We spent last week implementing year end strategies to reduce clients taxes. This included tax loss harvesting to offset capital gains tax, and helping business owners benefit from California's PEET rule, (Pass-Through Entity Elective Tax rule.) This enables business owners to pay their California State taxes through their business to gain a significant tax deduction. Meanwhile...
In a holiday-shortened week, erratic trading left stocks marginally down for the week.
The Dow Jones Industrial Average lost 0.17%, while the Standard & Poor’s 500 slipped 0.14%. The Nasdaq Composite index fell 0.30%. The MSCI EAFE index, which tracks developed overseas stock markets, edged 0.61% higher.1,2,3
Stocks End Lower
Steps by China to move past its zero-Covid policies triggered concerns that its economic reopening might aggravate inflation pressures, sending stocks lower and bond yields higher to begin the week. Technology stocks saw the most significant hit.
With dimming prospects of a Santa Claus rally (the historical tendency of stocks to rise in the final trading days of the year and the first two days of the new year), stocks rebounded strongly on Thursday to erase the losses of the previous two days. However, stocks again turned lower to end the week with small losses.
Lower Risk Appetite Amid Uncertainty
In an otherwise slow week for news, two monthly reports were released highlighting the market's headwinds. The first was State Street’s Investor Confidence Index, which measures the risk appetite of institutional investors. The December report showed the confidence of large asset managers in investing in risk assets, like stocks, has dropped over the past two months, explaining, in part, why stocks may have struggled of late.4
Meanwhile, the Atlanta Fed released its Survey of Business Uncertainty, which reflected both declining expectations around sales growth and employment, along with growing uncertainty about revenue and employment growth over the next 12 months.5
This Week: Key Economic Data
Tuesday: Purchasing Managers’ Index (PMI)-Manufacturing. Institute of Supply Management (ISM) Manufacturing. Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Jobless Claims. Automated Data Processing (ADP) Employment Report. Purchasing Managers’ Index (PMI)-Services.
Friday: Employment Situation.
Source: Econoday, December 30, 2022
This Week: Companies Reporting Earnings
Thursday: Constellation Brands, Inc. (STZ), Walgreens Boots Alliance, Inc. (WBA), Conagra Brands (CAG).
Source: Zacks, December 30, 2022
"Science is the great antidote to the poison of enthusiasm and superstition."
– Adam Smith
What is the Premium Tax Credit?
The premium tax credit (PTC) is a refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace. There are a few requirements to qualify for the PTC, including:
* 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.gov6
White Bean Chili Recipe
Break out that dutch oven because this white bean chili recipe is perfect for winter.
Tip adapted from Cooking Classy7
What word doesn’t belong in this group: blast, paper, castle, coin, box, storm?
Last week’s riddle: Name the three English-language three-letter words that begin and end with the letter E. Answer: eve, ewe, and eye.
Swiftcurrent Lake, Glacier National Park, Montana
Footnotes and Sources
2. The Wall Street Journal, December 30, 2022
3. The Wall Street Journal, December 30, 2022
4. State Street, December 28, 2022
5. Federal Reserve Bank of Atlanta, December 28, 2022
6. IRS.gov, July 7, 2022
7. Cooking Classy, March 4, 2019
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The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
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The tax saving PEET election and weekly market insights
January 03, 2023