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Stocks Descend from Recent Peaks –
July 22, 2019

The Week on Wall Street

Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve’s upcoming policy meeting.

For the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost 0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the week-over-week performance of the MSCI EAFE index, were down 0.79%.1https://www.wsj.com/market-data,2https://quotes.wsj.com/index/XX/990300/historical-prices

Households Bought More Last Month

Retail sales were up 0.4% in June, according to the Department of Commerce. Consumer purchases account for more than two-thirds of America’s gross domestic product, and data like this may rebut some assertions that the economy is losing steam.3https://www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html

Traders still expect the Federal Reserve to make a rate cut at the end of this month, even with low unemployment, solid consumer spending, and stocks near record peaks. Ordinarily, the Fed lowers interest rates to try to stimulate business growth and investment when the economy lags. After ten years without a recession, its new challenge is to make appropriate moves to ward off such a slowdown.4https://www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html

Will Wall Street’s Expectations Be Met?

Thursday, Federal Reserve Bank of New York President John Williams noted that Fed policymakers could proactively adjust interest rates and take “preventative measures” to ward off a potential slowdown. A New York Fed spokesperson later said that Williams’ comments were “academic” and did not concern “potential policy actions.” Still, Fed Vice President Richard Clarida made similar comments last week, expressing the view that Fed officials “don’t have to wait until things get bad to have a dramatic series of rate cuts.”5https://www.thestreet.com/markets/stocks-climb-rate-cut-hopes-microsoft-earnings-15025435

Two other Fed officials – Esther George and Eric Rosengren – have publicly stated that they are not in favor of a cut.6https://www.cnbc.com/2019/07/19/feds-rosengren-not-on-board-for-rate-cut-i-think-we-should-wait.html

What’s Next

About 25% of S&P 500 companies report earnings this week. In addition, the federal government will present its first snapshot of the economy’s second-quarter performance.  

Robert Roman
CEO, Managing Director
MGO | Wealth Advisors

THE WEEK AHEAD:

KEY ECONOMIC DATA

Tuesday: June existing home sales figures appear from the National Association of Realtors.

Wednesday: The Census Bureau presents its June report on new home buying.

Friday: The Bureau of Economic Analysis releases its initial estimate of Q2 economic growth.

Source: Econoday / MarketWatch Calendar, July 19, 2019

The Econoday and MarketWatch economic calendars list 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.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Celanese (CE), Halliburton (HAL), TD Ameritrade (AMTD)

Tuesday: Coca-Cola (KO), Texas Instruments (TXN), Visa (V)

Wednesday: AT&T (T), Boeing (BA), Facebook (FB), PayPal (PYPL)

Thursday: Alphabet (GOOGL), Amazon (AMZN), Anheuser-Busch (BUD), Intel (INTC), Starbucks (SBUX)

Friday: AbbVie (ABBV), Colgate-Palmolive (CL), McDonalds (MCD)

Source: Zacks, July 19, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. 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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“A vacation is having nothing to do and all day to do it in.”

– Robert Orben

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Short-Term Rentals, Long-Term Income Tax Deductions

If you have a short-term vacation rental, you may be bringing in some extra income this summer season. By following a few easy tips, you can reduce your income taxes and keep more of what you make (some of which might go into a savings account for a vacation of your own!). Here are some helpful tips that short-term rental owners should consider:

  • You don’t have to pay income tax on what you earn from your short-term rental, but only if you don’t rent it out for more than 14 days throughout the year, and also, if you live in it as your primary residence for at least 14 days out of the year.
  • Keep thorough records as well as separate business and personal expenses. You may be able to deduct all ordinary and necessary expenses to operate the rental home.
  • If you rent out a room in your home rather than the entire property, you may still be able to deduct a portion of the mortgage interest and property taxes of the property. But you still need to delineate between personal and business use of the residence.

Renting out an extra property or an extra space in your house is a great way to make some extra cash, and the tax laws may work in your favor.

* 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 TurboTax7https://turbotax.intuit.com/tax-tips/rental-property/10-tax-tips-for-airbnb-homeaway-vrbo-vacation-rentals/L8CEWgLSP

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How to Pack for the Perfect Golf Vacation

Planning a golf trip this summer? What (and how) you pack will make a big difference in how well your trip goes. While you can’t always control the course or the conditions, you can control what you have handy on your trip. Here are some packing tips to consider for that ultimate golf vacation:

  • Make sure you have the perfect travel bag to hold your clubs. Our favorites are Sun Mountain and Club Glove.
  • Be ready for any weather with a waterproof golf bag, waterproof gloves, a rain jacket, and your favorite, moisture-wicking clothing. And don’t forget an extra pair of shoes!
  • Have plenty of things to help you recover during your trip, including foam rollers, pressure point balls, and back massagers. Those 36-hole days will wear you out if you don’t properly rest and recharge.

A golf vacation is every golf enthusiast’s dream, so make sure you’re prepared for your adventure with these tips.

Tip adapted from Golf.com8https://www.golf.com/courses-and-travel/2017/04/28/how-pack-golf-trip

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Rest, Relaxation, and Healthy Nutrition

    Between the junk food at airports, room service, and the love of lounging, vacations can be where healthy habits meet their match. But you can make healthy choices while on vacation and still have fun. Here are some tips on how to stay healthy, even on the road:

    • Before heading to the airport, pack your own snack box with fruits, veggies, nuts, lean proteins, and healthy bars. That way, you won’t be tempted by the chips and soda while you wait for your flight.
    • Get plenty of sleep. Just like at home, it’s really important to get a good night’s sleep while traveling. Sleep helps your body reset for the next day and will help you maintain your weight.
    • Hydrate often. Our bodies don’t function as well when we’re thirsty, so make sure you always bring your reusable water bottle with you on vacation. And no, margaritas on the beach don’t count as hydration.
    • Take your vitamins to make sure you feel your best. A daily pill holder can help you remember to take them, even while traveling.

    There’s no reason why you have to sacrifice all your hard work and healthy habits while on vacation. If anything, continuing a healthy lifestyle while traveling will help you have even more fun!

    Tip adapted from Travel & Leisure9https://www.travelandleisure.com/slideshows/wellness-health-celebrity-tips-vacation?slide=378785#378785

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    Be an Environmentally Friendly Traveler

    There are lots of ways to live green on the go. Here are some of our favorite ways to be an environmentally friendly traveler on your next vacation:

    • Use public transport whenever you can in order to reduce carbon emissions. Plus, public transportation is a great way to explore a new city.
    • Travel by land instead of air when possible. One five-hour flight increases your carbon footprint by one ton! Take a train, bus, car, or boat to see more during your trip.
    • If you’re staying in a hotel, avoid getting clean towels or sheets every single day. You want to pamper yourself, but by reusing your towels and sheets for a day or two, you will help save water and energy.
    • Avoid bottled water when possible. Bring a reusable water bottle along with you, and use water filters to refill your bottles with safe water.

    Never take a vacation from green living with these easy tips while traveling!

    Tip adapted from World Nomads10https://www.worldnomads.com/responsible-travel/make-a-difference/planet/top-10-tips-for-environmentally-friendly-travel

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    The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

    The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

    The 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 stocks of technology companies and growth companies.

    The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.

    The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.

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