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The Week on Wall Street
Stock benchmarks were little changed for much of last week, but a rally occurred Friday after news broke that the U.S. and China could be closing in on the first phase of a new trade pact.
At Friday’s close, the Dow Jones Industrial Average crossed the 28,000 level. The Dow rose 1.17% for the week, outgaining the S&P 500 (which advanced 0.89%) and the Nasdaq Composite (which added 0.77%). The MSCI EAFE index, representing developed overseas stock markets, fell 0.77%.[1][2]

Will There Be a Trade Breakthrough?
Friday, Secretary of Commerce Wilbur Ross told the media that “in all likelihood,” a phase-one trade deal between China and the U.S. would presently happen, stating that the talks were “down to the last details.” Thursday evening, White House economic adviser Larry Kudlow expressed similar optimism, noting that negotiations were “coming down to the short strokes.”

That said, the Wall Street Journal reported last week that President Trump is not yet committed to signing a phase-one trade deal. Secretary Ross noted that such an agreement would be “relatively limited in scope.”[3][4]

Consumers Boost Their Buying
Retail sales advanced 0.3% in October, according to the Department of Commerce. That surpassed the 0.2% gain forecast by economists polled by MarketWatch. Even so, households bought fewer big-ticket items than they did in September.[5]

[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices
[3] www.bloomberg.com/news/articles/2019-11-15/kudlow-says-phase-one-china-deal-down-to-the-short-strokes-k2zgbx0k
[4] www.foxbusiness.com/politics/u-s-china-trade-deal-near-but-trump-not-signing-yet
[5] www.marketwatch.com/story/us-retail-sales-rebound-in-october-but-a-small-group-of-stores-reap-most-of-the-gains-2019-11-15

The thought of filing taxes might be overwhelming to some, but the IRS has many resources available to help make it easier. These include their Frequently Asked Questions page, some basic tools about PTIN requirements, contact information, disaster relief resources, and more. In addition, they also make it easy to access some of their most-popular publications, including:

• Publication 5307, Tax Reform Basics for Individuals and Families

• Circular 230, Regulations Governing Practice Before the Internal Revenue Service

• Publication 4557, Safeguarding Taxpayer Data

• Publication 5293, Data Security Resource Guide for Tax Professionals

If you have questions before, during, or after filing your tax return, the IRS is happy to help. You can also reach out to enrolled agents and find out more information about what EAs are and how you can become one.

* 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.gov[7]

[7] www.irs.gov/newsroom/irsgov-has-many-resources-for-tax-preparers

The Week on Wall Street
Domestic and international stocks rose last week. Risk appetite outweighed concerns about the state of U.S.-China trade discussions.

The Dow Jones Industrial Average, Nasdaq Composite, S&P 500, and MSCI EAFE all ended the week with gains. Blue chips led the way, as the Dow added 1.22%. The Nasdaq improved 1.06%; the S&P, 0.85%. The EAFE, tracking developed stock markets away from North America, was up 0.76%. The Dow recorded its third straight weekly gain; the S&P, its fifth. [1][2][3]

Will Tariffs Phase Out or Remain?
Thursday, a spokesman for China’s commerce ministry said that U.S. and Chinese trade representatives had “agreed to remove” existing tariffs in “phases,” while working toward a new trade deal.

On Friday morning, President Trump told the media that he had not agreed to any such condition. President Trump and Chinese President Xi Jinping are still expected to sign off on “phase one” of a new bilateral trade agreement.[4]

Service Sector Activity Picks Up
A closely watched index of U.S. business activity posted an October gain. The Institute for Supply Management’s Purchasing Managers Index for non-manufacturing firms rose nearly two points last month to 54.7. ISM also noted an October increase for new orders.

As most U.S. companies provide services rather than manufacture products, this news is encouraging and suggests more momentum in that sector.[5]

Final Thought
Monday is Veterans Day; the stock market will be open, but the bond market, plus all federal government offices, will be closed.

[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices
[3] www.marketwatch.com/story/stock-futures-bounce-around-as-wall-street-weighs-china-us-tariff-rollback-talk-2019-11-08
[4] www.cnbc.com/2019/11/08/trump-says-he-has-not-agreed-to-roll-back-tariffs-on-china-after-week-of-trade-optimism.html
[5] www.briefing.com/Investor/Calendars/Economic/Releases/napmserv.htm

In today’s age of online shopping, online banking, and email databases, it’s more important than ever to be safe online. The IRS shares some of their top tips on how to protect your data:

• Update Your Security Software – Most computers come with a built-in security software in their operating system, and it’s important to always keep your computer up to date to make sure it’s running properly. You can also purchase security software from external companies. Just make sure to research the company first to make sure they’re not a scam.

