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.}

Rising concerns about further rate hikes sent stocks lower to kick off the second half of trading.

The Dow Jones Industrial Average lost 1.96%, while the Standard & Poor’s 500 retreated 1.16%. The Nasdaq Composite index surrendered 0.92% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, tumbled 2.57%.^1,2,3

Stocks Slide

Stocks were dragged lower last week by news reigniting fears of additional interest rate increases. It started with the minutes from June’s Federal Open Market Committee meeting, which revealed a majority of voting members supported at least two more rate hikes. But a strong employment report from Automated Data Processing (ADP), a payroll processor, unnerved investors, sending stocks lower and bond yields higher.

Markets stabilized after Friday morning’s federal government’s monthly employment release showed a less-than-expected increase in nonfarm payrolls. But stock prices turned down in the afternoon, adding to the week’s losses.

Mixed Labor Market Signals

Wall Street was rattled by an unexpected surge in new private-sector jobs last Thursday. ADP reported private sector employers had added 497,000 jobs in June, blowing away the consensus estimate of 220,000. Leisure and hospitality led the gains with 232,000 new hires, followed by construction (97,000).⁴

Friday’s release of monthly employment data painted a more moderate picture, with 209,000 new jobs added in June, well below the estimate of 240,000 and May’s downwardly revised total of 306,000. Friday’s report added to data released earlier in the week (a decline in job openings and a rise in jobless claims) that suggested that the labor market may be cooling.⁵

This Week: Key Economic Data

Wednesday: Consumer Price Index (CPI).

Thursday: Producer Price Index (PPI). Jobless Claims.

Friday: Consumer Sentiment.

^{Source: Econoday, July 7, 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

Thursday: Delta Air Lines, Inc. (DAL), Pepsico, Inc. (PEP), Cintas Corporation (CTAS).

Friday: JPMorgan Chase & Co. (JPM), UnitedHealth Group Incorporated (UNH), Citigroup, Inc. (C), Wells Fargo & Company (WFC), BlackRock, Inc. (BLK).

^{Source: Zacks, July 7, 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.}

“Self-pity in its early stages is as snug as a feather mattress. Only when it hardens does it become uncomfortable.”

– Maya Angelou

IRS Program Helps Seniors Prepare Taxes

The Internal Revenue Service (IRS) has a tool called Free File, which offers online tax preparation, direct deposit of refunds, and electronic filing choices. This tool can be helpful for taxpayers on a fixed budget, including seniors and retirees. Here are some things to know about the tool:

• IRS Free File can be found at IRS.gov and features some big names in the tax software provider world.
• To use the tool, taxpayers can browse multiple offers.
• The eligibility standards for using Free File depend on the tax partner, but they are usually based on income, age, and state residency.
• Free File has a majority of the most common forms needed when filing your taxes. Even if you have a unique tax situation, you may still be able to use Free File.
• Some Free File products are available in Spanish.
• You can also search for credits and deductions in Free File.
• Some providers in Free File also offer state return preparation. You can use the lookup tool in Free File to find the tax partner that might be appropriate for your state requirements.
• Taxpayers can access Free File through their computers, smartphones, or tablets. The site is designed for mobile usage.

*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

Aloe Vera: One Powerful Plant

Aloe vera is one of those medicinal plants that can be used for almost everything. It is a cactus-type plant that grows well in many climates and has thick, juicy leaves that store water. Because of this, aloe vera is loved for its hydrating properties. Let’s look at some of the many benefits of aloe and how you can include it in your daily routine.

The thick, sticky gel that is in aloe leaves has some powerful bioactive compounds, including vitamins, minerals, amino acids, and antioxidants.

Aloe vera is also known for its healing properties. It may help heal wounds and treat skin problems with its antibacterial, antiviral, and antiseptic properties. Also, it can be used as a topical treatment for first and second-degree burns.

Lastly, aloe vera might also help lower blood sugar levels by enhancing insulin sensitivity and improving blood sugar management. There has been some preliminary evidence that aloe vera may have benefits for people with prediabetes or type 2 diabetes.

Tip adapted from Medical News Today⁷

What lives above a star but never burns, has 11 neighbors, and can replace the letters P, Q, R, or S in some cases?

Last week’s riddle: What 9-letter word remains an English word each time you remove a letter from it until it becomes a 1-letter word? (Hint: You can remove letters from any part of the word.)  Answer: Startling (Starting, Staring, String, Sting, Sing, Sin, In, I).

Antarctic Peninsula, Antartica

Footnotes and Sources

^{1. The Wall Street Journal, July 7, 2023.}

^{2. The Wall Street Journal, July 7, 2023.}

^{3. The Wall Street Journal, July 7, 2023.}

^{4. CNBC, July 6, 2023.}

^{5. CNBC, July 7, 2023.}

^{6. IRS.gov, January 23, 2023}

^{7. Medical News Today, February 15, 2023}

Stocks posted gains for the week to close out a stellar month, aided by positive economic data and reports that all major banks had passed the Federal Reserve’s annual stress test.

