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How to Avoid Having to Ask “Where’d All My Money Go?”

Weekly Commentary, November 3rd, 2017

 

Summary

  • Equity markets were positive this week with U.S. stocks (S&P 500) up 0.29% and international stocks (EAFE) up 0.90%

  • Fixed income markets were mixed with investment grade bonds (AGG) up 0.40% and high yield bonds (JNK) down -0.16%

  • Earnings Season Update – with the majority of S&P 500 companies having reported earnings, the rate of growth is running at +6.0% for sales, and +8.6% for earnings per share.

  • Federal Reserve News – the Fed kept rates unchanged this week, but left the door open for a likely rate hike in December as it mentioned a number of points of economic strength in its forward outlook—the fact that no members dissented is another strong sign a hike is likely. President Trump also announced this week that the next Fed Chair will be current Fed Governor Jerome Powell. The markets viewed these announcements as a net positive.

  • U.S. Tax Reform - House Republicans revealed details to the newly proposed tax reform plan, named the "Tax Cuts and Jobs Act", which aims to drop corporate tax rates from 35% to 20%, consolidate the number of individual income tax brackets, and eliminate many deductions. We also received more clarity around the proposed individual tax bracket breakdowns. For married couples filing jointly income of $0-$90k will be taxed at 12%, $90k-$260k at 25%, $260k-$1 million at 35%, and the top tax bracket will remain at 39.6% for income over $1 million. The House Ways and Means Committee will meet next week to review the plan with the GOP aiming to get the plan into law by Christmas to take full effect in 2018.

  • Commentary: In the Our Take section below I take a look at historic market drawdowns and what the current likelihood of a bear market is given the most recent economic data. While in the Commentary section, my colleague Ron Kincaid shares some insights regarding the importance of long-term care assistance.

 

To read the full commentary, please click below!

Weekly Commentary

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