Last week was marked by a flurry of corporate earnings reports, but the stock market saw a downturn due to concerns over cautious earnings guidance and the possibility of higher interest rates. Adding to the anxiety was the increasing amount of Treasury bonds and notes entering the market. The Dow Jones Industrial Average fell by 1.88%, while the Standard & Poor's 500 declined by 3.29%. The Nasdaq Composite index took the biggest hit, dropping by 4.48% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, also retreated, falling by 1.82%. |
 |
Source: YCharts, October 23, 2023 to October 27, 2023. |
October Slide ContinuesDespite mostly better-than-expected earnings results, stocks continued to fall last week. Though earnings surprises were generally positive, investors were troubled by declines in year-over-year net profit margins and tepid earnings guidance. Technology companies were hit particularly hard after mixed earnings results. On Thursday, economic data was released showing remarkable strength, with above-consensus forecast growth in third-quarter Gross Domestic Product (GDP) and September's durable goods orders, with only a minor uptick in initial jobless claims. These results have caused worries that the Fed may need to increase rates further, or at least maintain high rates for longer. Strong Economic DataThe first reading of economic growth in the third quarter was impressive, with GDP rising at an annualized rate of 4.9%. This growth rate was significantly higher than the 2.1% expansion in the prior quarter, and also surpassed the expectations of economic experts. The strong performance was powered by robust consumer spending and inventory build-up. In addition, durable goods orders rose by 4.7% in September, indicating the nation's continued economic strength. Although initial jobless claims increased slightly, the labor market remains healthy. This Week: Key Economic DataWednesday: FOMC Announcement. Automated Data Processing (ADP) Employment Report. Institute for Supply Managers’ (ISM) Manufacturing Index. Job Openings and Turnover Survey (JOLTS). Thursday: Factory Orders. Jobless Claims. Friday: Employment Situation. Institute for Supply Managers’ (ISM) Services Index. Source: Econoday, October 27, 2023 This Week: Companies Reporting EarningsMonday: McDonald’s Corporation (MCD), Arista Networks, Inc. (ANET) Tuesday: Pfizer, Inc. (PFE), Caterpillar, Inc. (CAT), Amgen, Inc. (AMGN), Marathon Petroleum Corporation (MPC) Wednesday: Advanced Micro Devices, Inc. (AMD), CVS Health Corporation (CVS), Qualcomm, Inc. (QCOM), PayPal Holdings, Inc. (PYPL), Humana, Inc. (HUM) Thursday: Apple, Inc. (AAPL), Starbucks Corporation (SBUX), Shopify, Inc. (SHOP), Eli Lilly and Company, Inc. (LLY), Duke Energy Corporation (DUK), Cigna Group (CI), ConocoPhillips (COP) Friday: Berkshire Hathaway, Inc. (BRK.A) Source: Zacks, October 27, 2023 |
____________________________________________________________________________________ Food For Thought
|
"Life can only be understood backwards, but it must be lived forwards." – Soren Kierkegaard |
____________________________________________________________________________________ Tax Tip
|
Rules for Home Office DeductionsIf you operate a business from your home, you can claim certain expenses as deductions on your tax return. However, there are a few important things you need to keep in mind to ensure you are claiming these deductions correctly:
*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.gov6 |
____________________________________________________________________________________ Healthy Living Tip
|
Being SMART about fitness goalsInstead of simply saying you’re going to “exercise more,” state a SMART exercise goal. SMART stands for: Specific: State the objective you wish to meet as specifically as possible: “I am going to commit to doing a full-body video workout several times a week.” Measurable: Identify quantifiable criteria to allow you to measure your progress: “I am going to do this workout three times a week for at least 30 minutes each time. I will track my progress in my workout journal.” Attainable: Your goal should be ambitious, but not impossible: “I am committing to three times a week, not seven times a week, because it is realistic and achievable for me with my current schedule.” Relevant: The goals you set need to align with your current circumstances and priorities: “I will do it to stay healthy and strong during these times and to feel less stressed.” Time-bound: Allocate a specific time period for completing your goal: “I will commit to this plan for a month. In 30 days, I will have had 12 workouts and will reassess my goal after that.” Tip adapted from Cleveland Clinic |
____________________________________________________________________________________ Weekly Riddle
|
What 3 numbers can you add together and get the same result as when you multiply them? (All 3 numbers are whole and positive, and none are double-digit.)
Last week’s riddle: How many cubic yards of dirt are in a hole 9' deep, 8' long, and 1' wide? Answer: None – there are no cubic yards of dirt within a hole. |
____________________________________________________________________________________ Photo Of The Week
|
 |
Two lion cubs in Mara National Reserve in Kenya, East Africa. |
|
Footnotes and Sources
2. The Wall Street Journal, October 27, 2023 3. The Wall Street Journal, October 27, 2023 4. CNBC, October 26, 2023 5. CNBC, October 26, 2023 6. IRS.gov, January 19, 2022 7. Cleveland Clinic, July 19, 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: Cautious Earnings Concerns Cause Stock Market Decline