• Only Provide Data to “https://” Sites – Earlier this year, Google released an update requiring any sites that gather data, such as credit card information, to be a secure site. This means that their website will start with “https://” instead of “http://.” This update helps keep your data safe.

• Be Cautious When Using Public Wireless Networks – Working in a coffee shop with free Wi-Fi is convenient, but these wireless networks aren’t always secure. Be careful about what information you share while connected to these free wireless networks, especially if they don’t require a password.

* 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.gov[8]

[8] www.irs.gov/newsroom/seven-tips-to-protect-your-computer-online

The Week on Wall Street
A better-than-forecast jobs report prompted a stock market rally Friday, two days after traders witnessed another interest rate cut by the Federal Reserve.

Both the S&P 500 and Nasdaq Composite ended the week at historic peaks, while the Dow Jones Industrial Average settled less than 12 points under its all-time record close. The Nasdaq rose 1.74% for the week; the S&P gained 1.47%. The Dow added 1.44%. MSCI’s EAFE benchmark, which measures developed stock market performance outside the U.S. and Canada, improved 0.58%.[1][2][3]
Economy Adds 128,000 Jobs in October
This net increase far surpassed the gain of 85,000 projected by a Bloomberg poll of economists. These job gains occurred even as last month’s General Motors strike impacted hiring in the manufacturing sector.

Unemployment rose slightly to 3.6% in October, an effect of more people entering the job market. Likewise, the U-6 rate, counting both unemployed and underemployed, Americans ticked up to 7.0%.[4]

The Fed’s Latest Interest Rate Decision
Last week, the central bank made its third quarter-point rate cut since July, leaving the target range for the federal funds rate at 1.50-1.75%.

Something was missing from the latest Fed policy statement. Since June, a passage had noted that the Fed was ready to “act as appropriate to sustain the expansion.” In the latest statement, that language disappeared. At a press conference Wednesday, Fed Chair Jerome Powell commented that Fed officials “see the current stance of monetary policy as likely to remain appropriate.”[5]

Where Trade Talks with China Stand
There were further negotiations between U.S. and Chinese officials Friday, and China’s commerce ministry announced that both sides had “reached consensus on principles” integral to the first phase of a new trade pact. U.S. Trade Representative Robert Lighthizer noted only that the latest round of conversation had brought “progress in a variety of areas.”[6]
[1] www.reuters.com/article/us-usa-stocks/sp-500-nasdaq-set-records-on-jobs-data-trade-headway-idUSKBN1XB3ZD

[2] www.wsj.com/market-data

[3] quotes.wsj.com/index/XX/990300/historical-prices

[4] time.com/5716189/us-adds-128000-jobs-october-2019/

[5] www.cnbc.com/2019/10/30/fed-decision-interest-rates-cut.html

[6] www.foxbusiness.com/markets/us-china-trade-talks-reach-consensus-on-principles?cmpid=prn_investors

There are many good reasons to file your tax return online, including the fact that it’s:
• Accurate and complete – Filing your tax return digitally is the most-accurate, complete way to file. This means that it’s processed faster, and you get your tax return in your pocket sooner.

• Safe and secure – Software companies and accountants that have the ability to eFile tax returns have met strict security guidelines set forth by the IRS. When you eFile, you can receive notifications from the IRS ensuring that everything was filed correctly.

• Faster refunds – Compared to paper returns, eFiled tax returns are usually processed faster. In addition, you can choose direct deposit and have your refund deposited directly into your bank account.

• It’s easy and free – You can eFile on your own through IRS Free File, the IRS free tax preparation and eFiling service. You can also eFile your taxes using online platforms, many of which offer a free level of service as well as a premium one if you have more-complex filing needs.
* 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.gov[7]

{7] www.irs.gov/newsroom/five-good-reasons-to-e-file-your-tax-return

The Week on Wall Street
The S&P 500 came within 0.1% of a record close Friday. Stocks were lifted last week by positive news on U.S.-China trade negotiations, plus earnings announcements.

The Nasdaq Composite posted the largest weekly gain of the three major U.S. stock indices. It rose 1.90%. Last week also brought gains of 0.70% for the Dow Jones Industrial Average and 1.22% for the S&P. The MSCI EAFE, a benchmark for developed stock markets outside the U.S., rose 1.14%.[1][2][3]
Another Hint of Progress in Trade Talks
Friday, the Office of the U.S. Trade Representative stated that parts of a new trade deal with China were near completion. No specifics were given as of Friday’s close, but the USTR noted that negotiators had “made headway” on key issues.

