Stocks Gain. Questions Remain. – April 24, 2017
Domestic stocks posted losses on Friday, April 21, largely due to investor concerns about the French election.1http://www.cnbc.com/2017/04/21/us-markets.html Despite these daily losses, U.S. indexes broke their two-week losing streak, with the S&P 500 adding 0.85%, the Dow gaining 0.46%, and the NASDAQ increasing 1.82%. International stocks in the MSCI EAFE grew by 0.18%.2http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-UShttp://performance.morningstar.com/Performance/index-c/performance-return.action?t=!DJI®ion=usa&culture=en-UShttp://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCOhttps://www.msci.com/end-of-day-data-search
What Did We Learn Last Week?
- The French Election Is Concerning Investors
Uncertainty surrounding France’s presidential election contributed to investor caution last week.3https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap After Sunday’s ballot, National Front candidate Marine Le Pen will advance to the second round of voting on May 7, which decides the new president.4http://www.marketwatch.com/story/the-market-is-going-bonkers-over-frances-election-result-heres-how-in-5-wild-charts-2017-04-24 Le Pen has promised to remove France from the European Union if she wins, a choice that could affect markets and currencies.5http://www.cnbc.com/2017/04/21/us-markets.html
- Quarterly Earnings Reports Are Mostly Strong
By Friday morning, 95 companies in the S&P 500 had reported their quarterly earnings; 77% of them beat earnings-per-share estimates.6http://www.cnbc.com/2017/04/21/us-markets.html
- Existing Home Sales Jumped 4.4% in March
Sales of existing homes hit levels not seen since 2007, and median home prices are up 6.8% over a year ago.7http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/21/existing-home-sales-increased-4.4percent-in-march Supply levels remain tight, and demand is high, as 48% of homes sold last month were on the market for less than a month.8http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/21/existing-home-sales-increased-4.4percent-in-march
- Housing Starts Declined 6.8% in March
While the headline number for housing starts may seem pretty disappointing, it largely reflects the results of a return to typical March weather after unseasonably mild weather boosted starts in January and February.9http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/18/housing-starts-declined-6.8percent-in-march Overall, housing starts are up 9.2% over this time last year.10http://www.ftportfolios.com/Commentary/EconomicResearch/2017/4/18/housing-starts-declined-6.8percent-in-march
- The Consumer Price Index Missed Expectations
Declines in gas and other energy prices contributed to the U.S. Consumer Price Index (CPI) falling 0.3% in March—its first monthly decline in more than a year.11http://www.cnbc.com/2017/04/14/us-consumer-price-index-march-2017.html
- Tax-Plan Information May Be on the Horizon
On April 20, Treasury Secretary Steve Mnuchin indicated that tax reform remains important. The next day, President Trump said a tax plan should be coming this week.12https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap
- Oil Prices Dropped
Crude oil prices fell below $50 a barrel after losing 2.15% on Friday.13http://www.cnbc.com/2017/04/21/us-markets.html Investors are showing concern about whether output decreases by OPEC can balance out against increasing U.S. production and prevent oversupply.14https://www.bloomberg.com/news/articles/2017-04-20/asian-stocks-set-to-gain-as-yen-weakens-on-kuroda-markets-wrap
Moving into the last week of April, we will learn both first quarter GDP readings and gain further insight into consumer confidence and housing performance. On Friday, April 28, initial readings for first quarter GDP will help deepen our understanding of where the economy stands right now. Consensus estimates are at a soft 1.1% growth, even lower than last quarter’s 2.1% increase.15http://wsj-us.econoday.com/byshoweventfull.asp?fid=477650&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top After seeing this week’s low CPI numbers, combined with retail and inventory data, Barclays decreased its GDP estimate to only 0.8%.16http://www.cnbc.com/2017/04/14/us-consumer-price-index-march-2017.html
Last week provided a variety of data and perspectives that are continuing to reveal themselves. As momentum from the French presidential outcomes and our own economic growth unfolds, we will watch these developments closely. Meanwhile, we encourage you to continue a long-term focus on your goals, and we are here to discuss any questions you may have along the way.
CEO, Managing Director
MGO | Wealth Advisors
Tuesday: S&P CoreLogic Case-Shiller HPI, New Home Sales, Consumer Confidence
Wednesday: EIA Petroleum Status Report
Thursday: Durable Goods Orders, International Trade in Goods, Pending Home Sales Index
Friday: GDP, Employment Cost Index, Consumer Sentiment
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.
“Leave the beaten track behind occasionally and dive into the woods. Every time you do, you will be certain to find something you have never seen before.”
