May Ends with a Retreat

The Week on Wall Street

Stocks struggled during a 4-day market week as the U.S.-China trade standoff continued to weigh on the minds of market participants. From the Friday, May 24 close to the Friday, May 31 close, the S&P 500 retreated 2.62%; the Nasdaq Composite, 2.41%; the Dow Jones Industrial Average, 3.01%. The MSCI EAFE index of overseas stocks dipped just 1.47% in a week.[i],[ii]

Trade is dominating the conversation in the financial markets, with developments steadily unfolding. Wednesday, China’s state media suggested that the country could soon cut off exports of rare earths to the U.S. Late Thursday, the Trump administration announced 5% tariffs on all imports from Mexico, effective June 10; these taxes could rise in the coming months.[iii],[iv]

Meanwhile, on Main Street…

The Conference Board’s consumer confidence index soared to 134.1 in May, its highest reading since November; the consumer view of present economic conditions was the best since the end of 2000. Additionally, the University of Michigan’s consumer sentiment index ended May at 100.00, near the 15-year peak of 102.4 seen earlier in the month.[v],[vi]

Spring also brought a solid advance in consumer spending. April’s gain was 0.3%, according to the Bureau of Economic Analysis.[vii]

Final Thought

While Wall Street remains cautious and concerned about trade, consumers appear to be upbeat, sensing widespread economic prosperity. This underscores the fact that the state of the economy does not necessarily correspond to the state of the stock market (and vice versa).

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management releases its latest factory purchasing manager index, which takes the pulse of the U.S. manufacturing sector.

Tuesday: Federal Reserve Chairman Jerome Powell speaks on monetary policy at the Federal Reserve Bank of Chicago.

Wednesday: Payroll giant ADP releases its May private-sector employment snapshot.

Friday: The Department of Labor presents its May employment report.

Source: Econoday / MarketWatch Calendar, May 31, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday:Cracker Barrel Old Country Store (CBRL), Salesforce (CRM)

Thursday:Beyond Meat (BYND), J.M. Smucker (SJM)

Source: Morningstar.com, May 31, 2019

 

“If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”

― Jeff Bezos

 

Hobby or Business?

You may make jewelry, sell baked goods, or do some carpentry. When you start selling these goods, the IRS may need for you to report this income. So, how do you know when it remains a hobby or becomes a business? When your hobby becomes profitable, it may be a business. The IRS offers some factors for you to consider, including:

  • Do you carry on the activity in a businesslike manner and maintain books and records?
  • Does the time and effort you put into the activity indicate you intend to make it profitable?
  • Do you depend on income from the activity for your livelihood?
  • Are your losses due to circumstances beyond your control (or are normal in the startup phase)?
  • Have you changed your methods of operation in an attempt to improve profitability?
  • Do you or your advisors have the knowledge needed to carry on the activity as a successful business?
  • Were you successful in making a profit in similar activities in the past?

*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[viii]

Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues.

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.wsj.com/market-data

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

[iii]https://apnews.com/af8ed9e6b95f4d14b32e6e0135949159

[iv]https://www.foxbusiness.com/markets/us-stocks-wall-street-may-31-2019

[v]https://www.bloomberg.com/news/articles/2019-05-28/u-s-consumer-confidence-tops-forecasts-rises-to-six-month-high

[vi]https://www.investing.com/economic-calendar

[vii]https://www.investing.com/economic-calendar

[viii]https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

 

Leave a Reply