Stocks Up as Shutdown Looms
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BI-WEEKLY UPDATE - JANUARY 22, 2018
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We're only a few weeks into 2018, and stocks are showing quite a strong performance so far. Last week, major domestic indexes posted gains yet again, with all 3 up at least 5% this year. By Friday, the S&P 500 had added another 0.86%, and both the Dow and NASDAQ were up 1.04%.[1] All 3 indexes hit new record highs at least once during the week.[2]
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In addition to the solid performance for U.S. equities, we're also experiencing synchronized global growth. European and Asian stocks grew last week, and China's growth data was more positive than expected.
[3] Overall, international stocks in the MSCI EAFE added a healthy 1.24% last week. Year to date, the MSCI is up 4.95%.
[4]
What happened last week?
Two key topics drove conversations: corporate earnings and a government shutdown.
1. Corporate Earnings
In the U.S., corporate earnings season dominated much of the economic news as reports continue to show companies doing well. For organizations that released their 4
th-quarter results, 79% beat earnings projections and 89% exceeded sales estimates.
[5]
2. Government Shutdown
The Federal government shut down on Saturday morning, January 20th, after the House and Senate failed to pass a bill to extend funding. This shutdown is the first since 2013.
[6]
How did these occurrences affect the markets?
While a potential shutdown loomed last week, overall, investors had little reaction to its possibility.
[
7] Volatility did increase last week as investors waited to see whether or not the House and Senate would reach a compromise on government funding.
[8] However, the solid news from corporate earnings seemed to outweigh concerns about the Federal government.
[9] Rather than focusing on drama in Washington, many traders are paying attention to the strength in U.S. corporations' fundamentals.
[10]
As more data unfolds, we will continue to monitor the relationship between government policy and economic performance. As always, if you have any questions about how current events and market developments may be affecting you, contact us any time
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ECONOMIC CALENDAR
Wednesday: Existing Home Sales
Thursday: New Home Sales, Jobless Claims
Friday: Durable Goods Orders, GDP
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February 19: Office Closed
Our office will be closed for President's Day
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First Quarter of 2018: New Office Location
We will be moving to a new office, located at 1258 Jungermann Road in St. Peters, during the first quarter. We will communicate with you once we have an official moving date.
March 30: Office Closed
Our office will be closed for Good Friday
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Here is a link to an informative video overview of the new tax law. In this video,
Uncovering the Impact of the New Tax Law
, Dean Mioli, Director of Investment Planning, SEI Advisor Network, highlights some of the major changes, policy highlights and implications of the new tax law (Tax Cuts & Jobs Act (H.R. 1) for individuals and families. If you would like a 2-page summary of the new tax code emailed to you, please click here.
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One of the key individual provisions of the Tax Cuts and Jobs Act, which went into effect January 1, 2018, has to do with 529 plans.
Up to $10,000 per year from a qualified 529 can now be used on elementary and high school education. There is no cap on the amount that can be used for college expenses. Prior tax law did not allow 529 plans to be used for elementary and high school expenses.
If you have a school-age child attending private school, we recommend that you consult with your CPA or accounting/tax professional regarding this provision.
We will continue to bring your attention to different investments that have been affected by the Tax Cuts and Jobs Act.
Please remember that Blattel and Associates does not render legal, accounting, or tax advice. We recommend that you consult your tax or legal advisors before taking any action that may have tax consequences.
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For the 2017 tax year, the dates for printing and mailing recipient copies are as follows:
- 1099-Rs (IRAs) available on:
- SEI mail date: January 31
- FCC mail date: January 31
- 1099-Bs (non-Qualified) available on:
- SEI mail date: February 28
- FCC mail date: February 15
Helpful phone numbers:
- SEI - Call Us - 636-397-8303
- First Clearing 1-800-727-0304
- IRS help line 1-800-829-1040
If you or your tax preparer need us to help gather any information, please give us sufficient notice to fulfill your request. Do not hesitate to call our office at 636-397-8303 with any questions.
Blattel & Associates does not provide tax advice. Please consult with your tax advisor with regard to your personal situation.
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