Stocks fluctuated last week, jostled by fitful bond yields and headline news, before ending strongly following Fed Chair Powell’s comments on the monetary outlook.

The Dow Jones Industrial Average slipped 0.45%, while the Standard & Poor’s 500 gained 0.82%. The Nasdaq Composite index rose 2.26% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.78%.^1,2,3

Stocks Manage Gains

Stock rallied on Monday on upbeat sentiment over the earnings release from a mega-cap semiconductor company scheduled for mid-week, only to see that momentum fizzle the following day on weak retail earnings and a credit downgrade of a handful of banks.

Stocks resumed their rally on weak economic data, which fueled hopes for future Fed dovishness. They also rose on expectations that earnings from a leading AI chipmaker would validate the AI narrative that propelled markets in the second quarter. Despite a blowout earnings report, stocks turned lower as investor attention quickly switched to Fed Chair Powell’s presentation scheduled for Friday.

After some initial jitteriness, Investors responded well to Powell’s comments, posting gains to close the week.

Powell Stands Firm

Powell spoke on Friday at the Fed’s annual economic symposium in Jackson Hole, asserting that, despite considerable progress, inflation remained too high and additional rate hikes may be in the offing. He acknowledged that previous rate increases had not yet thoroughly worked their way through the system, so caution about further hikes was needed.

Investors reacted to Powell’s comments far better than in August 2022, when a hawkish presentation sent stocks lower. Powell also addressed a growing feeling among investors that the Fed may eventually raise its inflation target to 2.5-3.0%. Powell rejected this idea unambiguously, stating that the two percent target would remain the Fed’s inflation goal.

This Week: Key Economic Data

Tuesday: Consumer Confidence. Job Openings and Turnover Survey (JOLTS).

Wednesday: Automated Data Processing (ADP) Employment Report. Gross Domestic Product (GDP).

Thursday: Personal Income and Outlays. Jobless Claims.

Friday: Employment Situation. Institute for Supply Management (ISM) Manufacturing Index. 

^{Source: Econoday, August 25, 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: Hewlett Packard Enterprise Company (HPE), HP, Inc. (HPQ)

Wednesday: Salesforce, Inc. (CRM), Veeva Systems, Inc. (VEEV), CrowdStrike (CRWD).

Thursday: lululemon athletica, inc. (LULU), Broadcom, Inc. (AVGO), Dollar General Corporation (DG), Dell Technologies, Inc. (DELL), VMware, Inc. (VMW)

^{Source: Zacks, August 25, 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.}

“Every man is working out his destiny in his own way and nobody can be of any help except by being kind, generous, and patient.”

– Henry Miller

Starting a New Business

Starting a new business? Here’s a tip that the Internal Revenue Service shares for new business owners:

Choose an appropriate business structure: The form of business determines which income tax return a business taxpayer needs to file.

If necessary, apply for an Employer Identification Number (EIN): An EIN is used to identify a business structure outside a personal identification number.

*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.gov⁴

Boost Your Productivity With These Tips

Take regular breaks. It seems counterintuitive, but most people are more productive when they take frequent breaks.

Do the complicated tasks first. Mark Twain famously said to “eat the frog first thing in the morning,” meaning that you should tackle your most challenging task immediately.

Make two to-do lists, one with your weekly goals and objectives and one with your daily tasks.

Divide large projects into manageable steps. Make the things on your to-do list specific so you can continue to cross things out and make progress.

Tip adapted from Formstack⁵

At a picnic, a photo has to be taken that depicts 6 children, 4 grandchildren, 2 brothers, 2 sisters, 3 sons, 3 daughters, 2 fathers, 2 mothers, 1 grandfather, 1 grandmother, 1 daughter-in-law, 1 mother-in-law, and 1 father-in-law. What is the smallest number of people that could appear in the photo?

Last week’s riddle:  Which of these five words doesn’t belong on this list: that, what, cat, sat, chat. Answer: What, as it doesn’t rhyme with the other words on the list.

Table Mountain, Victoria and Alfred Waterfront, Cape Town, South Africa

Footnotes and Sources

^{1. The Wall Street Journal, August 25, 2023}

^{2. The Wall Street Journal, August 25, 2023}

^{3. The Wall Street Journal, August 25, 2023}

^{4. IRS.gov, March 1, 2023}

^{5. Formstack, April 24, 2023}

Stocks extended their August declines last week as higher yields and weak economic data out of China soured investor sentiment.

