Dow, S&P, Nasdaq All Rise

Weekly Commentary — March 18, 2019

The Week on Wall Street

The big story last week was the sudden grounding of Boeing 737 Max 8 and 9 passenger jets in dozens of countries. The financial effects of this ban could potentially impact the airline industry and segments of the economy for months.[i]

While the news created a headwind for the Dow Industrials, stocks managed to post solid gains for the week. The Nasdaq Composite rose 3.12%; the S&P 500, 2.46%; the Dow, 2.25%.[ii],[iii],[iv]

Bullish sentiment was also evident overseas. Looking at the MSCI EAFE index, international stocks advanced 1.93%.[v]

Trade Meeting Delayed

Wall Street expected President Trump and Chinese President Xi to discuss trade issues this month. Thursday, Bloomberg reported that their talk had been postponed, with no firm date ahead.[vi]

Muted Inflation

The latest Consumer Price Index showed just a 1.5% rise in overall consumer costs in the year ending in February.

This number does not suggest an overheating economy. During a 60 Minutes interview last week, Federal Reserve Chairman Jerome Powell said the central bank did “not feel any hurry” to make a rate move.[vii]

 

Tax Tip

If you turned 70½ last year, April 1 is your final deadline to receive your initial Required Minimum Distribution (RMD) from a traditional IRA, SEP-IRA, SIMPLE IRA, or employer-sponsored retirement plan. If you take your initial RMD from these retirement accounts this year, you must receive your second RMD from them by December 31, 2019.[viii]

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve wraps up its two-day policy meeting.

Friday: February existing home sales.

Source: Econoday / MarketWatch Calendar, March 15, 2019

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: FedEx (FDX), Michaels Companies (MIK)

Wednesday: General Mills (GIS), Micron Technology (MU)

Thursday: ConAgra Brands (CAG), Darden Restaurants (DRI), Nike (NKE)

Source: Morningstar.com, March 15, 2019

Indexes as of 3:15:19

“Never discourage anyone…who continually makes progress, no matter how slow.” 

– Plato 

Pensions and Annuities: What’s Taxed?

Depending on the types of retirement benefits you receive, they could be taxable. Here are some basics:

Fully Taxable Payments

The pension or annuity payments that you receive are fully taxable if you don’t have an investment in the contract because:

  • You didn’t contribute anything to your pension or annuity
  • Your employer didn’t withhold contributions from your salary
  • You have received all your contributions tax-free in prior years

Partially Taxable Payments

If you made after-tax contributions to your pension or annuity, your pension payments are partially taxable. You don’t pay taxes on the portion of the payment that’s a return of the after-tax amount you paid.

Additional 10% Tax on Early Distributions

Receiving pension or annuity payments before age 59½ may subject you to an additional 10% tax on early distributions. The additional tax doesn’t apply to the portion of a distribution that is tax-free or distributions made:

  • As a part of a series of substantially equal periodic payments beginning after your separation from service
  • Because you’re totally and permanently disabled
  • On or after the death of the plan participant or contract holder
  • After your separation from service and in or after the year you reached age 55

* 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[ix]

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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!

Advisory Services offered through Parsonex Advisory Services, Inc. 8310 S. Valley Highway, Ste. 110, Englewood, CO 80112 (303) 662-8700.

 

[i]https://www.cnbc.com/2019/03/13/boeing-shares-fall-after-report-says-us-expected-to-ground-737-max-fleet.html

[ii]https://quotes.wsj.com/index/SPX

[iii]https://quotes.wsj.com/index/DJIA

[iv]https://quotes.wsj.com/index/NASDAQ

[v]https://quotes.wsj.com/index/XX/990300/historical-prices

[vi]https://www.bloomberg.com/news/articles/2019-03-14/china-u-s-said-to-push-back-trump-xi-meeting-to-at-least-april

[vii]https://www.reuters.com/article/us-usa-economy-inflation-idUSKBN1QT1MF

[viii]https://www.irs.gov/newsroom/tax-time-guide-seniors-who-turned-70-and-a-half-last-year-must-start-receiving-retirement-plan-payments-by-april-1

[ix]https://www.irs.gov/taxtopics/tc410

 

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