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Stocks managed small gains as investors wrestled with concerns over economic growth prospects and a rise in COVID-19 infections.
The Dow Jones Industrial Average picked up 0.24%, while the Standard & Poor’s 500 gained 0.40%. The Nasdaq Composite index added 0.43%. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.78%.1,2,3
A Choppy Week
In a truncated week of trading, stock market action was turbulent and indecisive. A mixed start saw cyclical stocks sell off amid concerns of slowing economic growth, while growth stocks advanced in response to falling yields.
After strengthening mid-week with the release of the FOMC meeting minutes, stocks skidded when reopening fears resurfaced Thursday on a new wave of global COVID-19 infections and Japan’s emergency declaration that reintroduced lockdown protocols. This led to a broad-based sell-off, with financials, home builders, and technology hit hard. A drop in bond yields added to the deteriorating sentiment.
Bond yields rebounded on Friday, setting the stage for a strong comeback for stocks, with the three major indices closing at new all-time highs.4
Attention Turns to Bonds
Since reaching a 2021 high of 1.74% in March, the 10-year Treasury yield has been in a slow, steady decline, closing at 1.37% on Friday.5
One explanation may be that reopening sentiment has turned more cautious as the Delta variant of COVID-19 spreads globally. Another view is that overseas investors are buying Treasuries, effectively lowering yields.
Perhaps it’s abating inflation concerns, or simply excess liquidity finding its way into bonds. Whatever the message, the yield narrative has changed from just a few months ago when it was believed that the 10-year treasury was heading to two percent.5
This Week: Key Economic Data
Tuesday: Consumer Price Index (CPI).
Thursday: Jobless Claims. Industrial Production.
Friday: Retail Sales.
Source: Econoday, July 9, 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: JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo & Co. (WF), Pepsico, Inc. (PEP).
Wednesday: Bank of America (BAC), Citigroup, Inc. (C), Delta Airlines (DAL), Blackrock, Inc. (BLK).
Thursday: UnitedHealth Group (UNH), Morgan Stanley (MS), Taiwan Semiconductor (TSM).
Friday: Charles Schwab (SCHW), Kansas City Southern (KSU).
Source: Zacks, July 9, 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.
Welcome to SFG’s_2021_July/August Newsletter We hope you’re enjoying your summer and getting to enjoy the outdoors! Now that summer 2021 is in full swing and we are oh so close to seeing the light at the end of the pandemic tunnel. We wanted to take this opportunity to thank each and everyone of you for your continued trust, patience, and support during the past year.
We are happy to report that our team is fully vaccinated, and we are happily welcoming in person client visits, as well as continuing to offer virtual and telephone visits if that is the method you prefer.
In this issue we discuss backyard summer projects, 6 ways to reconnect with your grandkids post-COVID and much more. Happy reading!
If you’re already an SFG client, share the wealth of knowledge and tell your friends and family about all the great work we do. We love being introduced!
“One does not fall ‘in’ or ‘out’ of love. One grows in love.”
Your Plans This Summer May Be Eligible for Itemized Deductions
If you have big plans this summer to sell or buy a home, donate some old items, or hit the casino, some of these activities may be able to be itemized as deductions. Here are some examples:
If you are refinancing your home this summer, you may be able to deduct a part of your mortgage interest. There are some limits to these deductions, though. According to the IRS, the deduction is limited to interest paid on a loan secured by the taxpayer’s main home or second home. When you refinance, you must use the loan to buy, build, or substantially improve your main home or second home.
If you are buying a new home this summer, you can deduct mortgage insurance if you pay on a total of $750,000 in qualifying debt for a first and second home or $375,000 when married filing separately.
The summer is a great time to go through your things and donate old clothes, furniture, or home goods you no longer need. Even better, these donations may qualify for a tax deduction if you itemize the deductions and show proof of the donations.
In addition to donating items, you may also be able to deduct mileage on your personal vehicle for services done for a qualified charity.
Lastly, if you enjoy hitting the casino, you may be able to itemize and deduct gambling losses up to the amount of gambling winnings.
* 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.gov6
Zero-Waste Skincare: Fight Back Against Plastic
Single-use bathroom products, including shampoo, conditioner, and body wash, all contribute to the tons and tons of plastic we throw away every day. Often, these bottles are difficult or impossible to recycle.
Next time you’re shopping for your next beauty product, consider choosing a zero-waste option. These options use biodegradable packaging and aim to reduce landfill trash as much as possible. The idea isn’t to live like a “sustainability saint,” but instead do a small part to help the future of our planet.
Some of the most popular zero-waste beauty product brands include:
- Ethique: Their bar shampoos and conditioners reduce the need for a big, plastic container.
- Etee: They ship in a cardboard box with cellulose packing tape.
- Bathing Culture: A carbon-neutral company, the products come in 100% recycled and reprocessed bottles from California.
- Meow Meow Tweet: They make cardboard stick deodorants, cream deodorants, and plastic-free soaps.
These are just a few of the ways beauty products are moving toward creating zero-waste products.
Tip adapted from Sustainable Jungle7
It can be as round as a dishpan, as deep as a tub, and still the oceans couldn’t fill it up. What is it?
Last week’s riddle: What 11-letter word must always be spelled incorrectly? Answer: Incorrectly.
Sunset in Maui, Hawaii.
Share the Wealth of Knowledge. We love being introduced!
1. The Wall Street Journal, July 9, 2021
2. The Wall Street Journal, July 9, 2021
3. The Wall Street Journal, July 9, 2021
4. CNBC, July 9, 2021
5. U.S Department of Treasury, July 9, 2021
6. IRS.gov, November 9, 2020
7. Sustainablejungle.com, 2020
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.
Copyright 2021 FMG Suite.