Weekly Market Notes – January 11, 2021

For the Week of January 11, 2021

The Markets

Stocks closed higher Friday, with the S&P at a record high, despite the Capitol riots and a negative jobs report. Investors appeared buoyed by President-elect Joe Biden’s comment that he would support an economic stimulus package in the trillions of dollars, which would include unemployment benefits and rent forbearance. For the week, the Dow rose 1.66 percent to close at 31,097.97. The S&P gained 1.88 percent to finish at 3,824.68, and the NASDAQ climbed 2.45 percent to end the week at 13,201.98.

Returns Through 1/08/211 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.661.6610.709.6716.49
NASDAQ Composite (TR)2.452.4545.8923.8924.57
S&P 500 (TR)1.881.8819.7613.8417.06
Barclays US Agg Bond (TR)-0.94-0.946.415.124.10
MSCI EAFE (TR)3.163.1611.674.569.50
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

Long Term — The S&P 500 has gained an average of 10.9 percent per year (total return) over the past 50 years. The index has been positive in 16 of the last 18 years. Over the long-term, the S&P 500 has been up during 40 of the last 50 years (source: BTN Research). 

Jobless — The lowest (3.5 percent) and the highest (14.7 percent) unemployment rates in the United States in the last 50 years both occurred in 2020, and they took place just two months apart (source: Department of Labor, BTN Research).

Every Day — An estimated 10,800 Americans will turn 65 years old each day in 2021. That’s one every eight seconds. This group represents the 11th year of 19 years of baby boomers turning age 65. An estimated 11,500 Americans will turn 65 years old each day in 2029 (source: Government Accountability Office, BTN Research).

WEEKLY FOCUS – Quick Facts About the New Stimulus Package

In late December, Congress passed a $900 billion stimulus package, which included $600 checks to qualifying citizens. After initially refusing to sign the bill unless the checks were increased to $2,000, President Trump signed it. Although the House voted to increase the checks, the Senate didn’t pick up the vote, leaving the original package unchanged. Some highlights from the bill include:

The IRS and the Treasury have already started direct deposits. Recipients who don’t have direct deposit set up with the IRS will receive physical checks or Economic Impact Payment cards – provided the IRS gets to them by January 15. Those the IRS doesn’t get to by that cutoff date will need to claim a recovery rebate credit when they file their taxes.

Qualifications for this bill’s checks differ from the CARES Act in a few ways. Eligibility is determined based on 2019 tax returns (compared to 2018 or 2019 with CARES). To receive a full payment, an individual can’t have a 2019 adjusted gross income (AGI) above $75,000; married couples can’t have an AGI above $150,000, and a head of household’s AGI can’t be over $112,500. Eligible parents will receive checks for children under the age of 17.

People with higher incomes will receive a partial payment, which declines by $5 for every $100 of income over the full-payment limits. So, individuals with income of $87,000 and above and married couples filing jointly with $174,000 will not receive payments.

The IRS answers questions about the second stimulus checks and provides a tracking option at https://www.irs.gov/coronavirus/economic-impact-payments.

Other provisions from the 5,600-page bill include:

  • Individuals drawing unemployment benefits will receive an extra $300 a week through March 14.
  • Some hard-hit small businesses may be able to apply for a second Paycheck Protection Program loan.
  • Employers deferring payroll taxes under the President’s executive action have until the end of 2021 to increase employees’ withholding to pay back taxes owed.
  • The $300 above-the-line deduction for cash contributions to qualified charities is extended through 2021.

If you have questions on how the bill may affect you or other financial concerns, don’t hesitate to call.  

We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright January 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 3399750.1

Weekly Market Notes – January 4, 2021

For the Week of January 4, 2021

The Markets

U.S. stocks rose on the final trading day of a tumultuous year. Amid pandemic-related closures and a global recession, equities plunged into a bear market in February and March but quickly rebounded. The Dow and the S&P 500 broke their records Thursday, and the NASDAQ’s year-to-date gains were the strongest of the three indices. For the week, the Dow rose 1.35 percent to close at 30,606.48. The S&P gained 1.45 percent to finish at 3,756.07, and the NASDAQ climbed 0.66 percent to end the week at 12,888.28.

Returns Through 12/31/201 WeekYTD1 Year3 Year5 Year
Dow Jones Industrials (TR)1.359.729.729.9014.65
NASDAQ Composite (TR)0.6644.9244.9224.3922.12
S&P 500 (TR)1.4518.4018.4014.1815.22
Barclays US Agg Bond (TR)0.227.517.515.344.44
MSCI EAFE (TR)1.400.007.814.287.45
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.

I Need My Space — In 2020, 28 percent of the households in the United States were made up of just one individual living alone. Another 35 percent of households were made up of just two people, of which 65 percent (of the 35 percent) are a married couple (source: Census Bureau, BTN Research).

The Fed — Four of the six current members of the Federal Reserve’s Board of Governors – Richard Clarida, Randal Quarles, Michelle Bowman, and Christopher Waller – were appointed during President Trump’s four years in office. There remains one vacancy on the seven-member Board of Governors (source: Federal Reserve, BTN Research).

All for Exactly the Same Services — Private U.S. health insurance pays on average $241 for health care services for every $100 that Medicare pays and for every $72 that Medicaid pays (source: RAND, Health Affairs, BTN Research).

WEEKLY FOCUS – Why You Should Set Up Your Online Social Security Account

For many of us, Social Security plays an important part in our financial plans for retirement or later stage of life. So even if you’re years away from applying for benefits, there are good reasons to set up your online Social Security account at http://www.socialsecurity.gov/myaccount.

You can go online to ensure there aren’t any gaps in your earnings. Why is that important? Because the amount you receive from Social Security will be based on how much you’ve earned over your working career. Many people change jobs frequently, increasing the possibility an employer will fail to report their earnings, use the wrong Social Security number, or use an incorrect name. In fact, it’s estimated Social Security records have a 3 percent error rate.1 If there is a mistake, you’ll want to fix it as soon as possible, so you aren’t shortchanged when you finally apply for benefits.

You may protect yourself against fraud. By setting up an online Social Security account, you’ll prevent anyone else from doing so. Much like income tax fraud, identity thieves sometimes set up Social Security accounts and file for benefits using other people’s names. You don’t want to wait until you retire to find someone else is collecting your hard-earned benefits. The most effective way to prevent that is by creating your own account.

You can easily replace a lost or stolen Social Security card – for free. With an online account, there’s no need to sit through traffic to get to your local office and wait in line for a new card. You can also download a printable copy of your Social Security 1099/Benefit Statement, the tax form the Social Security Administration mails each year in January. No need to wait.

If you already receive Social Security, you can still benefit from having an online account. You can set up or change direct deposit or address information and get a benefit verification letter, which you may need if you’re applying for a loan. You’ll also be able to check the status of your Social Security benefit application from anywhere you can safely log in to your account.

If you’re wondering about the role of Social Security benefits in your retirement plans or how much income you’ll need in retirement, call our office. We can help you evaluate your financial plan to ensure you’re on track to work toward the retirement you envision.

  1. https://www.cbsnews.com/news/online-my-social-security-account-fights-id-theft/
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright January 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3388521.1