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Weekly Market Insights: The Market Takes A Pause

Weekly Market Insights: The Market Takes A Pause

March 11, 2024

  Investors took profits as stocks fell for the week, following Fed Chair Jerome Powell's Congressional testimony.

Markets Wobble 

Stocks had a difficult start to the week, with the Dow, S&P 500, and Nasdaq each declining more than one percent on Tuesday alone. Big tech stocks were under pressure as investors appeared to take some profits.

However, markets regained much of their losses on Wednesday and Thursday, following the Fed Chair’s optimistic comments to the Senate Banking Committee, which boosted stocks. Chair Powell said that once the Fed was confident that inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. As a result, the S&P 500 and Nasdaq rallied, with the S&P hitting a record close.

On Friday, the employment news created some uncertainty. The economy added 275,000 jobs in February, exceeding the expected 198,000 jobs. However, wage growth slowed down, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.

Source: YCharts.com, March 9, 2024. Weekly performance is measured from Monday, March 4, to Friday, March 8.
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.

Fed Watch: Productivity

Productivity is a crucial factor that the Federal Reserve considers when deciding on the future course of monetary policy. When the economy produces more goods or services using fewer resources, it helps to promote economic growth and manage inflation risks. The productivity gains of 3.2 percent in the fourth quarter reported last week were mainly due to the post-pandemic repair of supply chains. However, some investors may be optimistic that artificial intelligence will play a more significant role in increasing productivity in the future.

This Week: Key Economic Data

Tuesday: Consumer Price Index. Treasury Statement.

Wednesday: EIA Petroleum Status Report.

Thursday: Jobless Claims. Producer Price Index. Retail Sales. Business Inventories.

Friday: Industrial Production. Import and Export Prices. Consumer Sentiment.


Source: Investors Business Daily - Econoday economic calendar; March 2, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Tuesday: Lennar Corporation (LEN, LEN.B)

Wednesday: Dollar Tree, Inc. (DLTR)

Thursday: Oracle Corporation (ORCL), Adobe Inc. (ADBE), DICK’S Sporting Goods, Inc. (DKS), Getty Images Holdings, Inc. (GETY)

Source: Zacks, March 2, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. 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. Companies may reschedule when they report earnings without notice.

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Food For Thought

"Expect the best. Prepare for the worst. Capitalize on what comes."

– Zig Ziglar

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Tax Tip 

Do You Know the Difference Between Taxable and Nontaxable Income?

All income that you earn is subject to taxation unless there are specific rules that state otherwise. The Internal Revenue Service (IRS) considers earned income, such as wages, as well as income earned through bartering, exchanging property, or services, to be taxable. Rental income, interest, dividends, and Social Security are also taxable forms of income.

Certain forms of income are only taxable if certain conditions are met. For instance, life insurance proceeds are generally not taxable for the beneficiary, unless they redeem a life insurance policy for cash. In this case, the amount they receive above the cost of the policy is taxable. State and local income tax refunds may also be taxable, and therefore must be reported on federal taxes.

However, there are some types of income that are not taxable, such as:

• Gifts and inheritances

• Child support payments

• Welfare benefits

• Damage awards for physical injury or sickness

• Cash rebates from a dealer or manufacturer for an item you buy

• Reimbursements for qualified adoption expenses

The cost and availability of life insurance can vary based on several factors, including age, health, and the type and amount of insurance purchased. Life insurance policies come with expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges, which can have income tax implications. Therefore, before implementing a strategy involving life insurance, it is important to determine whether you are insurable. Additionally, any guarantees associated with a policy are dependent on the issuing insurance company's ability to continue making claim payments.

Please note that this article is for informational purposes only and does not replace professional advice. As such, consult your tax, legal, and accounting professionals before modifying your tax strategy.

Tip adapted from IRS.gov8

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Healthy Living Tip

Choose to Make Your Plate “MyPlate”

The previous food pyramid was flawed, with its generalized daily serving recommendations and undefined portion sizes. This led to the U.S. Department of Agriculture redesigning it into a more user-friendly plate.

The concept behind the new design, called MyPlate, was revolutionary yet simple. Since we eat off a plate and not a pyramid, it made more sense to have a plate-based design. This new design made it easier to see portion sizes. Half the plate should consist of fruits and vegetables, while the other half should comprise grains and protein. Dairy or non-dairy alternatives should be served on the side.

Try following this method the next time you have a meal and see what adjustments you can make to create an even healthier plate.

Tip adapted from myplate.gov9

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Riddle Of The Week

The 22nd and 24th U.S. presidents had the same parents– yet the 22nd and 24th U.S. presidents were not siblings. Why?

  

Last week’s riddle: You can’t outrun it or hide from it. You only notice it when there is light, but it shows only darkness. What is it? Answer: Your shadow.



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Photo Of The Week

Forbidden City, Beijing, China

 

Footnotes and Sources

 

1. The Wall Street Journal, March 8, 2024

2. MarketWatch, March 6, 2024

3. CNBC, March 7, 2024

4. CNBC, March 8, 2024

5. The Wall Street Journal, March 8, 2024

6. The Wall Street Journal, March 7, 2024

7. Bureau of Labor Statistics, March 7, 2024

8. IRS.gov, November 02, 2023 

9. MyPlate.gov, December 18, 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.

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