Stocks took a breather last week as investors digested the previous week’s surge and the month-to-date solid gains.

The Dow Jones Industrial Average lost 1.67%, while the Standard & Poor’s 500 fell 1.39%. The Nasdaq Composite index dropped 1.44% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 2.00%.^1,2,3

Rally Stalls

The stock market drifted lower last week as the tug-of-war between bulls and bears played out in a week that was light on market-moving news.

After falling in the first days of a holiday-shortened trading week, stocks rebounded on Thursday to recover some of the week’s losses. Stocks looked past Congressional testimony by Fed Chair Powell, who said two more rate hikes are likely in the wake of interest rate hikes by central bankers in the U.K., Switzerland, Norway, and Turkey.

The retreat continued into Friday, fueled by global growth fears from new economic data indicating more robust economic slowdowns in the eurozone, Japan, and Australia.

Housing Sentiment Improves

Home builders’ confidence edged into positive territory for the first time in 11 months, aided by strong demand, low inventory, and a recovering supply chain. May’s new home sales, which rose 21.7%–the most significant percentage gain since October 2016, validated this confidence. The number of new home starts in May (1.63 million) hit a 13-month high, with both single- and multi-family homes up substantially.^4,5

Sales of existing homes in May rose 0.2% month-over-month while declining 20.4% from a year ago. The existing home market continues to suffer from low inventory and still-high prices. The median price of a home sold in May declined 3.1% year-over-year to $396,100.⁶

This Week: Key Economic Data

Tuesday: Durable Goods Orders. New Home Sales.

Thursday: Gross Domestic Product (GDP). Jobless Claims. 

Friday: Personal Income and Outlays. Consumer Sentiment.

^{Source: Econoday, June 23, 2023
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

Tuesday: Walgreens Boots Alliance, Inc. (WBA).

Wednesday: Micron Technology, Inc. (MU), General Mills, Inc. (GIS).

Thursday: Nike, Inc. (NKE), McCormick & Company, Inc. (MKC)

^{Source: Zacks, June 23, 2023
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.}

“There is no better compass than compassion.”

– Amanda Gorman

Couples Who Work Together, Tax Together

When a household starts a business, couples find themselves learning about the tax responsibilities related to that business. There are some things to consider when working together.

Here are a few items to consider:

• You should first establish if you have a partnership business (where both spouses have an equal say in the affairs, services, and capital of the business) or an employee/employer relationship (one spouse substantially controls management decisions). These relationships face different tax situations.
• If there is an employee/employer relationship, the second spouse (employee) may be subject to income, Social Security, and Medicare
• You may need to file the U.S. Return of Partnership Income form if there is a partnership relationship.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

Eat This, Not That: Easy Food Swaps Anyone Can Do

Eating healthier doesn’t have to be hard! You might not have to make any significant changes to your current diet! You can cut the bad stuff by swapping out unhealthy options for healthier picks and still enjoy your meal. Here are some of our favorite food swaps:

• Mustard instead of mayonnaise (0 calories vs. 90 calories)
• Scrambled eggs with green onions instead of cheese (170 calories vs. 275 calories)
• Sparkling water instead of soda (0 calories vs. 140 calories)
• Fresh fruit instead of dried fruit (69 calories vs. 325 calories)
• Greek yogurt instead of sour cream (28 calories vs. 60 calories)
• Olive oil spray instead of a tablespoon of olive oil (5 calories vs. 120 calories)
• Corn tortillas instead of flour tortillas (100 calories vs. 280 calories)
• All-bran cereal instead of granola (80 calories vs. 200 calories)
• Goat cheese instead of Brie cheese (70 calories vs. 100 calories)

Many healthy swaps like these can help you reduce your caloric intake, consume less sugar, and make it easy to create a more balanced meal.

Tip adapted from EatThis.com⁸

You hold 3 U.S. coins in your hand. None of them are dimes, pennies, or quarters. They total 60¢. What 3 coins do you have in hand?

Last week’s riddle: A major league pitcher faces just 27 hitters in a baseball game. He retires all of them, allowing no runs and no hits. Still, his team loses the game 4-0. How is this possible?  Answer: He was a relief pitcher.

Lake Tekapo & Lupin Field, New Zealand

Footnotes and Sources

^{1. The Wall Street Journal, June 23, 2023.} 

^{2. The Wall Street Journal, June 23, 2023.}

^{3. The Wall Street Journal, June 23, 2023.}

^{4. National Association of Home Builders, June 19, 2023}

^{5. Reuters, June 20, 2023.}

^{6. CNBC, June 22, 2023.}

^{7.  IRS.gov, February 22, 2023}

^{8. EatThis.com, February 15, 2023}

A late-week rally sent stocks into positive territory, with the S&P 500 index closing just shy of the 4,300 mark.

