Uncategorized

The Week on Wall Street
Stock prices pushed higher last week, as investors remained hyper-focused on any new developments with the U.S. trade negotiations with China.

The Dow Jones Industrial Average picked up 0.91%, while the Standard & Poor’s 500 rose 0.62%. The Nasdaq Composite index gained 0.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 2.28%.[1][2][3]

Trade Winds
For nearly two years, investors’ moods have seemed to swing with each twist in the ongoing trade saga between the U.S. and China. Last week was no different.

On Tuesday, stock prices fell sharply on concerns that U.S.-China trade tensions had escalated. The White House announced the addition of 28 new Chinese companies to its list of firms that are banned from doing business in the U.S. Later in the day, White House officials confirmed that they had implemented travel bans on selected Chinese officials.[4][5]

But prices bounced back Thursday and surged higher Friday on White House reports that suggested the trade talks between the two countries were “going really well.” Near the close Friday, the White House confirmed that the U.S. has come to a “very substantial phase one deal” with China.[6][7]

Quarterly Earnings
Investors may start to get a better glimpse into third-quarter earnings this week, as more than 150 companies are expected to report on their operations.[8]

As “earnings season” get underway, some attention may shift from the U.S.-China trade negotiations and toward company reports.
What’s Next
Some U.S. financial markets will be open, and some will be closed, on Monday, October 14, in observance of the federal holiday Columbus Day. The U.S. bonds markets and most banks will be closed. But the New York Stock Exchange and the NASDAQ will be open for regular hours.

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

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

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

[4] www.yahoo.com/news/1-u-imposes-visa-restrictions-195007427.html

[5] finance.yahoo.com/news/u-bans-travel-chinese-officials-185734111.html

[6] www.cnbc.com/2019/10/10/trump-says-china-trade-talks-are-going-very-well.html?&qsearchterm=really%20well%20trump

[7] www.cnbc.com/2019/10/11/trump-says-us-has-come-to-a-substantial-phase-one-deal-with-china.html

[8] www.zacks.com/earnings/earnings-calendar

Unfortunately, getting your identity stolen and personal information compromised is all too common. Thieves steal other people’s identity for many reasons, including filing a fraudulent tax return (to claim the refund), committing credit card fraud, or trying to get a job. Here are a few things to know when protecting yourself against identity thieves:
• The IRS will never contact you via email or phone to request personal information. If you receive a scam email claiming to be the IRS, report it to phishing@irs.gov.

• People can steal your identity by stealing your wallet or purse, receiving information they need over the phone or email, finding your personal information in the trash, or accessing information you provide to an unsecured website (only ever enter credit card information on secure websites that start with “https://”).

• Your identity may have been stolen if a letter from the IRS indicates that more than one tax return was filed for you.
Read more tips here.

* 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[13]

[13] www.irs.gov/newsroom/top-tips-every-taxpayer-should-know-about-identity-theft

The Week on Wall Street
The fourth quarter started with a mixed week for equities. The Dow Jones Industrial Average lost 0.92% for the week; the S&P 500, 0.33%. In contrast, the Nasdaq Composite improved 0.54%. Overseas stocks pulled back: the MSCI EAFE index dipped 2.60%.[1][2]
The Institute for Supply Management’s Manufacturing Purchasing Manager Index fell to 47.8 in September, its lowest level in ten years. Traders worried that the number reflected weakening business confidence. ISM’s latest Non-Manufacturing PMI also declined, but the 52.6 reading indicated growth in the service sector last month.[3][4]

The Department of Labor said that employers added 136,000 net new workers in September. Unemployment was at 3.5%, a level last seen in December 1969. The U-6 jobless rate, which counts both the unemployed and underemployed, fell to a 19-year low of 6.9%. Monthly job creation has averaged 161,000 so far in 2019, down from 223,000 in 2018. This may reflect the challenge companies face trying to fill job openings in an economy with so little unemployment.[5]

The next earnings season is just ahead. Before it begins, let’s take a look back at the third quarter.

