Jim Streight

Weekly Market Insights | Stocks Retreat on Jobs and Election Concerns

by Jim Streight | Nov 4, 2024 | Weekly Stock Market Commentary

Stocks slid last week as mixed economic data and strong-but-not-spectacular Q3 corporate reports failed to inspire investors.

The Standard & Poor’s 500 Index fell 1.36 percent, while the Nasdaq Composite Index declined 1.50 percent. The Dow Jones Industrial Average edged down 0.15 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 0.96 percent.1,2

Q3 Reports Uninspired

Stocks rallied early Wednesday after the gross domestic product report showed a strong economy that appeared on the path to a soft landing. However, stocks moved lower throughout the day as investors digested mixed Q3 reports from a few mega-cap tech names.3,4

Stocks were under more pressure Thursday as disappointing outlooks for some key tech companies pulled the market down. A softer-than-expected jobs report on Friday unsettled investors, but stocks picked up as the day progressed, and attention shifted to how the Fed may interpret the jobs data.5

By Friday, the Nasdaq’s eight-week winning streak had ended, and the S&P fell for the second week.

Fed Back in Focus After Jobs Report

At its most recent meetings, the Fed has made it clear that it needed to balance the risks of both inflation and employment.

So Friday’s jobs report that showed 12,000 jobs created in October caught some by surprise. Economists expected the Labor Department to report 100,000, down from September’s 223,000 jobs.6

Investors parsed the data and determined the strike at a major aircraft manufacturer and two hurricanes caused the jobs report to fall short of estimates. Investors also appeared to believe the jobs report would prompt the Fed to move on rates at its two-day policy meeting, which ends on November 7.

This Week: Key Economic Data

Monday: Motor Vehicle Sales. Factory Orders.

Tuesday: Election Day.

Wednesday: FOMC Meeting – Day 1. EIA Petroleum Status Report.

Thursday: FOMC Meeting – Day 2. FOMC Announcement. Fed Chair Press Conference. Productivity and Costs.

Friday: Consumer Sentiment. Fed Official Michelle Bowman speaks.

Source: Investors Business Daily – Econoday economic calendar; November 1, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Monday: Vertex Pharmaceuticals Incorporated (VRTX)

Tuesday: Apollo Global Management Inc. (APO)

Wednesday: Qualcomm Incorporated (QCOM), Gilead Sciences, Inc. (GILD)

Thursday: Arista Networks, Inc. (ANET), Duke Energy Corporation (DUK), Airbnb, Inc. (ABNB)

Source: Zacks, November 1, 2024.
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

“It is not the position, but the disposition.”

– Susan Sontag

Military Members and Their Families Can Receive Free Tax Advice

The IRS started the Volunteer Income Tax Assistance (VITA) 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 on combat zone tax benefits, special extensions, and other special rules. VITA has convenient locations on and off base and even has offices overseas.

These offerings are just one way the IRS strives to make tax information available to all. It also offers other free assistance programs to taxpayers who qualify, including the elderly, through its Tax Counseling for the Elderly (TCE) program.

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS7

Indoor Exercises to Stay Active

It might be hard to get outside often for walks and exercise in the winter, but you can do plenty of indoor exercises, even when the weather outside is not cooperating. Here are some simple moves to get you exercising indoors:

Start with your core. Do 30 crunches followed by a minute-long plank. Repeat for three sets.
Do two sets of mountain climbers: 60 seconds on, 30 seconds rest.
Do push-ups (either on your knees or your toes), and hold a plank for a minute on your last rep. Rest for 20 seconds, then repeat three more times.
Do a standing, reverse lunge, 20 reps on each side. Complete three sets.
Do regular squats, but hold at the lowest point for three seconds. Complete 20 reps three times.

Tip adapted from Active8

I am only one syllable long and too heavy for one person to lift, but if you reverse me, I am not. What am I?

Last week’s riddle: How many times can you subtract the number 75 from 7,500? Answer: Once, because after the first subtraction, you will subtract 75 from 7,425.