The Dow Jones Industrial Average gained 0.34%, while the Standard & Poor’s 500 added 0.39%. The Nasdaq Composite index improved 0.14% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.44%.^1,2,3

Stocks Edge Higher

Stocks bumped along the flatline for much of the week ahead of this week’s two inflation reports and the June meeting of the Federal Open Market Committee.

Amid little news, stocks drifted lower to start the week until Wednesday, when a solid early-day rally evaporated on news of the Bank of Canada’s surprise interest rate hike. Stocks rose again the following day, holding onto their gains, with the S&P 500 hitting a new closing high for 2023.⁴

Stocks added small gains on Friday after weathering some midday weakness, leaving major indices marginally higher for the week.

Better Breadth

One investor concern has been that a handful of mega-cap stocks have driven recent market returns. Last week’s market bucked that trend, with outperformance in small-cap stocks and equally-weighted stock market indices.

For instance, the Russell 2000 index (which measures the performance of 2,000 smaller-cap companies) rose 1.90% this week, outpacing the S&P 500 and the technology-heavy Nasdaq.⁵

Another example of broadening performance was the outperformance of the equally-weighted S&P 500 index, where each stock has equal weighting regardless of size, versus the market-cap S&P 500 index, where mega-cap companies disproportionately impact index performance. Last week’s return of the equally-weighted S&P 500 index exceeded the cap-weighted S&P 500’s return by 0.65%.⁶

This Week: Key Economic Data

Tuesday: Consumer Price Index (CPI).

Wednesday: Producer Price Index (PPI). FOMC Announcement.

Thursday: Retail Sales. Industrial Production. Jobless Claims.

Friday: Consumer Sentiment.

^{Source: Econoday, June 9, 2023
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: Oracle Corporation (ORCL).

Thursday: Adobe, Inc. (ADBE).

^{Source: Zacks, June 9, 2023
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.}

“I don’t believe in being serious about anything. I think life is too serious to be taken seriously.”

– Ray Bradbury

Do You Know The Difference Between Taxable And Nontaxable Income?

All income you receive is taxable unless the rules explicitly state it isn’t. According to the Internal Revenue Service (IRS), taxable income includes earned income like wages and any income earned by providing a service or the exchange of property or services. Rental income, interest, dividends, and social security benefits are all examples of taxable unearned income.

Some income is only taxable if certain conditions are met. For example, life insurance proceeds are usually not taxable to the beneficiary unless you redeem a life insurance policy for cash. Any amount you receive above the cost of the policy is taxable. State and local income tax refunds may be taxable and should be reported on your federal taxes.

Some forms of income are usually not taxable, like:

• Gifts and inheritances. (State taxes may apply to inheritances.)
• Welfare benefits.
• Damage awards for physical injury or sickness.
• Cash rebates from a dealer or manufacturer for an item you buy.
• Reimbursements for qualified adoption expenses.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

Choose To Make Your Plate “MyPlate”

The so-called Food Pyramid had many flaws. Its significant weaknesses were that it generalized recommended daily servings and poorly defined portion sizes. So, in 2008, the U.S. Department of Agriculture implemented a user-friendly redesign: the pyramid was transformed into a plate.

The concept behind the MyPlate design was both revolutionary and seemingly obvious. After all, we eat off a plate, not a pyramid. Portions are easier to see. Make half the plate fruits and vegetables; the other half, grains and protein—a serving of dairy (or non-dairy alternative) on the side.

Take advantage of this method the next time you sit down for a meal and see what adjustments you can make to make your plate even healthier.

Tip adapted from MyPlate.gov⁸

A common English word refers to a person or thing not being in a place. But just by inserting a space within it, you can get two words meaning that a person or thing is present. What is this word?

Last week’s riddle: A friend wants change for a dollar. All you have in your pocket are over a dollar in coins, but you still can’t make the change correctly. What is the largest amount of money you could have in this situation? What coins do you have that prevent you from making the change correctly? Answer: $1.19. Four pennies, four dimes, and three quarters.

Hallstatter Lake, Hallstatt, Austria

Footnotes And Sources

^{1. The Wall Street Journal, June 9, 2023.} 

^{2. The Wall Street Journal, June 9, 2023.}

^{3. The Wall Street Journal, June 9, 2023.}

^{4. CNBC, June 8, 2023.}

^{5. The Wall Street Journal, June 8, 2023.}

^{6. Google Finance, June 9, 2023.}

^{7. IRS.gov, November 10, 2022.}

^{8. MyPlate.gov, February 15, 2023.}

Stocks surged higher in the closing days of a holiday-shortened trading week, ignited by a political resolution on raising the debt ceiling and a strong employment report.