S&P 500 Ends Quarter Higher
In a statistical coincidence, the Dow Jones Industrial Average and S&P 500 gained the same percentage in the quarter: 1.19%. The Dow settled at 26,916.83 on September 30; the S&P, at 2,976.74. Both indices registered their third straight quarterly advance. The Nasdaq Composite went sideways for Q3, ending the quarter 0.09% lower at 7,999.34.[6][7]

U.S.-China Trade Disagreement Continued
On August 1, the U.S. announced tariffs on an additional $300 billion of Chinese products – some would be effective September 1; others, effective by December 15. Four days later, China devalued its main currency, the yuan, to a level unseen in 11 years – a move that immediately sent U.S. stocks 3% lower. (Devaluing the yuan made Chinese goods cheaper for buyers paying for them in dollars, effectively offsetting the impact of U.S. tariffs.) As September concluded, however, word came that trade representatives from both nations would resume talks on October 10.[8][9][10]

The Fed Made a Move
The Federal Reserve lowered the country’s short-term interest rate by a quarter-point on September 18, to a range of 1.75% to 2.00%. Federal Reserve Chairman Jerome Powell, speaking to the media after the decision, called the outlook for the U.S. economy “favorable.” At the same time, he noted “a lot of uncertainty” surrounding the near-term economy and the Fed’s monetary policy views.[11]

What’s Next
Trade representatives from the U.S. and China return to the negotiating table on Thursday; their meeting is scheduled to conclude on Friday. Any news stemming from their talks could quickly affect equity markets, both here and abroad.
[1] www.wsj.com/market-data

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

[3] finance.yahoo.com/news/ism-manufacturing-101500823.html

[4] www.investing.com/news/economic-indicators/newsbreak-ism-services-index-tumbles-to-3year-low-1991459

[5] www.usatoday.com/story/money/2019/10/04/september-jobs-report-economy-added-135-000-145-000-were-forecast/3859017002/

[6] www.barrons.com/articles/the-dow-rose-97-points-because-we-still-want-to-invest-money-in-china-51569879471

[7] www.marketwatch.com/investing/index/comp/historical

[8] www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide

[9] www.bloomberg.com/news/articles/2019-08-04/asia-stocks-set-to-drop-with-trade-back-in-focus-markets-wrap

[10] www.cnbc.com/2019/09/30/us-stocks-investors-monitor-us-china-trade-impeachment-inquiry.html

[11] www.reuters.com/article/us-usa-fed/fed-cuts-rates-on-7-3-vote-gives-mixed-signals-on-next-move-idUSKBN1W32H7

There are many tax deductions and credits that taxpayers should be aware of, but what if you can’t reap the full benefits of a deduction in the given filing year? Some deductions and credits may be eligible to roll over into future years. These tax carryovers could save you money on your tax return.

Some deductions or credits may not be fully used in one tax year and are eligible to be carried over into future years, including:
• When you have a net operating loss

• When your total expense for a permitted deduction exceeds the amount you’re allowed to deduct in a given year

• When a credit you qualify for exceeds the amount of tax you owe in a year

• Adoption tax credits

• Foreign tax credits

• Credits for energy efficiency
Track these (or have your software do it), so you don’t forget them from one year to the next.

* 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 Credit Karma[10]

[10] www.creditkarma.com/tax/i/tax-carry-forward/

The Week on Wall Street
Stocks retreated last week. Traders worried that the formal impeachment inquiry of President Donald Trump might distract White House officials from their pursuit of a trade deal with China, and shift the focus of Congress away from consideration of the United States-Mexico-Canada Agreement (USMCA). Also, news broke Friday that the White House was considering restricting levels of U.S. investment in Chinese firms.
The Dow Jones Industrial Average lost less than the Nasdaq Composite and S&P 500. Blue chips declined 0.43% week-over-week, while the S&P fell 1.01% and the Nasdaq dipped 2.19%. The MSCI EAFE index, tracking developed overseas stock markets, lost 0.89%.[1][2][3]

Incomes Grow, Spending Slows
Data released Friday by the Bureau of Economic Analysis showed household incomes rising 0.4% in August. Consumer spending improved just 0.1%, however; that was the smallest personal spending advance in six months.

