Weekly Commentary — February 25th, 2019
The Week on Wall Street
Stocks rallied last week as optimism about a potential U.S.-China trade deal grew. The S&P 500 advanced 0.80% during the 4-day trading week to 2,792.67. The Nasdaq Composite improved 0.86% to 7,527.54, and the Dow Jones Industrial Average gained 0.64% to 26,031.81.
The renewed prospects for a trade pact were not the only development investors found appealing last week. There were indications that the Federal Reserve might be a bit less committed to its plans to raise interest rates further this year.[i],[ii]
A Look at the Fed Minutes
There were no surprises from the Federal Reserve’s Board of Governors, who released the transcript from their January meeting on Tuesday. Investors pore over the meeting minutes looking for clues about the Fed’s next move on short-term interest rates.
Fed policymakers appeared split on what’s next. Some felt another rate hike was needed to help slow the strong economy, while others favored a “wait-and-see” approach.[iii]
Home Sales Slump
In January, existing home sales were at their slowest pace since November 2015, and down 8.5% year-over-year. One factor: rising home values. Last month, the median single-family home sale price was $247,500, almost $7,000 higher than a year ago.
Mortgage rates have now fallen for three consecutive weeks, a development that may influence home buying decisions in coming months. Thursday, a Freddie Mac survey found the average interest rate on a 30-year, fixed-rate loan at just 4.35%.[iv],[v]
The Dow Jones and Nasdaq have posted gains for nine straight weeks and are now at levels unseen since early November. Concerns over volatility have decreased, but that does not mean it is off the table. Whatever the market does in the coming weeks and months, remember your investment strategy should be based on your goals, risk tolerance, and time horizon.2
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Fed chair Jerome Powell begins two days of testimony on monetary policy in the Senate.
Wednesday: The National Association of Realtors releases its latest pending home sales index.
Thursday: The federal government provides its first estimate of fourth-quarter economic growth.
Source: Econoday / MarketWatch Calendar, February 22, 2019
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: AutoZone (AZO), Home Depot (HD), Medpace (MEDP)
Wednesday:Apache (APA), Best Buy (BBY), Office Depot (ODP)
Thursday: Anheuser-Busch (BUD), Dell Technologies (DELL), Splunk (SPLK)
Source: Morningstar.com, February 22, 2019
“It is better to fail in originality than to succeed in imitation.”
– Herman Melville
What is the Bank Secrecy Act?
In a partnership with the U.S. National Money Laundering Strategy, the IRS requires businesses to keep records and file reports that could be useful in the detection of money laundering, criminal enterprise, terrorism, or tax evasion. Here are some of the financial situations that could require reporting:
Report of Cash Payments Over $10,000 Received in a Trade or Business
If your business receives more than $10,000 in cash from one buyer (single transaction) or two or more related transactions, you’ll need to file form 8300.
Report of Foreign Bank and Financial Accounts
If you live in the U.S. and have financial interest or signature authority over a foreign financial bank account, mutual fund, or trust that exceeds $10,000 anytime during the calendar year.
Money Services Businesses
If you’re in the business of cashing checks, currency exchange, or selling money orders, traveler’s checks, or prepaid access products for an amount greater than $1,000 per person, per day, in one or more transactions.
* 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[vi]
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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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