The following economic awareness entry is based on short-term events and therefore should not be taken as information towards making investment decisions, which are of a long-term nature. It is only meant to provide clarity regarding current economic events, as there is often a large degree of incorrect information dispersed through the media or other sources.
Stocks Scale New Heights
In a holiday-shortened week, stocks rallied as investors welcomed testimony from incoming Treasury Secretary Janet Yellen to the Senate Finance Committee that suggested lawmakers needed to “act big” on fiscal stimulus, raising hopes for a new round of federal spending.
An orderly presidential transition and the anticipation of a more effective vaccine distribution plan contributed to stocks touching multiple new highs last week. Investor enthusiasm was further supported by a strong start to the fourth-quarter earnings season.
Mega-cap technology companies resumed their market leadership ahead of a full calendar of big tech earnings reports this week. Market momentum stalled a bit into the close on concerns that any stimulus spending bill might come in lower than expected.
Earnings Beating Expectations
One of the concerns of market watchers has been the valuations of stocks. Stocks are currently trading at about 23 times 2021 earnings, above the historical range of 15 to 17 times forward earnings.4
This Week: Key Economic Data
Tuesday: Consumer Confidence.
This Week: Companies Reporting Earnings
Monday: KimberlyClark (KMB).
FOOD FOR THOUGHT
“In the depth of winter, I finally learned that there was in me an invincible summer.”
– Albert Camus
Know and Understand Your Correct Filing Status
Taxpayers need to know their correct filing status and be familiar with each choice.
When preparing and filing a tax return, the filing status affects:
Here are the five filing statuses:
Single: Normally, this status is for taxpayers who are unmarried, divorced, or legally separated under a divorce or separate maintenance decree governed by the state law.
Married filing jointly: If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
Married filing separately: Married couples can choose to file separate tax returns, when doing so results in less tax owed than filing a joint tax return.
Head of household: Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themself and a qualifying person living in the home for half of the year.
Qualifying widow(er) with dependent child: This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.
* 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
HEALTHY LIVING TIP
Keeping Your Heart Rate Up (When Temperatures Are Down)
Colder weather can steal our motivation to leave the warmth of our homes unless we have to. But your workouts don’t need to stop during the winter. Here are a few ways you can feel the burn indoors, while Mother Nature keeps it cool outside.
Hop to it with a rebounder (a mini trampoline) or a jump rope. If you have neither, fake it by keeping your hands to your sides and rotate them as you mimic the rest of the exercise sans equipment.
Find a YouTube video or other streaming guided workout. Can’t squeeze in a full half hour at once? Pause it and return when you’re ready.
If you can afford it, invest in a piece of workout equipment you know you’ll use. If you run or hike, consider a treadmill with an adjustable incline. Like to ride your bike? Consider getting a stationary one.
There are lots of ways to stay fit while winter rages on outside. But don’t forget to always make sure to discuss any medical concerns with your health care provider before beginning any fitness routine; the information provided is not a substitute for medical advice.
Tip adapted from Real Simple7
A man claims he was 88 years old two days ago, and yet he also tells you that he will turn 91 next year. How can this be?
Last week’s riddle: Four cars approach an intersection with four-way stop signs simultaneously, each car coming from a different direction. After stopping, the drivers all accelerate at the same time. However, there is no accident. How is this possible? Answer: All four cars made right turns.
PHOTO OF THE WEEK
Lake Crescent, Olympic National Park, Washington State.
FOOTNOTES AND SOURCES
2. The Wall Street Journal, January 22, 2021
3. The Wall Street Journal, January 22, 2021
4. CNBC, January 21, 2021
5. Earnings Scout, January 21, 2021
6. IRS.gov, October 1, 2020
7. RealSimple.com, December 12, 2018
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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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Horizon Weekly: Optimism Stimulates Markets
January 27, 2021