Black Friday Brings Gains – November 27, 2017
Last week was a relatively quiet time in the domestic markets. We did not receive a tremendous amount of economic data, and trading halted Thursday for the Thanksgiving holiday. Nonetheless, all 3 of the major domestic indexes experienced sizable gains in only 4 trading days.1https://www.cnbc.com/2017/11/24/us-stocks-black-friday-retail-amazon-holidays.html By Friday, the S&P 500 added 0.91% and closed above 2,600 for the first time in its history.2https://www.cnbc.com/2017/11/24/us-stocks-black-friday-retail-amazon-holidays.html http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US The Dow was also up 0.86%, and the NASDAQ gained 1.57%.3https://www.cnbc.com/2017/11/24/us-stocks-black-friday-retail-amazon-holidays.html http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US International stocks in the MSCI EAFE had a 5-day trading week and grew by 1.85%.4https://www.msci.com/end-of-day-data-search
A variety of factors contributed to this performance—from growth in the tech sector to increasing crude oil prices. But a specific event also helped push stocks higher: Black Friday.5https://www.cnbc.com/2017/11/24/us-stocks-black-friday-retail-amazon-holidays.html
The Black Friday Effect
What happened on Black Friday this year?
In the U.S., Black Friday is big business. The day after Thanksgiving is typically the year’s biggest shopping day and jump-starts the holiday season with enticing deals.6https://www.thebalance.com/what-is-black-friday-3305710 The financial markets even close early because trading activity is traditionally so slow.7https://www.morningstar.com/news/market-watch/TDJNMW_20171124223/update-black-friday-which-markets-are-closing-early.html
This year, a combination of low unemployment and healthy consumer confidence may help the retail industry.8https://www.bloomberg.com/news/articles/2017-11-24/with-expectations-low-retailers-declare-victory-on-black-friday Many retailers saw lines forming outside their locations on Thanksgiving, while digital shopping also picked up. Shoppers spent $1.52 billion online by 5 p.m. ET on Thursday. And the next morning they made $640 million in online purchases by 10 a.m.—18.4% higher than at that time last year.9https://www.cnbc.com/2017/11/24/black-friday-frenzy-as-throngs-of-shoppers-line-up-for-deals-in-us.html https://www.cnbc.com/2017/11/24/online-spending-up-18-percent-from-last-black-friday-morning-adobe.html
Why does holiday shopping matter?
Black Friday may not have the same urgency it once did, as fewer people fight for deals in person.10https://www.bloomberg.com/news/articles/2017-11-24/with-expectations-low-retailers-declare-victory-on-black-friday Even without huge crowds at brick-and-mortar shops, many retailers declared the day a success—and posted stock gains on Friday.11https://www.cnbc.com/2017/11/24/black-friday-frenzy-as-throngs-of-shoppers-line-up-for-deals-in-us.html
Overall, industry experts predict holiday sales may grow by as much as 4.5% compared to last year.12https://www.cnbc.com/2017/11/24/black-friday-frenzy-as-throngs-of-shoppers-line-up-for-deals-in-us.html This growth matters because strong consumer spending is good for the economy. In fact, consumer spending accounts for more than two-thirds of gross domestic product. If spending is flat, so is economic growth.13https://www.thebalance.com/consumer-spending-trends-and-current-statistics-3305916 Thus, solid purchasing can help drive our economy to pick up speed.
We were pleased to see the markets experience a positive Black Friday effect, and we’ll continue to review this year’s spending data and stock performance. In the meantime, if you have any questions about where our economy stands or what lies ahead, please contact us.
Monday: New Home Sales
Tuesday: Consumer Confidence
Wednesday: GDP, Pending Home Sales Index
Thursday: Jobless Claims
Friday: Motor Vehicle Sales, PMI Manufacturing Index, ISM Mfg Index, Construction Spending
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the SPUSCIG. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
“You don’t learn to walk by following rules. You learn by doing, and by falling over.”