Analysts think both sides may cancel certain tariffs as part of a deal. President Trump has said that he would like to sign a new trade accord with China’s President, Xi Jinping, next month.[4]

A Gain for Consumer Sentiment
Rising to a final October mark of 95.5, the University of Michigan’s Consumer Sentiment Index advanced 2.3 points month-over-month. During August and September, the index’s level varied from 89.8 to 93.2.[5]

What’s Next
The Federal Reserve meets this week. Will it make another interest rate cut? And if it does, could that be the last rate cut for a while? Traders will study the language of the statement and listen carefully to Fed chair Jerome Powell’s Wednesday press conference for clues.

[1] www.marketwatch.com/story/us-stock-futures-step-cautiously-higher-setting-investors-up-for-fresh-run-at-records-2019-10-25

[2] www.wsj.com/market-data

[3] quotes.wsj.com/index/XX/990300/historical-prices

[4] reuters.com/article/us-usa-trade-china/u-s-china-close-to-finalizing-parts-of-phase-1-trade-pact-ustr-idUSKBN1X40EF

[5] investing.com/economic-calendar/michigan-consumer-sentiment-320

We recently talked about how important it is to check your withholding status, especially if you’ve experienced a life change, like buying a home, getting married or divorced, or growing your family. The IRS makes it easy to check your withholding status online with their Withholding Calculator.

The Withholding Calculator can help you determine whether you should submit a new W-4 to your employer, and you can also use the results to adjust your income tax withholding. If you have a more complex tax situation, you may need to use Publication 505, Tax Withholding and Estimated Tax form. This form can help you determine your self-employment tax, the alternative minimum tax, or tax on unearned income by dependents. Publication 505 can also help if you receive non-wage income, including capital gains, royalties, dividends, and more.

It’s important to check your withholding to make sure you are deducting the right amount of taxes. These handy tools can help.

* 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.gov[7]

[7] www.irs.gov/newsroom/there-are-two-ways-taxpayers-can-check-their-withholding-on-irsgov

The Week on Wall Street
Earnings helped give the Nasdaq Composite and S&P 500 a slight lift last week, offsetting investor disappointment over the small scope of the preliminary U.S.-China trade deal reached on October 11. Blue chips took a small weekly loss.
The Nasdaq and S&P respectively gained 0.40% and 0.54% on the week. The Dow Jones Industrial Average retreated just 0.17%. Outdoing these three benchmarks, the MSCI EAFE index tracking stocks in developed overseas markets rose 1.35%.[1][2]

The Early Earnings Picture
According to stock market analytics firm FactSet, 15% of S&P 500 companies had reported results through Friday’s close. Of those companies, 84% announced that net profits topping projections, and 64% said that revenues had exceeded forecasts.

One big question is whether overall earnings for S&P 500 firms will show year-over-year growth. There was no year-over-year earnings gain evident in either Q1 or Q2.[3]

Retail Sales Declined Last Month
Shoppers scaled back their purchases in September. The Census Bureau announced a 0.3% dip for retail sales, the first decrease in seven months.

Auto sales can influence this number, and car and truck buying fell 0.9% last month. A fall pickup in that category may help encourage another monthly advance.[4]

What’s Next
If you buy your own health coverage, note that the open enrollment period for 2020 health insurance plans begins on November 1 in most states. The open enrollment window closes on December 15.[5]

[1] www.wsj.com/market-data

[2] quotes.wsj.com/index/XX/990300/historical-prices

[3] insight.factset.com/sp-500-earnings-season-update-october-18-2019

[4] www.reuters.com/article/us-usa-economy-retail/weak-u-s-retail-sales-cast-gloom-over-economy-idUSKBN1WV1NG

[5] www.businessinsider.com/what-is-open-enrollment-your-opportunity-to-buy-health-insurance

Every year, the IRS recommends doing what they call a “Paycheck Checkup.” This includes checking your withholding status to make sure enough taxes are being taken out of your paycheck. You should do a Paycheck Checkup in the beginning of the year, but it can be done in any season.

Check your withholding status if you have:
• Gotten married or divorced
• Had or adopted a child
• Bought a house
• Retired
• Filed for bankruptcy
• Got a new job or lost a job

The IRS also recommends checking on any streams of taxable income that are not subject to withholding, such as interest, dividends, capital gains, self-employment income, or IRA distributions. You should also check your withholding if you’ve experienced changes to your medical expenses, taxes, charitable gifts, education credits, dependent care expenses, and more. These life changes might affect your deductions or tax credits. These Paycheck Checkups will help make sure you’re in a good place when it’s time to file taxes.

* 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.gov[10]

[10] www.irs.gov/newsroom/all-taxpayers-should-check-their-withholding-asap