Markets Relax and Rally
BI-WEEKLY UPDATE - JANUARY 14, 2019
In This Issue
After months of volatility, markets relaxed a bit last week. For the first time since October, the S&P 500 went 5 days without a 1% gain or loss. [1] The Cboe Volatility Index, or VIX, also fell to lower than 20 - in December, it spiked above 35. [2]
For the week, the S&P 500 added 2.54%, the Dow gained 2.40%, and the NASDAQ increased 3.45%. All three indexes are in positive territory for 2019. [3] International stocks in the MSCI EAFE grew as well, with a 2.85% weekly gain. [4] 

What drove last week's gains?
Updates on trade and monetary policy contributed to investor decisions, yet again. [5]  

1. The Federal Reserve made dovish comments.
Last week, multiple Fed officials gave speeches indicating our central bank would carefully approach its interest rate decisions in 2019. Fed Chairman Jerome Powell described the policies as "flexible" and "patient." [6] 
 
2. A trade resolution seemed more likely.
Many investors believe that efforts to resolve trade tension between the U.S. and China made progress last week. On Wednesday, January 9, talks concluded in Beijing after three days of negotiations, and China said the "in-depth" meetings made a resolution possible. [7] The next day, U.S. Treasury Secretary Steve Mnuchin announced that a high-level Chinese policy advisor is coming to D.C. later this month for further talks. [8]  

What is ahead?
Last week's trade and policy headlines seemed to ease some of the risks on investors' minds. [9] However, both challenges and opportunities remain.

This week marks the beginning of U.S. corporate earnings season. Analysts have low expectations for companies' 4th-quarter performance, especially after a number of large corporations released warnings about their results. However, analysts still predict that S&P 500 companies experienced 14.5% profit growth. In addition, the generally sour, pessimistic mood surrounding earnings could support equities in two ways: 1) Investors may not react strongly if companies miss projections, and 2) any companies that have surprisingly good results could see stock price jumps. [10]   

Along with earnings results, investors will be paying close attention to companies' commentary on business in China. [11] Some experts believe Chinese economic growth is slowing, which is already affecting market performance. On Friday, markets stumbled a bit as analysts considered data and commentary on China's economy. These details will remain important to watch - and see how they relate to trade. [12]  

In addition, while the U.S. federal government shutdown has not yet had a large market impact, if it continues for too long, it could sizably affect the economy. [13]  

We will continue to monitor these and other financial perspectives as we determine where the markets are - and what may be on the horizon. If you have any questions, we're here to talk and listen.


ECONOMIC CALENDAR
Tuesday: PPI-FD
Wednesday: Retail Sales, Housing Market Index
Thursday: Housing Starts, Jobless Claims
Friday: Industrial Production, Consumer Sentiment


Blattel News
Calendar
January 21: Office Closed
Our office will be closed for MLK Day.
 
February 9, 2019: Client Breakfast Seminar: Special Tax Edition
Dan Mioli, SEI Director of Planning, will be sharing a special presentation on the tax law changes and how you can benefit. Invitations have been mailed and emailed. We will be taking reservations until February 1st. Please call our office or click here to RSVP

February 18: Office Closed
Our office will be closed for Presidents Day.

Tax Document Dates
For the 2018 tax year, the dates for printing and mailing recipient copies are as follows:
  • 1099-Rs (IRAs) available on:
    • SEI mail date: January 31
    • FCC mail date: January 31
  • 1099-Bs (non-Qualified) available on:
    • SEI mail date: February 15 &/or February 28
      • Will be produced & mailed in 2 batches; your mail date will depend on when SEI receives the information on the holdings within your account.
    • FCC mail date: February 15
Helpful phone numbers:
  • SEI - Call Us - 636-397-8303
  • First Clearing 1-800-727-0304
  • IRS help line 1-800-829-1040
If you or your tax preparer need us to help gather any information, please give us sufficient notice to fulfill your request. Please note that the new 2018 tax laws will mean a few new do's and don'ts, such as you don't need to report your advisory fees but you do need to report your Qualified Charitable Distribution amount. Check with your tax preparers to make sure you understand what is needed for your specific situation this year. Do not hesitate to call our office at 636-397-8303 with any questions.
 
Blattel & Associates does not provide tax advice.  Please consult with your tax advisor with regard to your personal situation.

Qualified Charitable Distribution Reminder
Some of our clients took a Qualified Charitable Distribution (QCD) in 2018. For those of you that did, we emailed out a reminder about your QCD as it applies to your tax return. Please note that you are responsible for telling the IRS about your QCD transaction(s) on your federal income tax return. Therefore, make sure to give your tax preparer your 2018 QCD amount, whether or not they specifically ask for it. Please contact our office if you have any questions.

Advisors Corner
Whether it's encouraging someone to learn a new hobby, exploring the world around us, or sharing the experiences of life, our advisors want to include you in their journeys. We will occasionally be posting articles and notes from our advisory team under the Advisor's Corner heading. And, after you read one of these articles, we would love to hear from you. What new endeavors are your trying? What recent experience have you had that others may learn from? Where has the travel bug led you?

magician_hat_wand.jpg
MAGIC 101
By Bob Blattel
 
Many of you know that I am an amateur magician, Order of Merlin. I recently learned of a way to share my love of magic with others - teaching at the library.

