Stocks Touch Record Highs

Weekly Commentary — June 24th, 2019

The Week on Wall Street

The S&P 500 hit an all-time peak of 2,964.03, in intraday trading Friday, while improving 2.20% across five market days. The Dow Jones Industrial Average and Nasdaq Composite posted respective, 5-day advances of 2.41% and 3.01%. In addition, the MSCI EAFE benchmark of overseas stocks rose 2.58%.[i],[ii],[iii]

A White House tweet and the latest monetary policy outlook from the Federal Reserve sent the bulls running. These were the top two financial news items in an eventful week – a week in which the value of West Texas Intermediate crude rose 9.4%, the price of gold went above $1,400 for the first time in six years, and the 10-year Treasury yield fell below 2%. (Treasury yields fall when their prices rise, and vice versa.)[iv]

The Fed’s June Policy Statement

The central bank stood pat on interest rates this month, but the expectations of some of its policymakers changed. About half of the 17 Fed officials who have a say in monetary policy now project either one or two quarter-point rate cuts by the end of the year. As recently as March, no Fed official saw grounds for a 2019 cut.[v]

Markets interpreted this shift as a sign that the Fed might soon ease. While a rate cut is by no means a given, traders now believe that the Fed will make either a quarter-point or half-point cut at its July meeting.[vi]

Last Tuesday’s Market-Moving Tweet

A day earlier, stocks rose after President Trump stated that he and Chinese President Xi Jinping “will be having an extended meeting” at this week’s G-20 summit in Japan.[vii]

Investors were encouraged by this note, sensing a chance for progress in U.S.-China trade talks.

Final Thought

With tensions persisting between Iran and the U.S., investors are keeping a close eye on both commodity prices and stock indices. Economic or geopolitical developments could heavily influence the short-term movement of the markets.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Census Bureau’s snapshot of May new home buying and the Conference Board’s monthly consumer confidence index.

Thursday: The federal government’s third (“final”) estimate of first-quarter gross domestic product.

Friday: May consumer spending data from the Department of Commerce as well as the final June consumer sentiment index from the University of Michigan, another key gauge of consumer confidence.

Source: Econoday / MarketWatch Calendar, June 21, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Carnival (CCL)

Tuesday: FedEx (FDX), Micron Technology (MU)

Wednesday: General Mills (GIS), Kraft Heinz (KHC), Paychex (PAYX)

Thursday: Accenture (ACN), Nike (NKE), Walgreens Boots Alliance (WBA)

Friday: Constellation Brands (STZ)

Source: Zacks.com, June 21, 2019

 

The best way to predict your future is to create it.”

― Abraham Lincoln

 

Taxes and Selling Your Home

Tax law provides an exclusion, if you’re a homeowner who qualifies, to exclude all or part of any gain from their income, as a result of the sale of your main home. The ownership and use tests require that during the five-year period ending on the date of the sale, you must have owned and lived in the home for at least two years.

  • If there is a capital gain from the sale of the main home, you may be able to exclude up to $250,000 of the gain from income or $500,000 on a joint return, in most cases. If you can exclude all of the gain, you do not need to report the sale on your tax return.
  • A main home that sells for lower than purchased is not deductible.
  • There are exceptions for those with a disability, certain veterans, and others.

* 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]

 

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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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[i]https://www.cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html

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

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

[iv]https://www.cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html

[v]https://www.latimes.com/politics/la-na-pol-trump-fed-interest-rate-policy-20190619-story.html

[vi]https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

[vii]https://www.cnbc.com/2019/06/18/trump-says-he-and-chinas-xi-spoke-will-have-extended-meeting-next-week-at-g-20.html

[viii]https://www.irs.gov/newsroom/tips-to-keep-in-mind-on-income-taxes-and-selling-a-home

 

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