The Dow Jones Industrial Average gained 2.02%, while the Standard & Poor’s 500 rose 2.35%. The Nasdaq Composite index added 2.19%. The MSCI EAFE index, which tracks developed overseas stock markets, increased by 0.76%.^1,2,3

Stocks Climb As Recession Fears Ease

Investors shrugged off weekend news of a short-lived insurrection in Russia and calls later in the week for more restrictive monetary policies from global central bankers.

What powered early-week gains? New home sales, durable goods orders, and a rise in consumer confidence proved influential. More so were Thursday’s reports of a drop in initial jobless claims and an upward revision in first quarter Gross Domestic Product growth, which helped allay recession fears. The results of the Fed’s annual bank stress tests, which all major banks passed–further emboldened investors.

Stock prices rallied Friday following an encouraging inflation report, capping the end to a solid week, month, and first half.

Global Central Bankers Meet

At last week’s European Central Bank Forum, central-bank governors from around the world gathered to discuss their monetary outlook and the policies needed to manage inflation amid unexpected economic strength.

Fed Chair Powell reiterated that more rate hikes were coming owing to a robust labor market. He added that he wouldn’t dismiss the idea of hiking rates at consecutive Federal Open Market Committee (FOMC) meetings. While saying there is a possibility of an economic downturn, Powell didn’t believe it was the most likely case.

Meanwhile, bankers from the European Central Bank and the U.K. echoed Powell’s comments, declaring that further rate hikes are needed to tame their still-elevated inflation rates.⁴

This Week: Key Economic Data

Monday: Purchasing Managers’ Index (PMI) Manufacturing. Institute for Supply Management (ISM) Manufacturing Index.

Wednesday: Factory Orders. FOMC Minutes.

Thursday: Automated Data Processing (ADP) Employment Report. Jobless Claims. Institute for Supply Management (ISM) Services Index. Purchasing Managers’ Index (PMI) Composite. Job Openings and Turnover Survey (JOLTS). 

Friday: Employment Situation.

^{Source: Econoday, June 30, 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

Thursday: Seven and I Holdings Co., Inc. (SVNDY), Levi Strauss & Co. (LEVI)

^{Source: Zacks, June 30, 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.}

“Only with a burning patience can we conquer the splendid city which will give light, justice and dignity to all mankind.”

– Pablo Neruda

Can You Claim The Child Tax Credit For Other Dependents?

Even though you may not be able to claim the child tax credit, you may be able to claim the credit for other dependents under your care. The Internal Revenue Service issues a max of $500 for each dependent who meets specific conditions.

These conditions include:

• Dependents who are age 17 or older on December 31 of the tax year.
• Dependents who have individual taxpayer identification numbers.
• Dependents living with the taxpayer for more than six months of the year (remember the special rules for divorced or separated parents or parents who live apart).

The credit begins to phase out when the taxpayer’s income exceeds $200,000. This phaseout begins for married couples filing a joint tax return at $400,000.

*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.gov⁵

Yoga For Stability

You don’t have to pull out the yoga mat and get your designer leggings on to enjoy this relaxing practice’s many benefits. Even if you’ve never done yoga before, these poses may help you improve your balance and stability:

• Knee to Chest – Start by standing with your feet hip-width apart with your hands on your hips; this is called mountain pose. Now, lift your left knee to hip height so your upper leg (thigh) is parallel with the floor. Flex your left foot and hold this pose for three deep breaths. Repeat on the other side.
• Tree Pose – Start with the same mountain pose as the first movement. Now, shift your weight into your left foot, and allow your right knee to turn out to the side as you bring your right foot in to rest at your left ankle, shin, or thigh, depending on what’s comfortable. Make sure you’re not putting your foot on the joint itself.
• Dancer Pose – Start in mountain pose. Bend your right knee and slowly lift your right foot off the ground. As you do that, lift your left arm to balance yourself. Hold for three breaths and repeat on the other side.

Tip adapted from SilverSneakers.com⁶

What 9-letter word remains an English word each time you remove a letter from it until it becomes a 1-letter word? (Hint: You can remove letters from any part of the word.)

Last week’s riddle: 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?  Answer: Two nickels and a 50-cent piece.

Al Khazneh (The Treasury), Petra, Jordan.

Footnotes And Sources

^{1. The Wall Street Journal, June 30, 2023.}

^{2. The Wall Street Journal, June 30, 2023.}

^{3. The Wall Street Journal, June 30, 2023.}

^{4. CNBC, June 28, 2023.}

^{5. IRS.gov, October 18, 2022.}

^{6. SilverSneakers.com, February 15, 2023.}

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}