The Dow Jones Industrial Average rose 2.02%, while the Standard & Poor’s 500 advanced 1.83%. The Nasdaq Composite index gained 2.04% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.52%.^1,2,3

A Sigh of Relief

The weight of uncertainty over negotiations to raise the federal debt ceiling was lifted last week by the news of an agreement between President Biden and House Speaker McCarthy and its subsequent passage in Congress.

After a modest gain on Thursday following the House vote, stocks rallied on Friday, responding to the Senate passage of the debt ceiling bill, which eliminated a significant overhang to the market. A robust federal employment report also contributed to the Friday rally. The report exceeded market expectations in the growth of new jobs while reflecting a deceleration in wage growth.

The Irrepressible Labor Market

Last week’s employment data showed that the labor market remains stout after over a year of sharp interest rate hikes.

Job openings in April increased to more than 10 million, reversing three straight months of declines, while private sector employment increased by 278,000 jobs in May, according to a survey by Automated Data Processing (ADP), a significant payroll processor.^4,5

In line with these strong numbers, the Department of Labor reported 339,000 new jobs were added in May. That came above the consensus estimate of 190,000 and marked the 29th consecutive month of positive growth.⁶

This Week: Key Economic Data

Monday: Factory Orders. Institute of Supply Management (ISM) Services Index.

Tuesday: Jobless Claims. 

^{Source: Econoday, June 2, 2023
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

Tuesday: The J. M. Smucker Company (SJM)

Wednesday: Campbell Soup Company (CPB)

Thursday: DocuSign (DOCU)

^{Source: Zacks, June 2, 2023
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.}

“I’m not embarrassed anymore about anything that people, that human beings are going through.”

– Mary J. Blige

Owe the IRS Money? Here’s How to Pay

If you owe federal taxes, you may be required to pay by the April deadline. Remember, if you get an extension to file your taxes, payment is still due by the April deadline. You can set up a payment plan if you can’t pay the full amount you owe now.

Here are some choices for making your payment:

• Use Direct Pay: Internal Revenue Service (IRS) Direct Pay is a free and secure way to pay directly from your checking or savings account.
• Pay by Debit or Credit Card: If you don’t want to link a bank account, you can use your credit or debit card. Remember that you’ll have to pay a processing fee and may incur interest charges.
• Pay When You E-File: If you file your federal tax return electronically, you can pay directly from your bank account using Electronic Funds Withdrawal.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

Eating To Your Heart’s Content

Deciding to change your diet can feel daunting. It can be challenging to figure out which one is “best” for you. Many fad diets come and go, but a few have stuck around, the most popular being the Mediterranean diet.

The Mediterranean diet is more of a lifestyle shift toward healthier eating patterns. Modeled after principles of Italian and Greek cuisine, which have remained relatively unchanged since the 1960s, this diet may lead to lower rates of heart disease, type 2 diabetes, and other chronic illnesses. The diet emphasizes eating more fruits, vegetables, legumes, nuts, seeds, fatty fish, whole grains, olive oil, and fewer meats and dairy products. The diet is flexible. Elimination isn’t the intention, but rather favoring more nutrient-rich foods over energy-dense ones.

Food is life, and healthy choices can help support a healthier life. While the Mediterranean diet could be a good option, no single diet will ideally fit everyone’s lifestyle, preferences, and health needs. So, discuss your dietary choices with your physician or registered dietitian first.

Tip adapted from Mayo Clinic⁸

A friend wants change for a dollar. All you have in your pocket are over a dollar in coins, but you still can’t make the change correctly. What is the largest amount of money you could have in this situation? What coins do you have that prevent you from making the change correctly?

Last week’s riddle: An eccentric farmer requests that you build four pens for his nine sheep but only allow an odd number of sheep in each pen. How do you accomplish this? Answer: Build three pens, each holding three sheep. Build a fourth pen surrounding the other pens, containing all nine sheep.

Wave Rock Formation, Coyote Butte, Vermillion Cliffs, Arizona.

Footnotes and Sources

^{1. The Wall Street Journal, June 2, 2023.} 

^{2. The Wall Street Journal, June 2, 2023.}

^{3. The Wall Street Journal, June 2, 2023.}

^{4. The Wall Street Journal, May 31, 2023.}

^{5. CNBC, June 1, 2023.}

^{6. CNBC, June 2, 2023.} 

^{7. IRS.gov, February 15, 2023}

^{8. Mayo Clinic, February 15, 2023}