S&P 500 Tops 3,000!

Weekly Commentary — July 15th, 2019

The Week on Wall Street

Friday, the S&P 500 settled above 3,000 for the first time, after rising 0.78% for the week. The Dow Jones Industrial Average chalked up a milestone of its own: the blue chips ended the week above 27,000, gaining 1.52% on the way. Additionally, the Nasdaq Composite wrapped up the week 1.01% higher. The MSCI EAFE index, a gauge of overseas developed markets, fell 0.65%.[1],[2],[3]

Stocks rallied at midweek with help from Federal Reserve Chairman Jerome Powell’s congressional testimony on monetary policy, plus the latest Fed meeting minutes.

Jerome Powell’s Statements

Wednesday, Chairman Powell told Capitol Hill lawmakers that “uncertainties around global growth and trade continue to weigh on the outlook” of the Federal Open Market Committee. He also noted that “manufacturing, trade, and investment are weak all around the world.”[iv]

On the same day, the Fed presented the minutes of its June policy meeting. The record shared the belief of some Fed officials that “a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy.”[v]

Overall Inflation Remains Muted

The June Consumer Price Index, released last week by the Bureau of Labor Statistics, measured only 1.6% yearly inflation. The Federal Reserve uses the Bureau of Economic Analysis’ Core Personal Consumption Expenditures (PCE) Price Index as its inflation barometer; in its latest edition, it showed just a 1.5% year-over-year rise.[vi]

Currently, the Fed has a yearly inflation target of 2.0%. In the past, it has often raised interest rates in response to increasing inflation, which can potentially slow growth and affect hiring and employment levels. Absent significant inflation pressure, such a response may not be forthcoming.[vii]

Final Thought

All eyes are on corporate earnings this week, as prominent banks and about two dozen other S&P 500 firms report second-quarter results. Market participants have much to consider in terms of profits, revenue, and guidance.

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Fed chair Jerome Powell delivers a speech on monetary policy at the G7 summit in France, and the Census Bureau releases its June retail sales report.

Friday: The University of Michigan presents its preliminary July consumer sentiment index, measuring consumer confidence and perceptions of the economy.

Source: Econoday / MarketWatch Calendar, July 12, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Citigroup (C), J.B. Hunt (JBHT)

Tuesday: Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Wells Fargo (WFC)

Wednesday: Bank of America (BAC), Netflix (NFLX), Novartis (NVS), Abbott Labs (ABT)

Thursday: Microsoft (MSFT), UnitedHealth (UNH)

Friday: American Express (AXP)

Source: Zacks, July 12, 2019

 

“Until one has loved an animal, a part of one’s soul remains unawakened.”  

– Anatole France

 

Potential, Pet-Related Tax Deductions

 Because this week’s tips are all about our furry friends, we thought we’d share some potential pet-related tax deductions. Tax law is always changing, so these deductions may no longer be relevant if new developments arise, but they’re things to consider if you have four-legged friends at home.

  • Business animals, or animals that live at a trade or business, can be a potential deduction. This would include animals that primarily live at a business, such as a dog that serves as a security measure or a cat that keeps the rodent population at bay. You may be able to deduct expenses, like food, vet visits, and training associated with the job.
  • Donations to pet-related charity or organization may be deductible. This is different, though, than adopting a pet, which isn’t tax deductible.
  • Fostering pets can also be a tax write-off. This is considered a charitable contribution, and expenses for fostering a pet for an IRS-qualified 501(c)(3) organization can be deducted.
  • If you have a service dog, these expenses are also tax deductible. According to IRS Publication 502, deductions are available for individuals requiring a guide dog for vision or hearing impairments.

* 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 ThinkAdvisor[1]

 

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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.


[1]https://www.thinkadvisor.com/2018/04/03/6-potential-pet-related-tax-deductions/?slreturn=20190421211413

[1]https://www.cnbc.com/2019/07/12/stock-market-dow-futures-rise-after-fed-hints-at-rate-cut-ahead.html

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

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

[iv]https://www.investopedia.com/markets-cheer-lower-interest-rate-outlook-4692639

[v]https://www.investopedia.com/markets-cheer-lower-interest-rate-outlook-4692639

[vi]https://www.reuters.com/article/us-usa-economy-inflation/u-s-core-cpi-posts-biggest-gain-in-nearly-1-1-2-years-idUSKCN1U61NR?il=0

[vii]https://www.reuters.com/article/us-usa-economy-inflation/u-s-core-cpi-posts-biggest-gain-in-nearly-1-1-2-years-idUSKCN1U61NR?il=0

 

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