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Stocks Down
For the second week in a row, the S&P 500 and the Dow retreated from the record highs they set at the end of March. The Nasdaq’s fractional weekly decline was smaller than those of its peers, owing in part to relatively strong performance from a handful of technology stocks.
The latest inflation report cast further doubt about the timeline for potential interest-rate cuts, as the Consumer Price Index rose to an annual rate of 3.5% in March, up from 3.2% the previous month. Excluding volatile food and energy prices, core inflation rose 3.8%. U.S. government bond yields rose sharply following Wednesday’s report.
Wednesday’s hotter-than-expected inflation data reinforced recent market expectations that initial interest-rate cuts are no longer imminent—a view that was backed up later in the day by the release of minutes from the U.S. Federal Reserve’s March policy meeting. Fed officials agreed that they were prepared to keep rates at current high levels for longer than they had previously anticipated.
In the wake of Wednesday’s inflation report, the yield of the 10-year U.S. Treasury bond rose to the highest level in five months, as it climbed as high as 4.59% at one point. As recently as February 1, the 10-year yield had closed as low as 3.86%.
Gold prices rose for the third week in a row, adding to the record highs reached in previous weeks. On Friday, gold futures climbed as high as $2,448 per ounce in the morning before retreating to around $2,360 in the afternoon—up about 1% for the week and more than 9% since March 22.
Monday’s scheduled release of U.S. retail sales data could indicate whether a recent positive turnaround in momentum extended into March. In February, sales rebounded to a 0.6% gain after posting an unexpected 1.1% decline in January.
Source: John Hancock Investment Management
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Federal Tax Rates by Income (2020) | |
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For most Americans, today is the deadline to file or extend (and pay taxes owed) your 2023 tax return. The IRS has given some automatic extensions like Davidson County (affected by tornados at the end of 2023).
It is always interesting to see the statistics on tax filing. The chart above breaks down the taxes paid by various earning levels (as of tax year 2020). Here are some more interesting facts during the 2023 calendar year.
- How many tax returns are filed each year?
In the fiscal year of 2023, the IRS processed more than 162 million federal individual tax returns and supplemental documents.
- How many refunds has the IRS issued?
For the fiscal year of 2023, the IRS issued more than 95 million refunds to individuals.
- When is the earliest I can file my 2023 taxes?
The IRS has set an official start date for filing 2023 taxes for January 29, 2024.
- What is the due date to file my 2023 taxes?
All individuals filing a 2023 Form 1040 or Form 1040-SR have a due date of April 15, 2024 to file their 2023 taxes and to pay any taxes due (unless the IRS has given your residence an automatic extension like some counties in TN this year).
- What is the average tax refund?
For 2023, the average tax refund amount issued for individuals was $3,167]. That’s down 2.6% since 2022.
- How long do tax refunds take?
According to the IRS, most refunds are issued in less than 21 calendar days if you file electronically. However, if the individual files a paper tax return, it could take four weeks or more.
- What is the penalty for not filing taxes?
If someone forgets to file their tax return or neglects to do so, a failure-to-file penalty may apply. If you don’t owe any taxes, you will not be charged a failure-to-pay penalty. It can typically be 5% of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%.
For more details and facts, click here to read a Forbes article from February 2024.
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Whenever lottery jackpots swell, a wave of interest seems to roll across the United States. It happened this month. After the numbers were drawn, someone in Oregon had won $1.3 billion.
Prizes like that make lotteries tempting – and there are plenty of lotteries selling tickets. In the United States, government-operated lotteries are active in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The profits earned by lotteries:
“…benefit different programs in different jurisdictions. In many cases lottery profits are combined with tax and other revenues in a government's general fund. In other cases, lottery proceeds are dedicated to a wide range of causes, including education, economic development, the environment, programs for senior citizens and veterans, health care, sports facilities, capital construction projects, cultural activities, tax relief, and others,” reported the North American Association of State and Provincial Lotteries.
The odds of winning a lottery, typically, are astronomically low. In April, the odds of winning were 1 in 292 million, according to Khristopher Brooks of CBS News. Despite the poor odds, people spend an enormous amount of money on lottery tickets. In 2023, people in the U.S. spent more than $110 billion on lottery tickets. The Economist reported:
“In the poorest 1% of zip codes that have lottery retailers, the average American adult spends around $600 a year, or nearly 5% of their income, on tickets. That compares with just $150, or 0.15%, for those in the richest 1% of zip codes. In other words, the poorest households spend roughly 30 times more on lotteries than richer ones, as a share of income.”
If people saved and invested instead of spending on lottery tickets, they could have more to show for it. For example, 30-year-olds who save:
- $150 a year might have about $35,000 at full retirement age, if they earned 8 percent on average each year.
- $600 a year might have about $142,000, at full retirement age, if they earned 8 percent on average each year.
The bottom line is that saving and investing is more likely to help people reach their financial goals than buying lottery tickets is.
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AJ Advisors
www.ajadvice.com
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Phone: (615) 709-8709
Fax: (615) 505-3306
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John Stauffer, CFP®
Partner
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Andrew Quinn, CFP®
Partner
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