The Dow Jones Industrial Average lost 2.21%, while the Standard & Poor’s 500 retreated 2.11%. The Nasdaq Composite index backtracked 2.59% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 2.83%.^1,2,3

Stocks Wilt

Rising bond yields, driven primarily by strong economic data and the release of the minutes from July’s Federal Open Market Committee (FOMC) meeting that pointed toward Fed officials’ potential need to raise rates further, weighed on stocks throughout the week.

In a week of light trading typical of August, stocks were additionally buffeted by a string of economic data that painted a flailing economic recovery in China and warnings of potential downgrades of dozens of U.S. banks by Fitch, a credit-rating agency.

After the 10-year Treasury yield rose to its highest level since October 2022 on Thursday, yields eased on Friday, helping to arrest the week’s downward trend.⁴

Retail Sales Surprise

Retail sales jumped 0.7% in July, the fourth-consecutive month of increasing consumer spending on goods. The report supported the growing narrative that the U.S. may be able to avoid a recession in the near term. The strong spending data, supported by a robust labor market, also may have placed the Fed in a more difficult position in trying to bring inflation down to its target rate without more rate hikes.⁵ 

Consumer spending was higher in most categories, including bars and restaurants, grocery and hardware stores, and back-to-school items like books and clothing. Sales of autos and electronics fell, a possible consequence of higher borrowing costs.⁵

This Week: Key Economic Data

Tuesday: Existing Home Sales.

Wednesday: Purchasing Managers’ Index (PMI) Composite Flash. New Home Sales.

Thursday: Durable Goods Orders. Jobless Claims.

^{Source: Econoday, August 18, 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.} 

This Week: Companies Reporting Earnings

Monday: Zoom Video Communications, Inc. (ZM)

Tuesday: Lowe’s Companies, Inc. (LOW)

Wednesday: Nvidia Corporation (NVDA), Autodesk, Inc. (ADSK), Analog Devices, Inc. (ADI), Snowflake, Inc. (SNOW)

Thursday: Marvell Technology, Inc. (MRVL), Ulta Beauty, Inc. (ULTA), Workday, Inc. (WDAY), Dollar Tree, Inc. (DLTR)

^{Source: Zacks, August 18, 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.}

“Every individual matters. Every individual has a role to play. Every individual makes a difference.”

– Jane Goodall

Is It Time For A Paycheck Checkup?

There’s no better time than the present to check your withholding status and make sure your paycheck accurately reflects the taxes you should be paying.

These paycheck checkups are a great practice when something happens in your life that may change your tax status, such as getting married or getting divorced, having a baby, getting a new job, or getting a raise or promotion at work. You can also adjust your withholding status if you want to change how much tax you withhold due to other circumstances.

During your paycheck checkup, you can also check other factors, such as how much you contribute to your health insurance or retirement plan. These expenses can also impact your tax liability.

*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.gov⁶

5-Minute Core-Strengthening Workout

Even if you only have a little time to dedicate to a core workout, this circuit will get you going and only takes 5 minutes. Here are the moves:

• 1-minute high plank: Your hands are on the ground, your arms are straight, and you are holding your body up with your arms and a tight core.
• 30-second side plank on each side: One hand is on the ground, your arm is straight, and the other is in the air. You can do a side plank with your feet stacked on each other (most demanding), your feet staggered (a little easier), or your bottom knee on the ground.
• 1-minute boat poses: Your feet are in the air, and your arms are by your side, reaching to your feet. You can pose with your legs bent (easier) or straight out (harder).
• 1-minute crunches: Lift your shoulders and upper back off the ground without pulling your neck.
• 1-minute dead bug: Lay on your back and alternate, extending out the opposite arm and the opposite leg simultaneously.

Tip adapted from Mind Body Green Movement⁷

Which of these five words doesn’t belong on this list: that, what, cat, sat, chat. 

Last week’s riddle: A man tells a friend that he married three women yesterday, which was legal. In fact, it was routine. How can he make such a statement? Answer: The man is a Justice of the Peace.

Edinburgh, Scotland

Footnotes And Sources

^{1. The Wall Street Journal, August 18, 2023}

^{2. The Wall Street Journal, August 18, 2023}

^{3. The Wall Street Journal, August 18, 2023}

^{4. CNBC, August 18, 2023}

^{5. The Wall Street Journal, August 15, 2023}

^{6. IRS.gov, April 10, 2023} 

^{7. Mind Body Green Movement, April 24, 2023}

Stocks retreated last week as bond yields increased following the Treasury’s announcement indicating “a larger-than-expected funding need” and a downgrade in the federal government’s debt rating.

