The Week on Wall Street
Last week, the Federal Reserve cut interest rates for the first time in more than a decade, in line with Wall Street’s expectations. Ironically, stocks had their worst week of 2019.
The S&P 500 finished the week 3.10% lower. The Dow Jones Industrial Average and the Nasdaq Composite also posted weekly losses; the blue chips fell 2.60%, while the premier tech benchmark slumped 3.92%. International stocks tracked by MSCI’s EAFE index dipped 1.06%.
Fed Cuts Benchmark Interest Rate
On Wednesday, the central bank reduced the federal funds rate by 0.25%. The latest Fed policy statement noted that “global developments” and “muted inflation” influenced the decision.
Addressing the media, Fed Chairman Jerome Powell described the cut as a “mid-cycle adjustment.” After that comment, Wednesday’s trading session turned volatile on the interpretation that the cut was a “one and done” move, instead of what might be the first in a series.
More Tariffs Planned
Shares also fell Thursday, after a White House tweet indicated that the U.S. would put a 10% tariff on another $300 billion of goods coming from China, effective September 1.
Practically speaking, this would mean a tariff on nearly all Chinese products arriving in America. So far, the announcement has not affected plans for trade delegates from both nations to continue negotiations in September.
The Latest Hiring Data
Payrolls expanded with 164,000 net new jobs in July, according to the Department of Labor. The headline jobless rate stayed at 3.7%; it has now been under 4% for 17 months. The U-6 jobless rate, which counts both underemployed and unemployed Americans, dipped to 7.0%, a level unseen since December 2000.
Monthly job growth has averaged 140,000 over the past three months, compared to 187,000 in 2018.
The Week Ahead: Key Economic Data
- Monday: The Institute for Supply Management releases its latest Non-Manufacturing Purchasing Managers Index, its monthly gauge of business activity in America’s service sector.
Source: Econoday / MarketWatch Calendar, August 2, 2019
The Econoday and MarketWatch economic calendars list 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.
The Week Ahead: Companies Reporting Earnings
- Monday: Marriott International (MAR), Tyson Foods (TSN)
- Tuesday: Walt Disney Co. (DIS)
- Wednesday: American International Group (AIG), CVS Health (CVS)
- Thursday: Booking Holdings (BKNG), Uber (UBER)
Source: Zacks, August 2, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. 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.
“Friendship is born at that moment when one person says to another, ‘What! You too? I thought I was the only one.'”
Recipe of the Week
Amish Sugar Cookies to Share
- 1 cup butter, softened
- 1 cup vegetable oil
- 1¼ cups sugar
- 1¼ cups confectioners’ sugar
- 2 large eggs
- 1 tsp. vanilla extract
- 4½ cups flour
- 1 tsp. baking soda
- 1 tsp. cream of tartar
These cookies are so easy to make and the perfect dessert to share with friends. They’re sweet, soft, and perfect to go around. Have a family BBQ, school meeting, or book club coming up? Wow the crowd at your next gathering with these sweet treats.
- In a large bowl, mix together the butter, oil, and sugar until blended. Mix in the eggs and vanilla, and blend.
- Combine the dry ingredients (flour, baking soda, cream of tartar) and gradually add to the wet mixture until smooth.
- Measure out a spoonful of dough and place it on an ungreased baking sheet. Bake at 375° F for 8 to 10 minutes or until golden. Chill and serve!
Recipe adapted from Taste of Home
Roth vs. Traditional IRAs: What’s the Difference?
Anyone who has earned income and is younger than 70½ can contribute to a Traditional IRA. Roth IRAs have income eligibility limits for contributions. Single filers can’t earn more than $137,000, and married couples can’t earn more than $203,000.
Traditional IRA contributions are generally tax deductible when you make the contributions, and withdrawals in retirement are taxed at the current income tax rate. Contributions to a Roth IRA aren’t tax deductible, but earnings and withdrawals are generally tax free.
Traditional IRAs require you to start taking minimum distributions at age 70 ½. Roth IRAs don’t have any required minimum distributions.
Deciding which retirement savings account is right for you is a personal decision and will depend on your income tax bracket (both now and when you retire), your income, and other criteria. A skilled financial advisor can help you decide which option, if any, is right for you.
* 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.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Tip adapted from IRS.gov
Stick Your Finish
To achieve this for yourself, make sure you stick your finish throughout your whole swing and put the majority of your weight in your front foot. Not only will this help stop you from topping the ball, but it will give your shot the maximum amount of power through that front leg. You should also be driving power through your hips and glutes, not your momentum or lower back. This will help you stick your finish like a champ (and protect your back)!
Tip adapted from Golf Digest
Eat This, Not That: Easy Food Swaps Anyone Can Do
- 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)
There are lots of healthy swaps, like these, that can help you reduce your caloric intake, consume less sugar, and make it easy to create a more-balanced meal.
Tip adapted from Eat This, Not That
Composting 101: Turn Waste Into Reward
It’s easy to compost at home. All you need is a compost bin, which you can make yourself or buy online. Compost bins usually need to turn in order to aerate the waste.
You can compost lots of items, including:
- Wood chips and pellets
- Table scraps
- Shredded newspaper
- Leaves and yard waste
- Dryer lint
The mulch made from these compostable materials is great for your garden because it helps aerate the soil, break down organic material for plant use, and ward off plant disease. It also offers a natural alternative to chemical fertilizers, reduces landfill waste, and may help to prevent global warming and climate change.
Tip adapted from Earth Easy