Another BEA report noted that “real” consumer spending (that is, consumer spending adjusted for inflation) rose 4.6% during the second quarter.[4][5]

A Slip in Consumer Confidence
The Conference Board’s Consumer Confidence Index fell to 125.1 for September. That compares to a reading of 134.2 in August. Lynn Franco, the CB’s director of economic indicators, wrote that “the escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing.”

In contrast, the University of Michigan’s Consumer Sentiment Index ended September at 93.2, an improvement from a final August mark of 89.8.[6][7]

What’s Ahead
On October 10, the Social Security Administration is scheduled to announce the 2020 cost of living adjustment (COLA) for Social Security retirement benefits. Earlier this month, Bureau of Labor Statistics yearly inflation data pointed to a possible 2020 COLA in the range of 1.6%-1.7%.[8]

[1] www.cnn.com/2019/09/27/investing/dow-stock-market-today-oil/index.html

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

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

[4] www.marketwatch.com/story/consumer-spending-barely-rises-in-august-as-americans-save-more-2019-09-27

[5] www.investing.com/economic-calendar

[6] www.conference-board.org/data/consumerconfidence.cfm

[7] www.marketwatch.com/story/consumer-sentiment-rebounds-in-september-but-americans-more-anxious-2019-09-27

[8] finance.yahoo.com/news/3-events-could-push-social-100600194.html

The IRS started the Volunteer Income Tax Assistance program to provide free tax advice, preparation, return filing help, and other assistance to military members and their families. This also includes specific tax advice for military members, such as combat zone tax benefits, special extensions, and other special rules. The VITA has convenient locations on and off base and even has offices overseas.

These offerings are just one way the IRS is striving to make tax information available to all. They also offer other free assistance programs to taxpayers who qualify, including the elderly, through their Tax Counseling for the Elderly (TCE) program.

If you or someone you know wants to take advantage of this service, find the location closest to you with the IRS’s location search tool. Simply enter your zip code and how far you want to travel.

* 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[9]

[9] www.irs.gov/newsroom/free-tax-help-available-for-the-military

The Week on Wall Street
Investors reacted to two major news items last week, one far more of a surprise than the other. The Federal Reserve did indeed make a rate cut, matching Wall Street expectations. Drone strikes on two of the world’s largest oil fields brought a shock to the global oil market.
At Friday’s closing bell, stocks wound up with weekly losses after news broke that Chinese trade officials were heading home from the U.S. sooner than planned. The S&P 500 retreated 0.51% week-over-week; the Dow Jones Industrial Average lost 1.05%, and the Nasdaq Composite dipped 0.72%. In developed foreign markets, shares tracked by the MSCI EAFE index fell 0.31%.[1][2][3]

Another Quarter-Point Cut
Wednesday, the Federal Open Market Committee voted 7-3 to lower the benchmark interest rate by another 0.25%, to a range of 1.75% to 2.00%.

While traders looked for signs of future guidance on monetary policy, little emerged from the latest Fed policy statement and Fed chair Jerome Powell’s subsequent press conference. The updated dot-plot forecast showed that seven Fed officials anticipated at least one more cut before 2020, while ten did not.[4]

Oil Prices Jump
As last week began, crude oil futures spiked in response to an attack that interrupted roughly 5% of the world’s oil production. The value of West Texas Intermediate crude, the U.S. benchmark, spiked 14.7% in a day, or $8.05 to $62.90 at Monday’s close.

This was oil’s biggest one-day leap since September 2008. Prices came down from there: Friday, WTI crude settled at $58.48.[5][6]

Final Thought
So, what day last week saw the biggest loss or gain for stocks? Not Monday, when the market absorbed news of the Saudi oil field strike. Not Wednesday, when the Fed rate cut occurred. Instead, it was Friday, when the S&P 500 lost only 0.49%. It just goes to show that stocks may ride through seemingly market-moving events with little daily change.[7]

[1] www.marketwatch.com/story/dow-skids-to-friday-lows-amid-reports-that-chinas-delegation-has-canceled-a-tariff-related-visit-2019-09-20

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

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

[4] www.reuters.com/article/us-usa-fed/fed-cuts-rates-on-7-3-vote-gives-mixed-signals-on-next-move-idUSKBN1W32H7

[5] www.marketwatch.com/story/us-oils-10-surge-after-saudi-attack-puts-it-on-track-for-the-biggest-daily-gain-in-312-years-2019-09-15

[6] money.cnn.com/data/commodities/index.html

[7] money.cnn.com/data/markets/sandp/

In an effort to protect heritage sites and other history, the IRS implemented their rehabilitation tax credit. This credit offers an incentive to renovate and restore old or historic buildings. Here are some of the highlights to help you determine if your building is eligible:
• The credit may pay for 20% of the qualifying costs of rehabilitating a historic building.

