January 20, 2019 by Joe Bert, CFP®

Tax Deductions Affected By New Tax Law

January 19, 2019 by Joe Bert, CFP®

Financial Planning Lessons From The Government Shutdown

January 14, 2019 by Joe Bert, CFP®

MARKET WATCH: JANUARY 14, 2019

The Markets (as of market close January 11, 2019)

For the third straight week, stocks posted positive returns by the close of last week. Each of the indexes listed here gained at least 2.40%, with the small caps of the Russell 2000 zooming up by almost 5.0%. Energy shares had a strong week as oil prices rallied. Investors were also encouraged by rhetoric from Federal Reserve chairman Jerome Powell, who advised that the economy remained on solid ground and that the Fed would be sensitive to changes in the economy when determining whether to raise interest rates.

Oil prices climbed last week, closing at $51.67 per barrel by late Friday, up from the prior week’s closing price of $48.26 per barrel. The price of gold (COMEX) increased last week, closing at $1,288.50 by last Friday evening, up from the prior week’s price of $1,286.70. The national average retail regular gasoline price was $2.237 per gallon on January 7, 2019, $0.029 lower than the prior week’s price and $0.285 less than a year ago.

Market/Index	2018 Close	Prior Week	As of 1/11	Weekly Change	YTD Change
DJIA	23327.46	23433.16	23995.95	2.40%	2.87%
Nasdaq	6635.28	6738.86	6971.48	3.45%	5.07%
S&P 500	2506.85	2531.94	2596.26	2.54%	3.57%
Russell 2000	1348.56	1380.75	1447.38	4.83%	7.33%
Global Dow	2736.74	2772.41	2847.60	2.71%	4.05%
Fed. Funds target rate	2.25%-2.50%	2.25%-2.50%	2.25%-2.50%	0 bps	0 bps
10-year Treasuries	2.68%	2.66%	2.69%	3 bps	1 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

Consumer prices fell slightly in December, dropping 0.1%, after being unchanged in November. Over the last 12 months ended in December, the index has increased 1.9% — the first time the 12-month change has been under 2.0% since August 2017. Driving the December decrease was a 7.5% decline in the gasoline index. The index less food and energy increased 0.2% in December, the same increase as in October and November. Over the last 12 months, prices excluding food and energy have risen 2.2%.
Though a bit dated, the latest figures from the Job Openings and Labor Turnover Summary revealed that the number of job openings fell to 6.9 million on the last business day of November. There were 7.1 million job openings in October. The number of hires fell from 5.9 million in October to 5.7 million in November. Total separations also fell from 5.6 million in October to 5.5 million in November. Over the 12 months ended in November, hires totaled 68.0 million and separations totaled 65.6 million, yielding a net employment gain of 2.4 million.
According to the December 2018 Non-Manufacturing ISM® Report On Business®, the services sector slowed last month. The non-manufacturing index dropped 3.1 percentage points lower in December from November. Business activity fell 5.3 percentage points, employment receded 2.1 percentage points, and prices plummeted 6.7 percentage points. New orders posted a marginal 0.2 percentage point uptick in December, while exports jumped 2.0 percentage points. Respondents remained concerned about tariffs and available employment resources.
For the week ended January 5, 2019, there were 216,000 new claims for unemployment insurance, a decrease of 17,000 from the previous week’s level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended December 29, 2018. The advance number of those receiving unemployment insurance benefits during the week ended December 29 was 1,722,000, a decrease of 28,000 from the prior week’s level, which was revised up by 10,000.

Eye on the Week Ahead

More reports relating to consumer prices and inflation are on tap for this week. The Federal Reserve’s report on industrial production and capacity utilization for December will be worth examining, particularly following purchasing managers’ indication last week that manufacturing is slowing.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

January 12, 2019 by Joe Bert, CFP®

On The Money Program | January 12, 2019

January 7, 2019 by Joe Bert, CFP®

MARKET WATCH: JANUARY 7. 2019

The Markets (as of market close January 4, 2019)

Stocks posted solid gains by the close of the first week of the new year. A favorable jobs report helped push the benchmark indexes listed here higher last Friday, as stocks recovered from an ominous start at the beginning of the week. Helping ease investors’ fears of a slowing economy, Fed Chair Jerome Powell indicated economic data is pointing to a good start to the economy in 2019, but, more importantly, the Federal Reserve is amenable to making adjustments if necessary. The small caps of the Russell 2000 led the way last week, followed by the Nasdaq and the Global Dow. The large caps of the S&P 500 and the Dow also advanced by more than 1.50%.

Oil prices advanced slightly last week, closing at $48.26 per barrel by late Friday, up from the prior week’s closing price of $45.07 per barrel. The price of gold (COMEX) increased last week, closing at $1,286.70 by last Friday evening, up from the prior week’s price of $1,283.10. The national average retail regular gasoline price was $2.266 per gallon on December 31, 2018, $0.055 lower than the prior week’s price and $0.254 less than a year ago.

