The Virus Becomes the Focus – March 2, 2020
The Week on Wall Street
Stocks fell sharply last week as Wall Street considered how the coronavirus outbreak might influence global business activity and household spending.
The selloff became a correction for the U.S. markets. The S&P 500 retreated 11.49%; the Dow Jones Industrial Average, 12.36%; the Nasdaq Composite, 10.54%. The MSCI EAFE, tracking developed stock markets outside North America, had fallen 6.75% week-over-week by Friday’s closing bell.
On Friday afternoon, Federal Reserve Chair Jerome Powell stated that central bank officials were willing to “use our tools and act as appropriate to support the economy.”1https://www.wsj.com/market-data,2https://quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices,3https://finance.yahoo.com/news/stock-market-news-live-updates-february-28-2020-234447699.html
Strong Consumer Confidence, Plus a Boost for Incomes
A trio of economic indicators pertaining to U.S. households looked solid last week. The Conference Board’s Consumer Confidence Index notched consecutive months above 130 for the first time since July-August 2019, posting a 130.7 February mark. The University of Michigan’s final February Consumer Sentiment Index came in at 101.0, ticking up from a preliminary 100.9.
Friday, the Department of Commerce reported that Americans increased their personal spending by 0.2% in January, while personal incomes improved 0.6%.4https://www.investing.com/economic-calendar/cb-consumer-confidence-48,5https://www.marketwatch.com/tools/calendars/economic
Buyers Have Flocked to New Homes
New home sales, according to the Census Bureau, improved 7.9% in January; the annualized pace of new home buying was the best seen since July 2007. Year-over-year, sales were up 18.6%. Housing market analysts cited a favorable economy and favorable weather as factors.6https://www.marketwatch.com/story/new-home-sales-soar-to-highest-level-since-2007-2020-02-26
Right now, there is no forecast for how the coronavirus outbreak may affect consumer demand or supply chains. The impact may not be known for months. But remember, your investment strategy should reflect your risk tolerance, time horizon, and goals, and it also should take into consideration periods of market volatility. Fear is driving decisions in the financial markets. Nobody would blame you if this uncertainty gave you a bit of anxiety as well.
CEO, Managing Director
MGO | Wealth Advisors
THE WEEK AHEAD:
KEY ECONOMIC DATA
Monday: The Institute for Supply Management’s latest factory activity index arrives.
Wednesday: Automatic Data Processing (ADP) publishes its February private payrolls report, and ISM’s index of February service-sector business activity appears.
Friday: The Department of Labor presents its February employment report.
Source: MarketWatch, February 28, 2020
The MarketWatch 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.
THE WEEK AHEAD:
COMPANIES REPORTING EARNINGS
Tuesday: AutoZone (AZO), Ross Stores (ROST), Target (TGT)
Thursday: Costco (COST), Kroger (KR)
Source: Zacks, February 28, 2020
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.
“Life is like riding a bicycle. To keep your balance, you must keep moving.”
– Albert Einstein
Rules for Home Office Deductions
If you have a business and work out of your home, the IRS allows you to deduct certain expenses on your return. Here are a few key things to keep in mind:
- The IRS requires you to use your office (or a part of your home) for “regular and exclusive use.” The part of the house should be your principal place of business, a place where you meet customers, or a separate structure dedicated to the business, like a garage or studio.
- To calculate your deduction, you can use two methods:
- The simplified option allows you to multiply the allowable square footage of your office by $5 up to a maximum of 300 square feet.
- The regular method allows you to specifically calculate the actual expenses like rent, mortgage interest, taxes, repairs, depreciation, and utilities you pay for the portion of your home used for the business. If you use only part of a space for your business, you’ll need to figure out the percentage devoted to business activities.
* 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.gov7https://www.irs.gov/forms-pubs/about-publication-587
This Grip – or That Grip?
Vardon. Interlocking. Baseball. These are the three common ways to grip a golf club, and of course, the Vardon has long been the leading choice. Your choice, however, may or may not correspond to that of the golfing mainstream.
The Vardon (overlap) grip allows the pinky finger of the hand that is lower on the club to overlap a bit of the upper hand. It works well for those who have long fingers and large or strong hands; less well, for others. The interlocking grip (used by Tiger Woods and Jack Nicklaus) locks the pinky finger of one hand into the other, where it would merely rest in a Vardon grip; golfers with smaller hands and fingers tend to favor it. The baseball grip is an unanchored 10-finger grip used by a handful of pros, and some seniors with flexibility or pain issues. You can hit a great shot with any of these grips; in choosing one over another, your comfort and control of the club matter most.
Tip adapted from Golf Distillery8https://www.golfdistillery.com/tweaks/setup/grip/grip-type/
Avoid Falling Back When Springing Forward
Getting used to the clocks shifting back and forth during the onset and conclusion of daylight saving time can throw many of us for a loop, not to mention that “springing forward” tends to be more difficult than “falling back.” It can take longer than we expect to adjust not only a one-hour time change, but also disruptions to our meal, fitness, work, social, and sleep routines. So, how can you combat this? Here are a few tips that may help.
- Gradually prepare for the time change the week before. Try to shift as much as your routine “forward” by 10 minutes each day.
- Manage your environmental lighting as much as possible. Try to get more light in the morning (to suppress your body’s natural sleep hormones) and as little in the evening as possible, especially approaching bedtime and during the night.
- Try to avoid napping, if possible. While it can be really tempting to “catch up” with your lost hour, until you’re adjusted, napping could slow your period of adapting to the new schedule.
Don’t let losing an hour slow you down. Taking some proactive measures may just help you ease into the transition better than you think.
Tip adapted from WebMD.com9https://www.webmd.com/sleep-disorders/features/coping-with-time-changes
Choosing Sustainable Seafood
Eating fish is a great choice to stay healthy, but the type of fish you eat can also have a significant impact on the environment.
One of the most sustainable fish you can choose is catfish. Catfish is all produced on eco-friendly farms and provides some of the biggest health benefits. Because catfish are all farmed, there’s no damage to the environment and their health is closely monitored.
Salmon can be a bit trickier, but there are still delicious and eco-friendly options out there. You should avoid farmed salmon because their living conditions aren’t strictly regulated. When you’re at the grocery store, wild-caught Alaskan salmon is the healthiest and most environmentally friendly option. Keep an eye out for these salmon species: Chinook, chum, coho, pink, and sockeye.
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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.
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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.
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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.
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