• This 20% needs to be spread out over 5 years.

• The credit doesn’t apply to the purchase of the building.

• Taxpayers use Form 3468, Investment Credit to claim the rehabilitation tax credit.
Although this credit might not move the needle a significant amount for a lot of situations, it’s still a step in the right direction in trying to preserve our country’s history. These historic buildings are beautiful, and with a little care, they can be restored to their former glory. Whether your office is in a historic building or you just enjoy learning about your area’s past, this tax credit helps give significance to this nostalgia.

* 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[9]
[9] www.irs.gov/newsroom/heres-what-historic-building-owners-should-know-about-the-rehabilitation-tax-credit

The Week on Wall Street
Stocks edged toward all-time peaks during a relatively calm week marked by easing trade tensions. Friday marked the eighth straight daily advance for the Dow Jones Industrial Average.[1]
Small-cap shares, as tracked by the Russell 2000 index, rose 4.85% in five days. The S&P 500 improved 0.96% for the week, while the Dow and Nasdaq Composite respectively advanced 1.57% and 0.91%. Foreign shares added 1.22%, according to the MSCI EAFE index.[2][3][4]

A Delay for Planned October Tariff Hikes
Existing tariffs on $250 billion of Chinese imports were slated to rise from 25% to 30% on October 1, but the White House decided Thursday to postpone the increase until October 15, in a “gesture of good will” honoring a request from Chinese Vice Premier Liu He.

Bloomberg reported last week that some White House officials were considering an “interim” trade agreement that could pause some import taxes on Chinese products, so long as China agrees to buy specific U.S. crops and address intellectual property concerns.[5]

More Risk Appetite
Last week’s conciliatory gestures between the U.S. and China influenced the bond market. By Friday’s close, the 10-year Treasury yield had climbed to 1.90%, up 0.35% for the week after a big selloff. (A rise in bond yields generally reflects a drop in bond prices.)[6]

Inflation Pressure Increases
Yearly core inflation reached a 13-month peak of 2.4% in August, according to the federal government’s Consumer Price Index. Core inflation (which excludes volatile food and fuel costs) has now increased for three straight months.[7]

What’s Next
This week, traders await the Federal Reserve’s latest policy announcement. Whether the Fed chooses to cut short-term interest rates, any guidance in the statement will be highly scrutinized, as Wall Street is eager to discern any hints about whether the Fed is prepared to continue cutting short-term rates.
[1] www.cnbc.com/2019/09/13/stock-markets-dow-sp-500-close-to-all-time-highs-on-wall-street.html

[2] money.cnn.com/data/markets/russell/

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

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

[5] finance.yahoo.com/news/stock-market-news-september-12-2019-121421711.html

[6] www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

[7] www.investing.com/economic-calendar/core-cpi-736

All this back-to-school season excitement might make you want to consider furthering your own education, and the IRS might be able to help. Tax credits, deductions, and savings plans can help taxpayers with their expenses for higher education.
• Tax credits help with the cost of higher education by reducing the amount of income tax you may have to pay. The two tax credits available are the American Opportunity Tax Credit and the Lifetime Learning Credit.

• Some education savings plans allow your earnings to grow, tax free, until the money is taken out; some allow the deduction to be tax free; some do both.

• You may be able to deduct higher-education costs, such as tuition, student loan interest, and qualified education expenses, from your tax return.
If you’ve always dreamt about going back to school, whether to further your career or just learn something new, knowing your potential tax benefits may be able to save you money.

* 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[9]

[9] www.irs.gov/newsroom/tax-benefits-for-education-information-center