Yosemite National Park

Sierra Nevada, California

Footnotes and Sources

1. The Wall Street Journal, November 1, 2024

2. Investing.com, November 1, 2024

3. CNBC.com, October 30, 2024

4. The Wall Street Journal, October 30, 2024

5. The Wall Street Journal, November 1, 2024

6. The Wall Street Journal, November 1, 2024

7. IRS.gov, March 29, 2024

8. Active, July 24, 2024

Happy Halloween!

by Jim Streight | Oct 31, 2024 | Noteworthy

October is coming to an end, and that means Halloween will be here before you know it. Are you ready for the holiday? If you have kids or grandchildren, no doubt they are!

All Hallows Eve is celebrated in many ways today; they are all enjoyable. So, carve those pumpkins. Break out the candy (go ahead, have a little yourself). Keep your kids safe, but let them have fun. Enjoy Halloween!

Weekly Market Commentary

by Jim Streight | Oct 30, 2024 | Carson

The Markets

Financial markets appear to have pre-election jitters.

The United States election is less than two weeks away. The candidates are neck and neck. The outcome remains uncertain. And expectations for volatility have been rising, with the CBOE Volatility Index (VIX) finishing last week at 20.33.

“When the VIX goes north of 20, Wall Street pays attention because that level signals heightened volatility,” reported Connor Smith of Barron’s.

One reason for heightened volatility may be concerns about the election. Ian Salisbury of Barron’s explained, “There are plenty of theories about how particular stocks will fare, depending on next month’s outcome. It isn’t hard to see why. The candidates have tried to curry favor with voters by championing or attacking favored industries, and sometimes individual companies. Vice President Harris has promised to raise the corporate tax rate, a move that could cut into corporate earnings, and Democrats are widely seen as tougher on antitrust issues, a potential hurdle for Wall Street banks looking to capitalize on pent-up [merger and acquisition] activity. Trump, meanwhile, has threatened hefty new tariffs, which could help U.S. manufacturers but hurt multinationals. He’s even threatened individual companies like John Deere over plans to move manufacturing facilities abroad. The good news? Investors can mostly shrug the campaign rhetoric off and focus on stocks’ fundamentals.”

So far, third-quarter earnings reports have been strong. Regardless, stock market investors became significantly less bullish last week, according to the AAII Investor Sentiment Survey. The survey asked investors whether they think the stock market will move higher (bullish) or lower (bearish) over the next six months.

Bullish sentiment declined from 45.5 percent the week of October 16 to 37.7 percent last week. (The historic average for bullishness is 37.5 percent.)
Bearish sentiment increased from 25.4 percent to 29.9 percent. (The historic average for bearishness is 31 percent).
Neutral sentiment also increased from 29.2 percent to 32.4 percent. (The historic average is 31.5 percent.)

Bond investors also have been adjusting their expectations. Since mid-October, the yield on the benchmark 10-year U.S. Treasury note has trended higher. At the start of the month, the 10-year note yielded 3.74 percent. Last week, its yield rose from 4.07 percent to 4.23 percent.

“The rise is likely a reflection of the fact the Federal Reserve will cut interest rates fewer times than investors had thought after September’s Federal Open Market Committee meeting, a result of inflation being above its target and a job market that has grown faster than expected. Also, Donald Trump’s chances of winning the presidential election have risen in the past few months, according to RealClearPolitics. His policies include fiscal spending and tariffs, both of which create inflation and throw cold water on the idea that the Fed will cut rates many times. While the economy could continue to grow, tariffs, for their part, not only lift prices, they destroy demand,” reported Jacob Sonenshine of Barron’s.

Ben Levisohn of Barron’s offered some advice to anyone getting swept up in pre-election jitters. “The truth of the matter is that reading the financial market tea leaves is far from straightforward…In fact, investing with your politics is one of the worst ways to lose money—or miss out on gains.” If you have concerns about market volatility or the possible effect of the election on your portfolio, get in touch. We’re happy to talk with you about your concerns and your portfolio.

Last week, the S&P 500 Index and Dow Jones Industrial Average moved lower, while the Nasdaq notched a seventh week of gains. Yields on longer maturities of U.S. Treasuries moved higher over the week.

DO YOU TALK ABOUT MONEY? A lot of important events and holidays are coming up in November. There’s Election Day, National Calzone Day, No-Shave November, the International Day for Tolerance and Talk Money Day. That’s right! On November 8, everyone is encouraged to put their fears aside and begin talking with other people—spouses, partners, roommates, friends, adult children, and younger children—about money. It’s not going to be easy—money talk is tough for many people. Sixty-two percent of Americans who participated in a 2023 survey said they did not talk about money. Those who did have financial conversations generally conversed with a spouse or partner, reported Kamaron McNair of CNBC.

