Last week, the stock market experienced significant gains, primarily led by the tech industry. Despite mixed results from December inflation reports, investors remained hopeful about the possibility of Fed rate cuts this year, which boosted their confidence. The week was turbulent, but it ended on a positive note. The stock market witnessed a surge on Monday, led by tech shares, with the Nasdaq having its best day since November 14. Stocks began to tumble on Tuesday initially, but the market rebounded late in the session. On Wednesday, stocks rallied, and investors awaited the inflation news in the following days. However, on Thursday, stocks fell initially in response to a higher-than-expected inflation report, highlighting investor concerns regarding the certainty, timing, and extent of Fed rate cuts later this year. On Friday, earnings season began, and major banks reported mixed results. Nonetheless, stocks had a strong finish and recovered most of their losses, ending the week with solid gains.
Source: YCharts.com, January 13, 2024. Weekly performance is measured from Monday, January 8, to Friday, January 12. ROC 5 = the rate of change in the index for the previous 5 trading days. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points.
A Tale of Two Inflation Reports
The biggest economic news last week was fresh inflation data. The Consumer Price Index (CPI) rose 0.3 percent in December over the prior month and 3.4 percent compared with a year prior. That number was higher than the 3.2 percent increase economists expected and a few ticks elevated from the 3.1 percent figure in November.6,7
Last week, the major economic news was related to fresh inflation data. The Consumer Price Index (CPI) increased by 0.3 percent in December, as compared to the previous month, and 3.4 percent compared to the same period last year. This figure was higher than the expected 3.2 percent increase suggested by economists and slightly up from the 3.1 percent figure recorded in November.
The Core CPI for December, which does not include the volatile food and energy components, rose by 3.9 percent. This was a slight decrease from the 4.0 percent gain recorded in November.
On Friday, the Producer Price Index (PPI), which measures inflation by domestic producers, showed a drop of 0.1 percent for December. This could possibly suggest that the CPI's uptick may have been an anomaly.
This Week: Key Economic Data
Tuesday: Empire State Manufacturing Index.
Wednesday: Retail Sales. Industrial Production.
Thursday: Jobless Claims. Housing Starts. Petroleum Status Report.
Friday: Existing Home Sales.
Source: Investor’s Business Daily, Econoday economic calendar; January 10, 2024
This Week: Companies Reporting Earnings
Tuesday: Morgan Stanley (MS), The Goldman Sachs Group, Inc. (GS), Interactive Brokers Group, Inc. (IBKR)
Wednesday: The Charles Schwab Corporation (SCHW), U.S. Bancorp (USB), Alcoa (AA)
Thursday: M&T Bank Corporation (MTB), Northern Trust Corporation (NTRS)
Friday: Schlumberger Limited (SLB), The Travelers Companies, Inc. (TRV), State Street Corporation (STT)
Source: Zacks, January 10, 2024
Food For Thought
"Never mistake a clear view for a short distance."
– Paul Saffo
Know and Understand Your Correct Filing Status
It is important for taxpayers to know their correct filing status and understand each option. The filing status they choose can affect several aspects of their tax return, including whether they are required to file a federal tax return, whether they are eligible to receive a refund, the amount of their standard deduction, whether they can claim certain tax credits, and the total amount of tax they owe.
There are five filing statuses to choose from:
1. Single: This status is for taxpayers who are unmarried, divorced, or legally separated under a divorce or separate maintenance decree governed by state law.
2. Married filing jointly: Married taxpayers can file a joint tax return with their spouse. If one spouse passes away, the surviving spouse can file a joint return for that year.
3. Married filing separately: Married couples can choose to file separate tax returns if it results in a lower tax burden than filing a joint return.
4. Head of household: Unmarried taxpayers may qualify for this status, but specific rules apply. For example, they must have paid more than half the cost of maintaining a home for themselves and a qualifying person living in the home for half the year.
5. Qualifying widow(er) with dependent child: This status may apply to taxpayers whose spouse died during one of the previous two years and who have a dependent child. Other conditions also apply.
It's worth noting that this information is not intended to replace specific individualized tax advice. We recommend that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov9
Healthy Living Tip
Keeping Your Heart Rate Up (When Temperatures Are Down)
Colder weather can sap our motivation to leave the warmth of home unless we must, but you don’t need to stop working out in winter. Here are a few ways to feel the burn indoors while Mother Nature keeps it cool outside.
During winter, the cold weather can make us feel less motivated to leave the warmth of our homes. However, there are still ways to exercise and keep active indoors. Here are a few tips to help you feel the burn while staying indoors:
1. Try using a rebounder (mini-trampoline) or a jump rope. If you don't have either of these, you can still mimic the exercises by keeping your hands at your sides and rotating them as if you had the equipment.
2. Look for workout videos on YouTube or other streaming platforms. If you don't have enough time to complete the entire workout in one go, you can always pause it and return to it later.
3. If you can afford it, invest in workout equipment that you know you'll use. For example, if you like running or hiking, consider getting a treadmill with an adjustable incline. If you prefer cycling, consider purchasing a stationary bike.
It's important to remember to discuss any medical concerns with your healthcare provider before starting a fitness routine. This information provided here is not intended to be a substitute for medical advice.
Tip adapted from Real Simple10
Riddle of The Week
You can rearrange the letters in insatiable to make another ten-letter word that starts with the letter b. What is this ten-letter word?
Last week’s riddle: It has avenues, rivers, and parks, but no grass, water, or asphalt. What is it? Answer: A map.
Photo of The Week
Hassan II Mosque in Casablanca, Morocco
Footnotes and Sources
2. CNBC.com, January 9, 2024.
3. CNBC.com, January 10, 2024.
4. The Wall Street Journal, January 11, 2024.
5. The Wall Street Journal, January 11, 2024.
6. The Wall Street Journal, January 11, 2024.
7. The Wall Street Journal, January 11, 2024.
8. The Wall Street Journal, January 11, 2024.
9. IRS.gov, May 1, 2023.
10. RealSimple.com, December 12, 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 2024 FMG Suite.
Weekly Market Insights: Ending The Week On A Positive Note
January 16, 2024