Market/Index	2018 Close	Prior Week	As of 1/4	Weekly Change	YTD Change
DJIA	23327.46	23062.40	23433.16	1.61%	0.45%
Nasdaq	6635.28	6584.52	6738.86	2.34%	1.56%
S&P 500	2506.85	2485.74	2531.94	1.86%	1.00%
Russell 2000	1348.56	1337.92	1380.75	3.20%	2.39%
Global Dow	2736.74	2718.19	2772.41	1.99%	1.30%
Fed. Funds target rate	2.25%-2.50%	2.25%-2.50%	2.25%-2.50%	0 bps	0 bps
10-year Treasuries	2.68%	2.71%	2.66%	-5 bps	-2 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

Due to the government shutdown, some economic reports are unavailable. If and when information is released, it will be included in the corresponding Market Week report.
There were 312,000 new jobs added in December, but the unemployment rate rose 0.2 percentage point to 3.9%. Job gains occurred in health care, food services and drinking places, construction, manufacturing, and retail trade. The number of unemployed persons increased by 276,000 to 6.3 million. Comparatively, the unemployment rate was 4.1% and the number of unemployed was 6.6 million in December 2017. The labor force participation rate was 63.1%, and the employment-population ratio was 60.6% for the third consecutive month. The average workweek increased by 0.1 hour to 34.5 hours in December. Average hourly earnings rose $0.11 to $27.48. Over the year, average hourly earnings have increased by $0.84, or 3.2%.
Purchasing managers noted a drop-off in confidence among manufacturers in December, with the degree of optimism dipping to the lowest point since October 2016. The IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 53.8 in December, down from 55.3 in November. Overall, manufacturers’ optimism and production fell to their lowest respective levels in 15 months. Job creation sputtered to an 18-month low.
The report from the Institute for Supply Management® followed the Markit results. The December PMI® registered 54.1%, a decrease of 5.2 percentage points from the November reading of 59.3%. The New Orders Index registered 51.1%, a decrease of 11 percentage points from the November reading of 62.1%. The Production Index registered 54.3%, 6.3 percentage point decrease compared to the November reading of 60.6%. The Employment Index registered 56.2%, a decrease of 2.2 percentage points from the November reading of 58.4%.
For the week ended December 29, there were 231,000 new claims for unemployment insurance, an increase of 10,000 from the previous week’s level, which was revised up by 5,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended December 22. The advance number of those receiving unemployment insurance benefits during the week ended December 22 was 1,740,000, an increase of 32,000 from the prior week’s level, which was revised up by 7,000.

Eye on the Week Ahead

Can the market sustain its push upward, or was last week merely the result of investors taking advantage of lower stock prices? If the government shutdown ends, we should see many economic reports come out this week, including the latest releases on international trade, the federal budget deficit, and the Consumer Price Index.

January 7, 2019 by Joe Bert, CFP®

Stock Market Madness

January 5, 2019 by Joe Bert, CFP®

On The Money Program | January 5, 2019

December 31, 2018 by Joe Bert, CFP®

MARKET WATCH: DECEMBER 31, 2018

The Markets (as of market close December 28, 2018)

A crazy week of market swings finally closed with each of the benchmark indexes listed here posting gains for the first time in three weeks. Christmas Eve (Monday) saw stocks drop precipitously heading into the holiday, surely putting a damper on festivities for some investors. The Dow fell over 19% from its peak early Wednesday, only to surge by the end of the day. By week’s end, each of the benchmarks listed here posted gains led by the Nasdaq, which climbed almost 4.0%, followed by the Russell 2000, the S&P 500, the Dow, and the Global Dow. While the bond market was generally quiet, long-term bonds saw yields reach a nine-month low as bond prices soared. Despite last week’s positive returns, it is unlikely that the indexes listed here will gain enough on New Year’s Eve to close the year ahead of last year’s ending values.

Oil prices remained relatively low last week, closing at $45.07 per barrel by late Friday, down slightly from the prior week’s closing price of $45.42 per barrel. The price of gold (COMEX) increased last week, closing at $1,283.10 by last Friday evening, up from the prior week’s price of $1,259.10. The national average retail regular gasoline price was $2.321 per gallon on December 24, 2018, $0.048 lower than the prior week’s price and $0.151 less than a year ago.

Market/Index	2017 Close	Prior Week	As of 12/28	Weekly Change	YTD Change
DJIA	24719.22	22445.37	23062.40	2.75%	-6.70%
Nasdaq	6903.39	6332.99	6584.52	3.97%	-4.62%
S&P 500	2673.61	2416.62	2485.74	2.86%	-7.03%
Russell 2000	1535.51	1292.09	1337.92	3.55%	-12.87%
Global Dow	3085.41	2676.76	2718.19	1.55%	-11.90%
Fed. Funds target rate	1.25%-1.50%	2.25%-2.50%	2.25%-2.50%	0 bps	100 bps
10-year Treasuries	2.41%	2.78%	2.71%	-7 bps	30 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

Due to the government shutdown, most economic reports are unavailable. If and when this information becomes available, it will be included in the corresponding Market Week report.
For the week ended December 22, there were 216,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised up by 3,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended December 15. The advance number of those receiving unemployment insurance benefits during the week ended December 15 was 1,701,000, a decrease of 4,000 from the prior week’s level, which was revised up by 17,000.