- 4 large eggs
- ¼ cup half-and-half or milk
- ½ teaspoon Kosher salt
- ¼ cup cilantro, finely chopped
- 1 cup Mexican cheese blend, shredded
- 1 cup goat cheese, crumbled
- 2 cups kale, thinly sliced
- 1 ½ cups tomatoes, chopped
- ½ cup corn
- 4 cups tortilla chips
- Whisk together eggs, cream, and salt. Add cilantro and both cheeses; continue whisking.
- Combine egg mixture with kale, tomatoes, corn, and tortilla chips in a large bowl. Toss gently together.
- Place mixture in a 2- to 2 ½-quart baking dish, and cover.
- Bake at 400ºF until cheese melts and egg sets, about 30–35 minutes.
- Remove lid to brown tops for last 5 minutes in oven.
Recipe adapted from Good Housekeeping14http://www.goodhousekeeping.com/food-recipes/a40389/tex-mex-tortilla-casserole-recipe/
Steps to Take If the IRS Sends a Letter
When the IRS needs to communicate with taxpayers about details with their taxes, it will most commonly send a letter in the mail. If you receive a letter from the IRS, you do not need to panic. Instead, here are some steps to take:
- Read everything thoroughly: Your letter will probably contain specific details and necessary actions. So be sure to read the whole letter.
- Reply only if requested: You typically do not need to respond to a letter unless the IRS asks you to provide information or make a payment. Further, avoid calling the IRS. Instead, follow the preferred outreach as detailed in the letter.
- Store the letter: Save any letters or notices that the IRS sends you along with your tax files for the year specified.
- Respond with discrepancies: Contact the IRS if you believe that the details in the letter are incorrect. To do so, mail the IRS a letter detailing the discrepancy.
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip adapted from IRS.gov15https://www.irs.gov/newsroom/individual-taxpayers-seven-things-to-do-when-an-irs-letter-arrives
Grip Down for Laser-Like Short Irons
Controlling distance is always crucial in golf. When you are nearly close enough to the pin to strike, mastering this control is essential. When using wedges or short irons, most pros will avoid a full swing, opting instead for 75–80% of their swing.
When in this setup, the best technique is to swing within yourself and take yards off your approach. To do so:
- Subtract 5 yards from your approach by choking down on the club, gripping halfway to the handle’s bottom.
- Subtract 10 yards from your approach by gripping the handle all the way down to the steel.
By choosing either of these techniques, you’ll be able to swing a longer club smoothly and with more control. To have more birdie chances, try this grip with all of your scoring clubs.
Tip adapted from Golf Magazine16http://www.golf.com/golf-instruction/2017/10/04/looking-laser-short-irons-grip-down
Foster Good Digestion
When left unchecked, digestive issues can create bloating, heartburn, and other uncomfortable symptoms. Fortunately, with some simple changes, you can keep digestion healthy and under control. Follow these tips:
- Eat more plant fiber: Fiber derived from plants will help your digestive tract and encourage regularity. When eating fiber, be sure to increase your water intake, which further aids the digestive process. Fiber-rich plant foods include (but aren’t limited to) vegetables, fruits, legumes, and whole grains.
- Chew thoroughly and in small bites: Rather than heaping spoonfuls, make each bite smaller as you eat. From there, chew thoroughly and slowly to aid digestion.
- Eat enough probiotics: The bacteria that live in our guts are important for healthy digestion. Be sure to eat foods rich in probiotics, such as yogurt and fermented foods.
Tips adapted from WebMD17https://www.webmd.com/digestive-disorders/good-digestion#1
Limit How Much Pesticides You Eat
Unless you specifically buy organic products, the food you’re eating could be laden with pesticides. The Environmental Working Group, a nonprofit and nonpartisan organization, analyzed food tests to identify how much pesticides are in our foods. They concluded that 70% of the samples from 48 standard produce types had one or more pesticide contaminations.
Some top findings from the study include the following:
- Residue from at least 1 pesticide was present on nearly all samples of strawberries, spinach, peaches, nectarines, cherries, and apples.
- Strawberries with the most contamination had at least 20 different pesticides.
- Spinach samples had twice as much pesticides residue by weight as any other tested crop.
To minimize how much pesticides your family consumes, aim to buy organic whenever possible.
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The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
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Past performance does not guarantee future results.
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