Stocks were mostly in the negative territory for the week due to rising bond yields and government shutdown fears. The Dow Jones Industrial Average experienced a loss of 1.34%, while the Standard & Poor's 500 slid by 0.74%. The Nasdaq Composite index remained flat, gaining only 0.06% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell by 1.95%.
Stocks Follow the Bond Market
Last week, the bond market caused fluctuations in stock prices as investors worried about the increasing bond yields. Although stocks started the week with minor gains, they later continued their downward trend in September due to poor housing data and decreased consumer confidence. The surge in bond yields, which pushed the 10-year Treasury yield to nearly a 15-year high, was a significant factor that may have negatively impacted investor sentiment.
Mixed Economic Signals
Recent indications suggest that the labor market has been cooling, which could be a hopeful sign for the end of rate hikes. However, the initial jobless claims report released on Thursday showed a slight increase of 204,000, which was still the second-lowest reading since January and below economists' expectations of 215,000. Additionally, continuing claims decreased by 12,000.
On the same morning, the final estimate for second-quarter GDP was released, revealing an unchanged 2.1% annualized growth rate from the previous estimate. However, the consumer spending rate was revised downwards from 1.7% to 0.8%, which is a worrying development since consumer spending is the main engine of the U.S. economy.
This Week: Key Economic Data
Monday: Institute for Supply Management (ISM) Manufacturing Index.
Tuesday: Job Openings and Turnover Survey (JOLTS).
Wednesday: Automated Data Processing (ADP) Employment Report. Institute for Supply Management (ISM) Services Index.
Friday: Employment Situation.
Source: Econoday, September 29, 2023
This Week: Companies Reporting Earnings
Thursday:Constellation Brands, Inc. (STZ)
Source: Zacks, September 29, 2023
Food For Thought
"Time is the only critic without ambition."
Who Can Deduct Car Expenses on Their Tax Returns?
Can you deduct expenses such as gas, depreciation, and lease payments on your tax returns? If you are a business owner or self-employed individual, you may be able to. If you use your car for business and personal purposes, you will want to base any deductions on the mileage used for business.
There are two ways to calculate the car expenses you can deduct. The first method calculates and deducts expenses, including depreciation, lease payments, gas and oil, tires, repairs and tune-ups, insurance, and registration fees.
The second is to use the standard mileage rate, which is a rate calculated to represent gas and some of the above factors. In 2023, the standard mileage rate is 65.5 cents per mile. Taxpayers who want to use the standard mileage rate for a car they own must use this method in the first year the vehicle is available for use in their business.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Healthy Living Tip
What Are Essential Oils?
You've likely heard about the many potential benefits of essential oils, but what exactly are essential oils?
Essential oils are compounds extracted from plants, obtained through distillation or cold pressing. The best essential oils are pure, with no other chemicals added. In addition to using essential oils in a diffuser as aromatherapy, you can apply them topically. Inhaling the aromas from essential oils may stimulate areas of your limbic system, a part of your brain that plays a role in emotions, behaviors, sense of smell, and long-term memory.
Tip adapted from Healthline8
What goes in the blank below: Bob is Ken’s son. Therefore, Ken is the ______of Bob’s father.
Photo Of The Week
Gasadalur Waterfall, moody sky, Vagar, Faroe Islands
Footnotes and Sources
2. The Wall Street Journal, September 29, 2023
3. The Wall Street Journal, September 29, 2023
4. CNBC, September 26, 2023
5. FX Street, September 28, 2023
6. MarketWatch, September 28, 2023
7. IRS.gov, April 6, 2023
8. Healthline April 24, 2023
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
Copyright 2023 FMG Suite.
Weekly Market Insights: Will A Government Shutdown Emerge?
October 02, 2023