Benchmarks End Week Lower

Weekly Commentary — September 30th, 2019

The Week on Wall Street

Stocks retreated last week. Traders worried that the formal impeachment inquiry of President Donald Trump might distract White House officials from their pursuit of a trade deal with China, and shift the focus of Congress away from consideration of the United States-Mexico-Canada Agreement (USMCA). Also, news broke Friday that the White House was considering restricting levels of U.S. investment in Chinese firms.

The Dow Jones Industrial Average lost less than the Nasdaq Composite and S&P 500. Blue chips declined 0.43% week-over-week, while the S&P fell 1.01% and the Nasdaq dipped 2.19%. The MSCI EAFE index, tracking developed overseas stock markets, lost 0.89%.[i],[ii],[iii]

Incomes Grow, Spending Slows

Data released Friday by the Bureau of Economic Analysis showed household incomes rising 0.4% in August. Consumer spending improved just 0.1%, however; that was the smallest personal spending advance in six months.

Another BEA report noted that “real” consumer spending (that is, consumer spending adjusted for inflation) rose 4.6% during the second quarter.[iv],[v]

A Slip in Consumer Confidence

The Conference Board’s Consumer Confidence Index fell to 125.1 for September. That compares to a reading of 134.2 in August. Lynn Franco, the CB’s director of economic indicators, wrote that “the escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing.”

In contrast, the University of Michigan’s Consumer Sentiment Index ended September at 93.2, an improvement from a final August mark of 89.8.[vi],[vii]

What’s Ahead

On October 10, the Social Security Administration is scheduled to announce the 2020 cost of living adjustment (COLA) for Social Security retirement benefits. Earlier this month, the Bureau of Labor Statistics yearly inflation data pointed to a possible 2020 COLA in the range of 1.6%-1.7%.[viii]

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Institute for Supply Management presents its September Purchasing Managers Index for the factory sector, a barometer of U.S. manufacturing health.

Wednesday: ADP, the payroll processor, releases its September National Employment Report.

Thursday: ISM’s non-manufacturing PMI arrives, reporting on the state of the U.S. service sector.

Friday: The Department of Labor’sSeptember jobs report appears, and Federal Reserve Chairman Jerome Powell gives a keynote speech at a Fed event in Washington D.C.

Source: Econoday, September 27, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Lennar (LEN), Paychex (PAYX)

Thursday: Constellation Brands (STZ), Costco (COST), PepsiCo (PEP)

Source: Zacks, September 27, 2019

Indices as of 9:27:19

 

“Singing in the shower is all fun and games until you get shampoo in your mouth. Then, it’s a soap opera.”

– Unknown

 

Be on the Lookout for Tax Deduction Carryovers

There are many tax deductions and credits that taxpayers should be aware of, but what if you can’t reap the full benefits of a deduction in the given filing year? Some deductions and credits may be eligible to roll over into future years. These tax carryovers could save you money on your tax return.

Some deductions or credits may not be fully used in one tax year and are eligible to be carried over into future years, including:

  • When you have a net operating loss
  • When your total expense for a permitted deduction exceeds the amount you’re allowed to deduct in a given year
  • When a credit you qualify for exceeds the amount of tax you owe in a year
  • Adoption tax credits
  • Foreign tax credits
  • Credits for energy efficiency

Track these (or have your software do it), so you don’t forget them from one year to the next.

* 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 Credit Karma[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.cnn.com/2019/09/27/investing/dow-stock-market-today-oil/index.html

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

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

[iv]https://www.marketwatch.com/story/consumer-spending-barely-rises-in-august-as-americans-save-more-2019-09-27

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

[vi]https://www.conference-board.org/data/consumerconfidence.cfm

[vii]https://www.marketwatch.com/story/consumer-sentiment-rebounds-in-september-but-americans-more-anxious-2019-09-27

[viii]https://finance.yahoo.com/news/3-events-could-push-social-100600194.html

[ix]https://www.creditkarma.com/tax/i/tax-carry-forward/

 

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