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A strong opening to the third-quarter earnings season sparked a late week, broad-based rally that helped stocks finish the week with solid gains.
The Dow Jones Industrial Average rose 1.58%, while the Standard & Poor’s 500 added 1.82%. The Nasdaq Composite index led, gaining 2.18% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was up 1.37%.1,2,3
Investor Optimism Returns
After beginning the week on a lackluster note, stocks turned higher on Wednesday as companies kicked off a new earnings season and details about the Fed’s taper plans emerged. Investor enthusiasm shifted into high gear the following day on positive economic data and earnings reports that exceeded investor expectations. Buying continued through Friday on fresh earnings surprises and a better-than-expected retail sales report.
The economic data allayed some concerns about inflationary pressures and economic deceleration, while early earnings results provided hope that companies had weathered the surge in summer Covid infections. Nevertheless, worries about how supply-chain disruption and higher prices may impact corporate earnings guidance haven’t gone away.
Let the Tapering Begin
Minutes from September’s Federal Open Market Committee released last week provided detail around the Fed’s plans to taper its $120 billion monthly bond purchase program. The Fed expects to reduce its purchases by $15 billion each month, beginning in mid-November/December and ending in June 2022.4
This tapering schedule is somewhat faster than what investors were anticipating, reflecting the Fed’s concern that inflation has been somewhat higher and more persistent than it had anticipated, with continuing supply-chain bottlenecks raising that risk level. Fed Chair Powell’s commitment to transparency and advanced signaling of policy changes appeared to have worked, as markets greeted the news calmly. In fact, stocks rallied strongly the following day as yields moved lower.
This Week: Key Economic Data
Monday: Industrial Production.
Tuesday: Housing Starts.
Thursday: Jobless Claims. Existing Home Sales. Index of Leading Economic Indicators.
Friday: PMI (Purchasing Managers’ Index) Composite Flash.
Source: Econoday, October 15, 2021
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: Netflix, Inc. (NFLX), Johnson & Johnson (JNJ), Procter & Gamble (PG), Kansas City Southern (KSU).
Wednesday: Tesla, Inc. (TSLA), International Business Machines (IBM), Verizon Communications (VZ), Abbott Laboratories (ABT), United Airlines (UAL), CSX Corporation (CSX).
Thursday: AT&T, Inc. (T), Intel Corporation (INTC), Snap, Inc. (SNAP), PPG Industries, Inc. (PPG), Southwest Airlines (LUV), American Airlines Group, Inc. (AAL), Union Pacific Corporation (UNP), Chipotle Mexican Grill, Inc. (CMG), Danaher Corporation (DHR), Dow, Inc. (DOW).
Friday: American Express Company (AXP), HCA Healthcare, Inc. (HCA), Schlumberger Limited (SLB).
Source: Zacks, October 15, 2021
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.
Do you have “Lazy Money” not earning anything?
You know that feeling of finding money in your couch cushions or your pants pocket? That instant satisfaction and surprise of feeling just a bit richer?
Well, prepare yourself for some good news – most of us have some excess cash that deserves some TLC. Perhaps it’s excess cash in the bank that’s not earning much of anything, an old 401(k) you keep meaning to check in on, or money you inherited that you haven’t gotten around to figuring out what to do with it.
Our wealth management team can help you review your Fiscal House to see where it makes the most sense to get this “lazy money” off the couch and back to work! All we need is 15-minutes (or less) of your time to share our ideas with you.
Click here to see our calendar and connect with us for a 15-minute call to discuss your lazy money strategy.
Does Your Portfolio Fit Your Retirement Lifestyle?
Most portfolios are constructed based on an individual’s investment objective, risk tolerance, and time horizon. However, as a retiree, how you choose to live in retirement may be an additional factor to consider when building your portfolio.
Click here to see our calendar and connect with us to discuss your retirement readiness!
Are You Paying Too Much in Taxes in Retirement?
For most of your working life, you’ve been in an accumulation phase — gathering and growing assets to be used to support you in your later years.
During retirement, however, you move to a different mindset as you transition into a distribution phase. Planning for the distribution phase includes a shift in perspective as you work toward preserving the assets you spent so many years building.
The key to preserving your assets is to develop a smart distribution strategy, one that accounts for many things — including the taxes you’ll owe in retirement. At SFG, we do more than just investment planning, our Stuart Retirement Review® process is comprehensive and tax planning is one of the 5-key areas we plan for!
Click here to see our calendar and connect with us for a 15-minute call with our team.
Let us help you develop your plan. Schedule to connect with us using one of the links above or give us a call at 301-345-1635.
“It is not the years in your life but the life in your years that counts.”
How to Research Tax-Exempt Organizations
The IRS makes it easy to check various organizations’ status to ensure that they are eligible to receive tax-deductible contributions. It provides a tool, Tax Exempt Organization Search, which allows users to research an organization quickly and easily, using information such as the organization’s name, Employee Identification Number, and location.
In addition to finding out whether an organization is eligible to receive tax-deductible donations, users also automatically can see whether any organizations’ tax-exempt status has been revoked (which happens if they don’t file their required Form 990-series for three years in a row), as well as access IRS determination letters that recognize the organization as tax-exempt, among other information.
* 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 IRS.gov5
What Are Alkaline Foods, and How Can They Benefit You?
Eating healthy foods and exercising are two of the main components of a healthy lifestyle, but maintaining a healthy pH level is another one. All foods are classified as acidic or alkaline, and knowing which ones are which can help you lose weight, reduce inflammation, and have more energy. Our kidneys are responsible for controlling our body’s pH levels, and focusing on an alkaline diet may help them do their job more efficiently.
Alkaline foods include legumes, vegetables, fruits, nuts, and natural fats. An alkaline-based diet focuses more on these foods and less on processed foods, dairy, grains, and alcohol, all of which are acidic.
While there’s still some debate over whether or not the alkaline diet is all it’s cracked up to be, you may enjoy more health benefits because the diet is rooted in eating whole, unprocessed foods.
Tip adapted from Healthline6
What nine-letter word begins and ends with the letter “S” and has only one vowel?
Last week’s riddle: What do these words have in common: pig, pony, bob, dove, and cotton? Answer: You can add the word “tail” to each of them and make a new word.
Share the Wealth of Knowledge. We love being introduced!
1. The Wall Street Journal, October 15, 2021
2. The Wall Street Journal, October 15, 2021
3. The Wall Street Journal, October 15, 2021
4. The Wall Street Journal, October 13, 2021
5. IRS.gov, February 26, 2021
6. healthline.com, June 24, 2021
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 Stuart Financial Group, J.W. Cole Advisors, Inc., 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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