Big Gains for the Major Indices

Weekly Commentary — June 10th, 2019

The Week on Wall Street

Stocks rallied during a week in which Wall Street was buffeted by headlines. The S&P 500 rose 4.41%. The Nasdaq Composite and Dow Jones Industrial Average respectively added 3.88% and 4.71%. The MSCI EAFE index of overseas stocks improved 2.02% across five days.[1],[2] Following a mixed Monday, the market jumped Tuesday after dovish remarks from Federal Reserve Chairman Jerome Powell. Breaking out of a 6-week losing streak, the Dow had its best week since November.[3]

Jerome Powell’s Comments

Speaking at the Federal Reserve Bank of Chicago, the Fed chair stated that central bank officials “will act as appropriate to sustain the expansion” of the economy in the face of “recent developments involving trade negotiations and other matters.”[4]

The next 2-day Fed policy meeting ends on June 19, with a press conference to follow.[5]

Hiring Cools

Employers added just 75,000 net new jobs to their payrolls in May, according to the Department of Labor. Economists polled by Reuters thought that the gain would be 185,000. The main unemployment rate held at 3.6% last month; the U-6 rate, which includes the underemployed and those who have stopped looking for work, fell 0.2% to 7.1%.[6]

To some analysts, the weak May hiring number hinted at private-sector concern over tariffs. To others, it simply signified the possibility that the economy may be at or near full employment.[7]

Final Thought

While breaking news does often merit investor attention, refrain from letting the headlines of the moment prompt you into emotional decisions. Brace yourself for further headlines that may drive market volatility because new developments are arriving quickly in the financial markets.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The latest Consumer Price Index, showing the rate of inflation in May and across the past 12 months.

Friday: The Census Bureau’s May retail sales report as well as the University of Michigan’s initial June consumer sentiment index, measuring consumer confidence levels.

Source: Econoday / MarketWatch Calendar, June 7, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: H&R Block (HRB)

Wednesday: Lululemon Athletica(LULU)

Thursday: Broadcom (AVGO)

Source: Morningstar.com, June 7, 2019

Indices as of June 6:7:19

“You may have to fight a battle more than once to win it.”

– Margaret Thatcher

 

Penalty Relief

 If you make a mistake on your income taxes, you may receive a penalty from the IRS. In some circumstances, the IRS can provide relief from certain penalties, such as:

  • Failing to file a tax return
  • Failing to pay on time
  • Failing to deposit certain taxes as required

Types of penalty relief offered by the IRS:

Reasonable Cause

If you can show that you tried to meet your obligations, but didn’t succeed in doing so, you may be forgiven. Some circumstances would be a house fire, a natural disaster, or a death in the family.

Administrative Waiver and First-Time Penalty Abatement

Relief may be possible if you:

  • Didn’t previously have to file a return or had no penalties for the three years prior to the IRS assessed penalty.
  • Filed all currently required returns or filed an extension of time to file.
  • Paid or arranged to pay any tax due.

Statutory Exception

It’s possible you’ve received incorrect written advice from the IRS, which may result in an exception.

* 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[8]

 

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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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[1]https://www.wsj.com/market-data

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

[3]https://www.cnbc.com/2019/06/07/us-futures-edge-higher-as-wall-street-rally-set-to-continue-jobs-data-in-focus.html

[4]https://www.cnbc.com/2019/06/04/powell-says-the-fed-will-act-as-appropriate-to-sustain-the-expansion.html

[5]https://www.federalreserve.gov/newsevents/calendar.htm

[6]https://www.reuters.com/article/us-usa-economy-instant/us-may-payrolls-rose-less-than-expected-idUSKCN1T81GG

[7]https://www.reuters.com/article/us-usa-economy-instant/us-may-payrolls-rose-less-than-expected-idUSKCN1T81GG

[8]https://www.irs.gov/newsroom/heres-what-taxpayers-should-know-about-penalty-relief

 

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