The Dow Jones Industrial Average dropped 1.11%, while the Standard & Poor’s 500 shed 2.27%. The Nasdaq Composite index lost 2.85% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 3.27%.^1,2,3

Stocks Struggle

Stocks struggled as investor sentiment turned cautious amid rising bond yields. Markets were rattled initially by news that the Treasury raised its borrowing requirement for the third quarter by more than a quarter of a trillion dollars and on news that the Bank of Japan announced it would allow bond yields to rise after years of capping them. 

Rising yields continued to pressure stocks in the wake of a surprise rating downgrade of U.S. government debt by a major credit rating agency due to its belief in expected fiscal deterioration over the next three years.

Stocks rebounded Friday morning, rising on modest employment data only to reverse and add to the week’s losses.

Mixed Signals from the Labor Market

Fresh employment data last week gave some conflicting signals about the labor market. A new JOLTS (Job Openings and Turnover Survey) report showed a small decline in job openings and layoffs in June, leaving 1.6 job openings for each available worker.⁴ 

Automated Data Processing’s (ADP) employment report reflected strong private sector hiring with a 324,000 increase in jobs, exceeding the consensus forecast of a 175,000 gain.⁵

The government’s monthly employment report saw a cooling in hiring as employers added 187,000 jobs in July. This was slower than seen in the first six months but enough to shave the unemployment rate from 3.6% to 3.5%.⁶

This Week: Key Economic Data

Thursday: Consumer Price Index (CPI). Jobless Claims

Friday: Producer Price Index (PPI). Consumer Sentiment

^{Source: Econoday, August 4, 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: Skyworks Solutions, Inc. (SWKS)

Tuesday: Eli Lilly and Company (LLY), Duke Energy Corporation (DUK), United Parcel Service, Inc. (UPS), ONEOK, Inc. (OKE)

Wednesday: The Walt Disney Company (DIS)

^{Source: Zacks, August 4, 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.}

“A person is a person because he recognizes others as persons.”

– Desmond Tutu

Add Social Security Numbers of Your Dependents on Your Return

On your tax return, add the Social Security Numbers for your children and other dependents. Otherwise, the Internal Revenue Service (IRS) might deny any dependent credits you might be due, including the Child Tax Credit.

If you don’t have the number you need by the tax filing deadline, the IRS suggests filing for an extension rather than sending in a return without a Social Security number.

*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

4 Potential Health Benefits of Coffee

Coffee may help you live longer: Recent studies found that coffee drinkers are less likely to die from certain causes of death, including coronary heart disease, stroke, diabetes, and kidney disease.

Your liver may thank you: Research shows that coffee drinkers are more likely to have liver enzyme levels within a healthy range than people who don’t drink coffee.

You may decrease your risk of getting Alzheimer’s disease: The caffeine in two cups of coffee may protect against developing the condition. Researchers found that women aged 65 and older who drank two to three cups of coffee a day were less likely to develop dementia in general.

Your body may process glucose better: Studies have found that people who drink more coffee are less likely to have type 2 diabetes.

Tip adapted from John Hopkins Medicine⁸

What has three feet yet cannot run or walk?

Last week’s riddle: This word signifies a gap between hills or mountain ranges. Yet remove just one letter, and it signifies a gap between buildings. What is this six-letter word? Answer: The word valley, which becomes alley with a letter subtracted.

Amber Fort, Jaipur, India

Footnotes and Sources

^{1. The Wall Street Journal, August 4, 2023}

^{2. The Wall Street Journal, August 4, 2023}

^{3. The Wall Street Journal, August 4, 2023}

^{4. CNBC, August 1, 2023}

^{5. CNBC, August 2, 2023}

^{6. The Wall Street Journal, August 4, 2023}

^{7. IRS.gov, October 7, 2022}

^{8. John Hopkins Medicine, April 24, 2023}

Stocks moved to the rhythm of earnings season last week, initially rising on positive earnings surprises and faltering later in the week on key earnings disappointments. 

The Dow Jones Industrial Average rose 2.08%, while the Standard & Poor’s 500 added 0.69%. The Nasdaq Composite Index slumped 0.57% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.32%.^1,2,3

Earnings In Focus

Entering its first big week of the second quarter earnings season, solid reports from the nation’s big banks rewarded investor optimism, sparking a rally that continued into mid-week. An announcement by a mega-cap tech company of a new AI subscription plan, and stabilizing deposits at several regional banks, further fed investor enthusiasm.