– Alexander Graham Bell
Details About Filing Your Taxes Late*
Sometimes, being able to file your taxes on time can just be plain impossible. Whatever reason may cause you to file late, you have obligations you need to address as a result of your delayed filing status. Here are some important tax items to keep in mind.
If you expect to receive a refund, will the IRS penalize you for filing late?
No. The IRS doesn’t penalize taxpayers who expect to receive a refund.
What fees will you get if you file late?
Late filers may be stuck with two penalties:
- Filing your taxes late: The minimum penalty for filing more than 60 days after the due date or extended due date is $205. You could receive a penalty of 5% of your unpaid taxes each month, and the maximum penalty is 25%. If you owe less than $205 in taxes, then you simply pay 100% of that tax.
- Paying your taxes late: You also receive more fees when you pay your taxes late. Generally, this monthly fee is 0.5% of your unpaid taxes and can grow to become as high as 25% of the unpaid taxes.
You also accrue interest on these fees; the longer you wait, the more fees you may pay. Other filing details may apply, so be sure to check out further guidance on the IRS website.
*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 advisor.
Tip courtesy of IRS.gov17https://www.irs.gov/uac/important-facts-about-filing-late-and-paying-penalties
Get Out of That Ugly Lie
We all have off-days where the ball just seems to land in the most difficult spots. If you’re stuck in a spot where you can’t address the ball in any normal way, you need to know how to creatively escape these bad breaks. The next time your ball lands next to a tree or bush, you can take specific steps with your stance and approach to help you save your shot.
- Stand with your back facing the target
When doing so, hold the club in your right hand (opposite for lefties), and point the club face at your target. You should have your club arm out to the side. This stance gives you the motion and space you need for swinging and hinging the club.
- Hinge the ball up and down by using your wrist
You’ll want to pop your ball onto the fairway. With this stance and motion, you have the speed you need to advance the ball back to the position you need for a standard shot.
While this move may seem risky, it can help you get back on track without taking an unplayable lie penalty or missing the shot and not being able to advance the ball. Instead, you’ll create an open path to the green for your next shot by making full contact with the ball and pitching it out to the clear.
Tip courtesy of Golf Tips Magazine18http://www.golftipsmag.com/instruction/strategy-troubleshooting/2-cool-trouble-shots/
Soothe Hand Pain From Arthritis
Living with arthritis can be a debilitating experience. When your cartilage wears away, you have no buffer left between your bones and your joints. If you have arthritic hands, you can experience swelling and inflammation that result in stiffness and pain, making moving and using your hands challenging. Here are a few tips to help you manage hand pain from arthritis.
- Make a fist: Hold your left hand up straight and slowly create a fist. You’ll want your thumb to be on the outside of your hand. Be sure not to squeeze your hand, as this can cause more pain. Once you create a fist, slowly open your hand and straighten your fingers. Do this exercise 10 times, and repeat with your right hand.
- Make an “o”: Point your left hand straight up and curve your fingers inward. Your goal is to make the shape of an “o” with your hand, where the fingertips touch. Once you create the “o” position, hold it for a few seconds before uncurling your fingers. You can do this for each hand, repeating multiple times a day.
- Do a finger lift: Lay your hand palm down and flat on a table. From this position, slowly lift each finger, starting with your thumb. Once you lift the finger up, hold it for one or two seconds, and then gently lower it. Repeat this exercise for each finger on your other hand.
Tip courtesy of Heathline19http://www.healthline.com/health/osteoarthritis/arthritis-hand-exercises#outlook10
Three Green Uses for Lemons
The acidity in lemon juice can serve a variety of cooking, cleaning, and gardening functions around your home. Due to its disinfectant qualities, you can swap your other chemical-based supplies for lemon juice, which provides an all-natural remedy for a variety of needs. Here are three ways to use lemons at home.
- Clean Cutting Boards
Cutting boards can host a variety of germs and smells that regular washing often won’t erase. Lemon, however, can help you cut any odors and bacteria. Wash your cutting boards as normal, then apply lemon juice and let it stand for 20-30 minutes. From there, rinse the juice off the board and allow it to dry.
- Lighten Your Nails
Our finger and toenails naturally yellow as we grow older. Fortunately, lemon can help reverse the effects. Simply combine 1 cup of water with juice from 1 lemon in a bowl, and soak your nails for a few minutes, rinsing when you’re done.
- Use for Laundry in Place of Bleach
Bleach is quite toxic—yet, it’s a common laundry cleaner to help us remove stains and keep whites bright. You can replace bleach by swapping it for lemon juice. To do so, add 1/2 cup of lemon juice to your laundry before you wash.
Tip courtesy of Care2.com20http://www.care2.com/greenliving/22-surprising-uses-for-lemons.html
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
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.
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.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
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.
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