Eye on the Week Ahead

Hopefully, the first week of the new year will bring some encouragement to investors who have seen stocks drop precipitously over the past several weeks. On the economic front, the employment figures for December are out at the end of the week. New hirings have dipped some over the last few months, although wages have increased overall.

December 29, 2018 by Joe Bert, CFP®

On The Money Program | December 29, 2018

December 24, 2018 by Joe Bert, CFP®

Market Watch: December 24, 2018

The Markets (as of market close December 21, 2018)

The tech-heavy Nasdaq had been the only benchmark index to have exceeded its 2017 closing value. That is no longer the case, as an 8.36% drop last week put the Nasdaq more than 8.0% below its value at the end of last year and firmly in bear market territory. Investors saw the potential of a federal government shutdown and an implied warning from the Federal Reserve that the economy may be slowing as reason to seek shelter from stocks. Besides the Nasdaq, each of the other benchmark indexes listed here suffered large weekly losses, led by the small caps of the Russell 2000, followed by the large caps of the S&P 500 and the Dow. The Global Dow fell “only” 4.86% and is over 13% below its 2017 year-end value.

Oil prices plummeted last week, closing at $45.42 per barrel by late Friday, down from the prior week’s closing price of $51.16 per barrel. The price of gold (COMEX) increased last week, closing at $1,259.10 by last Friday evening, up from the prior week’s price of $1,242.20. The national average retail regular gasoline price was $2.369 per gallon on December 17, 2018, $0.052 lower than the prior week’s price and $0.081 less than a year ago.

Market/Index	2017 Close	Prior Week	As of 12/21	Weekly Change	YTD Change
DJIA	24719.22	24100.51	22445.37	-6.87%	-9.20%
Nasdaq	6903.39	6910.66	6332.99	-8.36%	-8.26%
S&P 500	2673.61	2599.95	2416.62	-7.05%	-9.61%
Russell 2000	1535.51	1410.81	1292.09	-8.42%	-15.85%
Global Dow	3085.41	2813.48	2676.76	-4.86%	-13.24%
Fed. Funds target rate	1.25%-1.50%	2.00%-2.25%	2.25%-2.50%	25 bps	100 bps
10-year Treasuries	2.41%	2.89%	2.78%	-11 bps	37 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

The final estimate for the third-quarter gross domestic product showed the economy grew at an annual rate of 3.4%. This estimate is 0.1 percentage point below the second estimate, as personal consumption expenditures and exports were revised down and private inventory investment was revised up. The GDP increased 4.2% in the second quarter. Gross domestic income (the sum of all income earned and costs incurred while producing goods and services) increased 4.3% in the third quarter, compared with an increase of only 0.9% in the second quarter. Growth in consumer spending, which accounts for about two-thirds of the total economic output, grew at a rate of 3.5% in the latest estimate, down from the prior estimate of 3.6%. Also of note, exports, which add to the GDP, fell 4.9% in this estimate, compared to a decline of 4.4% in the prior estimate. Imports, which subtract from the GDP, rose 9.3%.
Citing strength in the labor market and rising economic activity, the Federal Reserve raised the target range for the federal funds rate 25 basis points to 2.25%-2.50%. This is the highest range since the spring of 2008. The Fed also modified its projection for future rate adjustments, now calling for two rate hikes in 2019, down from three such hikes as previously contemplated.
Consumer spending increased 0.4% in November following an 0.8% rise in October. Both pre-tax and after-tax personal income rose 0.2% in November after increasing 0.5% the prior month. Prices for consumer goods and services advanced a marginal 0.1% in November and are up 1.8% from November 2017 — below the Fed’s 2.0% inflation target rate.
New orders for manufactured durable goods increased 0.8% in November following a 4.3% advance in October. Transportation equipment, up three of the last four months, drove the increase, jumping up 2.9%. Excluding transportation, new orders decreased 0.3% for November.
In a sign that the housing market finally may be picking up steam, November saw a 5.0% increase in building permits over October’s total. Housing starts (3.2%) and housing completions (0.4%) also improved last month over October.
Sales of existing homes increased for the second month in a row after expanding by 1.9% in November over the prior month’s mark. Existing home sales are still off by 7.0% from a year ago. The median existing-home price in November was $257,700, up 4.2% from November 2017 ($247,200). The median existing-home price in October was $255,400. However, total inventory decreased to 1.74 million, down from 1.85 million existing homes available for sale in October. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.3 last month and up from 3.5 months a year ago.
For the week ended December 15, there were 214,000 new claims for unemployment insurance, an increase of 8,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended December 8. The advance number of those receiving unemployment insurance benefits during the week ended December 8 was 1,688,000, an increase of 27,000 from the prior week’s level.

Eye on the Week Ahead

The Christmas holiday week is a slow one for economic reports. The November report on the goods trade deficit is expected to show an expansion of the difference between the value of imports and exports. Also, the November figures on new home sales are out this week. No significant change is expected in what has been a mundane housing market for much of the year.