Disappointing earnings from two big-tech names dragged market indices lower on Thursday, with the largest losses in the Nasdaq composite. Despite the reversal, 20 stocks in the S&P 500 touched 52-week highs on Thursday, with 11 reaching all-time highs.⁴

Stocks closed flat to end an otherwise mixed week.

Housing Hits A Bump

June housing reports reminded investors that any emerging housing recovery remains shaky. After a massive 21.7% jump in housing starts in May, new home construction tumbled 8.0% in June, with building permits (an indicator of future home construction) dropping 3.7%.⁵

Sales of existing homes were also lower in June, declining by 3.3%, owing to a persistently low inventory level. This was the slowest pace since January. Year-over-year sales were lower by 18.9%. One reason for low inventory is that homeowners have been reluctant to sell homes on which many have a historically low mortgage rate and face buying a new home at elevated prices with a much higher mortgage interest rate.⁶

This Week: Key Economic Data

Monday: Purchasing Managers’ Index (PMI) Composite Flash.

Tuesday: Consumer Confidence. 

Wednesday: FOMC Announcement. New Home Sales.

Thursday: Gross Domestic Product. Durable Goods Orders. Jobless Claims. 

Friday: Personal Income and Outlays.

^{Source: Econoday, July 21, 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: Microsoft Corporation (MSFT), General Electric Company (GE), Verizon Communications, Inc. (VZ), Visa, Inc. (V), Alphabet, Inc. (GOOGL), NXP Semiconductors, N.V. (NXPI), General Motors Company (GM), Archer Daniels Midland Company (ADM), 3M Company (MMM), Texas Instruments, Inc. (TXN), NextEra Energy, Inc. (NEE), Kimberly-Clark Corporation (KMB).

Wednesday: AT&T, Inc. (T), The Boeing Company (BA), The CocaCola Company (KO), Lam Research Corporation (LRCX), Union Pacific Corporation (UNP), ServiceNow, Inc. (NOW), Thermo Fisher Scientific, Inc. (TMO), General Dynamics Corporation (GD), O’Reilly Automotive, Inc. (ORLY), Chipotle Mexican Grill, inc. (CMG).

Thursday: Amazon.com, Inc. (AMZN), Intel Corporation (INTC), Ford Motor Company (F), AbbVie, Inc. (ABBV), Mastercard, Inc. (MA), Bristol Myers Squibb Company (BMY), McDonald’s Corporation (MCD), Northrop Grumman Corporation (NOC), HCA Healthcare, Inc. (HCA), Honeywell International, Inc. (HON), T-Mobile US, Inc. (TMUS), Southwest Airlines Co. (LUV), Boston Scientific Corporation (BSX).

Friday: Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), The Procter & Gamble Company (PG).

^{Source: Zacks, July 21, 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.}

“Freedom is not worth having if it does not connote freedom to err.”

– Mahatma Gandhi

Tax Tips For Side Gigs

There are some important tips to remember if you work a side gig:

• All income from these sources is taxable, including both full-time and part-time work and any cash payment received.
• As a gig worker, correctly classify yourself as an employee or an independent contractor; this can depend on where you live, even for the same services.
• Lastly, it’s important to consider paying quarterly taxes during the year to help avoid any federal or state tax penalties for underpayment.

*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

Summer Skincare Tips

The first and most important tip is always to wear sunscreen, even if you spend little time in the sun. Some skincare products, including makeup, have sunscreen built-in, but you should consider using a moisturizer with at least SPF 30 for extra protection.

Another good summer skincare tip is to lighten up your skincare routine. You’ll likely be sweating, swimming, and spending time outside in the summer, so you might not need as much makeup or products as in the winter.

Tip adapted from Allure⁸

Sometimes you pass me slowly, yet other times I fly by. Sometimes I slip away. Regardless of how slow or fast I am, one thing’s certain: when I’m gone, I’m gone for good. So what am I?

Last week’s riddle: What is the longest word in English to have only one vowel repeated? (Hint: It has 18 total letters, and the vowel repeats four times.) Answer: Strengthlessnesses.

Holland, Netherlands

Footnotes And Sources

^{1. The Wall Street Journal, July 21, 2023.}

^{2. The Wall Street Journal, July 21, 2023.}

^{3. The Wall Street Journal, July 21, 2023.}

^{4. CNBC, July 20, 2023.}

^{5. Yahoo!Finance, July 19, 2023.}

^{6. The Wall Street Journal, July 20, 2023.}

^{7. IRS.gov, January 12, 2023.}

^{8. Allure, April 24, 2023.}