There are many reasons people avoid financial conversations. They may:

Believe it is impolite to talk about money.
Worry that discussions will be awkward.
Fear being judged for their choices.
Think their money is no one else’s business.

The issue is less prevalent among younger people than it is among older people, according to CNBC. “…56 [percent] of millennials and 49 [percent] of Gen Zers say they’re having financial conversations on the regular, compared with just 38 [percent] of Gen Xers and 22 [percent] of baby boomers…Talking about money can help young people increase their financial literacy as they learn from and teach their friends. But it’s equally important for younger people to bring up financial topics with their elders—or at least their more experienced peers—especially when it comes to making big decisions,” reported McNair.

While breaking down the money-talk barrier may be challenging, the rewards can be significant. Financial discussions can improve decision-making, strengthen relationships, and help children develop sound money habits. Our goal is to help the people we serve make financial decisions that help them live the lives they want to lead. If talking about money is a difficult hurdle, get in touch. We can help facilitate these important discussions.

Weekly Focus – Think About It

“The single biggest problem in communication is the illusion that it has taken place.”

—George Bernard Shaw, Nobel Prize-winning playwright

Sources:

https://www.cboe.com/tradable_products/vix/ (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Cboe_VIX%20Index%20Charts_1.pdf)

https://www.barrons.com/livecoverage/stock-market-today-102324/card/the-dow-keeps-falling-the-market-s-fear-gauge-is-near-a-key-level–349PmzqKaFkDhC1aYtSc?siteid=yhoof2 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_The%20Dow%20Keeps%20Falling_2.pdf)

https://www.barrons.com/articles/portfolio-stress-test-election-4218808a?mod=hp_LEDE_C_1 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Dont%20Rule%20Out%20a%20Market%20Panic_3.pdf)

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_102524.pdf

https://www.aaii.com/sentimentsurvey (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Historical%20Sentiment%20Data_5.pdf)

https://finance.yahoo.com/quote/%5ETNX/history/

https://www.barrons.com/articles/stock-market-danger-zone-tariffs-b2bb22e6?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Stock%20Market%20Enters%20Danger%20Zone_7.pdf)

https://www.barrons.com/articles/stock-market-trump-harris-election-61b41129?refsec=up-and-down-wall-street&mod=topics_up-and-down-wall-street (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Market%20is%20Afraid%20of%20Election%20Day_8.pdf)

https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2024/10-28-24_Barrons_Data_9.pdf)

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202410

https://www.calendarr.com/united-states/calendar-november-2024/

https://nationaltoday.com/talk-money-day/

https://www.cnbc.com/2023/05/10/americans-arent-talking-about-money-it-could-hold-you-back.html

https://www.brainyquote.com/quotes/george_bernard_shaw_385438

Weekly Market Insights: Stocks Mixed Ahead of Election

by Jim Streight | Oct 28, 2024 | Weekly Stock Market Commentary

Stocks were mixed last week as fresh economic data points and election-related uncertainty slowed market momentum.

The Standard & Poor’s 500 Index fell 0.96 percent, while the Nasdaq Composite Index rose 0.16 percent. The Dow Jones Industrial Average dropped 2.68 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 2.30 percent.^1,2

Nasdaq Leads

Stocks were mixed for the first half of the week as investors geared up for a steady stream of Q3 reports. The 10-year Treasury yield continued to trend higher, which caught the attention of some traders.

Markets fell Wednesday morning with news that existing home sales fell to a 14-year low in October; still slowed by higher interest rates, sales are on track for their worst year since 1995. Also, pre-election jitters remained an undertow with traders.^3,4,5

News that durable goods orders rose in September buoyed sentiment a bit. At Friday’s close, the Nasdaq, fueled by technology names, marked its seventh consecutive week of gains but the S&P 500 broke its 6-week winning streak.^6,7

Election Focus

With the election cycle in full swing, some traders appear to be preparing for an uptick in volatility in the coming weeks.

In late August, nearly 90 percent of stock traded above their 20-day moving average. However, that momentum has slowed. On Tuesday, Standard & Poor’s reported that the number of stocks above their 20-day moving average fell to nearly 50 percent. Traders may be moving to more of a “risk off” position ahead of November 5.⁸