companies had reported fourth-quarter earnings. So far, 71% of these firms have announced earnings exceeding estimates, and 62% have seen revenues top projections.3

Halfway through earnings season, 2019 future guidance has been a mixed bag for S&P 500 companies.For Wall Street, future earnings can be just as important as current earnings. We keep a close eye on both.

Tariff Tensions

March 1 is the 90-day deadline set by President Trump for a trade deal with China. If no agreement is reached, the U.S. may consider a new round of tariffs. On Thursday, news that President Trump and Chinese President Xi may not meet before the March 1 deadline added to the market volatility.

The decision by the U.S. on new tariffs may hinge on how much progress has been made toward a new agreement. We don’t expect that to become clear until the deadline nears.

State of the Service Sector

Many indicators help economists take the pulse of the overall economy. The Institute for Supply Management keeps a critical, but not widely followed, index, which helps gauge the health of the service sector.

The January reading on this index came in at 56.7. Any reading above 50 shows that the service industry is seeing solid growth.4

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: January’s Consumer Price Index, which measures monthly and yearly inflation.

Thursday: December retail sales figures (a delayed release due to the government shutdown).

Friday: January’s preliminary University of Michigan consumer sentiment index, a gauge of consumer confidence levels.

Source: Econoday / MarketWatch Calendar, February 8, 2019

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Loews Corp (L)

Tuesday: Activision Blizzard (ATVI), HubSpot (HUBS), Occidental Petroleum (OXY)

Wednesday: Cisco (CSCO), Hilton Worldwide Holdings (HLT), Yelp (YELP)

Thursday: Applied Materials (AMAT), CBS (CBS), Coca-Cola (KO)

Friday: Deere & Co. (DE), PepsiCo (PEP)

“The greatest happiness of life is the conviction that we are loved; loved for ourselves, or rather, loved in spite of ourselves.” 

 – Victor Hugo

Married Couples in Business

       Under the provision of the Small Business and Work Opportunity Tax Act of 2007, a qualified joint venture by a married couple filing a joint return is not treated as a partnership for federal tax purposes. Income, gains, losses, deductions, and credits are divided between the spouses, depending on their interest in the business. Each spouse accounts for their share of these items as a sole proprietor.

A qualified joint venture involves the conduct of a trade or business if:

  1. The only members of the joint venture are a married couple who file a joint tax return
  2. Both spouses materially participate in the trade or business
  3. Both spouses elect to have the provision apply, and the business is co-owned by both spouses
  4. The business isn’t held in the name of a state law entity, such as a partnership or limited liability company (LLC)

        If one spouse is employed by the other (as an employee – not an equal business partner), then you’ll probably need to pay Social Security and Medicare taxes for them.

* 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[5]

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If you have any questions or would like to learn more about developing strategies to pursue a prosperous and safe future, contact me today at Derek.Merkler@Parsonex.com! You can also visit my website to learn about how I help our service members and veterans plan for and achieve financial independence.

My blog discusses a myriad of financial topics and challenges, book reviews, and commentary on current events in the financial world to benefit our military and veteran community.  I attempt to be as thorough as possible when examining each subject but can never account for every possible scenario.  Please remember to consult with your advisers for advice on your particular situation.  Thank you for reading!

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1https://markets.wsj.com/

2https://quotes.wsj.com/index/XX/990300/historical-prices

3https://insight.factset.com/earnings-season-update-february-8-2019 

4https://www.instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1

5https://www.irs.gov/businesses/small-businesses-self-employed/married-couples-in-business

 

 

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