I will be teaching an adult course on magic for ages 14+ and older at the library. This course will be an introduction to magic and will help participants to entertain and fool their friends. See below for dates and locations:
  • O'Fallon Deer Run Branch: Wednesdays, January 16, 23, and 30th from 7pm to 8:30pm
  • Kisker Road Branch: Mondays, February 11, 18, and 25th from 7pm to 8:30pm
Classes are free, but I suggest bringing a deck of cards with you. Registration is required. You can register online at: youranswerplace.org. I'd love to see some familiar faces in the crowd.


"The key is not to prioritize what's on your schedule, but to schedule your priorities."
 
Stephen R. Covey

Perfect Pizza Popovers
6 servings

Ingredients: 
  • 3 - 4 Tbsp. butter or olive oil to grease pan
  • 4 large eggs
  • 1 Cup milk
  • ¼ Cup pre-made pizza sauce
  • 1 ½ Cups flour
  • ¼ tsp. salt
  • ½ tsp. onion powder
  • ½ tsp. garlic powder
  • ½ - 1 tsp. pizza seasoning (depending on taste)
  • 1 Cup shredded mozzarella (or try blending provolone, Asiago, or jack to total 1 cup)
Directions: 
  1. Preheat oven to 375°F. Grease a large, 6 cup popover pan (or a mini, 12-cup popover pan) with the butter or oil. Place the pan in the oven for 3 minutes to melt the butter. Once melted, remove the pan and spray the edges with cooking spray to prevent sticking.

  2. Using a medium-sized mixing bowl, beat the eggs, milk, and pizza sauce. Add in the dry ingredients and mix all until combined. Pour batter evenly into the popover pan. First, bake at 375°F for 10 minutes, then reduce to 350°F. Bake for 8 additional minutes (about 18 minutes in total).
     
  3. Once you remove the popovers from the oven, immediately add the cheese inside of the popover. Put the popovers back in the oven for about 5 minutes until puffy and golden. Let them cool a few minutes and enjoy! Note: If desired, sprinkle with fresh Parmesan and drizzle with olive oil.

Recipe adapted from Recipe4Living [14]
   

Tax Benefit and Credits: FAQs for Retirees *

Lots of questions can come up about income taxes after one has retired. Listed are answers to just a few common questions for retired taxpayers.

What types of income are taxable?
Some common types of taxable income: military retirement pay, all or part of pensions and annuities, all or part of Individual Retirement Accounts (IRA), unemployment compensation, gambling income, bonuses and awards for outstanding work, and alimony or prizes.

What types of income are non-taxable?
A few examples of non-taxable income: veteran's benefits, disability pay for certain military or government-related incidents, worker's compensation, and cash rebates from a dealer or manufacturer of an item you purchase.

Why is my pension taxed?
It depends on how the money was put into the pension plan. For example, if all the money was contributed by the employer or the money was not taxed before going into the plan, it would be taxable. When your contribution is from already-taxed dollars, that portion of the pension is not taxed, but must be recovered over your life expectancy.

* 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 advisor.


Tip adapted from IRS.gov[15]
Restorative Yoga - Long and Easy Stretching

Whether you have been curious about yoga, but have never tried it, or if you're a seasoned yogi and are looking for something new, restorative yoga has something for everyone. This gentle yoga uses props like blocks, blankets, and straps. Stretches and poses are held for a longer period of time, which can yield many benefits. Here are a few ways that restorative yoga can be beneficial for many people:
  • It can help with neck, low back, hip, and shoulder pain
  • It can help with insomnia
  • It is widely practiced by all ages and modifications are available
  • It can relax the mind and help with anxiety
  • It may help to cope with serious illnesses and life events
  • It may improve respiratory and circulatory function 

Check your local yoga studios or gyms to enroll in a restorative yoga class. If you can't find one, there are online yoga courses you can try. It might be a stretch worth taking (ask your doctor if yoga might be right for you).


Tip adapted from www.mindbodygreen.com[17]

Share the Wealth of Knowledge!
 
Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

 

 

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

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 average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

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[1]  www.cnbc.com/2019/01/11/stock-market-dow-under-pressure-as-investors-await-inflation-data.html

[2] www.bloomberg.com/news/articles/2019-01-11/well-that-was-fast-so-are-the-bulls-back-in-charge-now?srnd=markets-vp



[4]  www.msci.com/end-of-day-data-search

[5] www.reuters.com/article/us-usa-stocks/wall-streets-five-day-rally-flickers-out-as-earnings-near-idUSKCN1P51FS

[6] www.marketwatch.com/story/stock-futures-edge-lower-ahead-of-inflation-data-2019-01-11

[7] www.bloomberg.com/news/articles/2019-01-09/china-says-trade-talks-with-u-s-concluded-both-sides-serious

[8] www.marketwatch.com/story/stock-futures-edge-lower-ahead-of-inflation-data-2019-01-11

[9] www.reuters.com/article/us-global-markets/u-s-stocks-pause-after-five-day-rally-dollar-rebounds-idUSKCN1P503D

[10] www.reuters.com/article/us-usa-stocks-weekahead/slashed-profit-expectations-may-set-stage-for-gains-idUSKCN1P525B

[11] www.reuters.com/article/us-usa-stocks-weekahead/slashed-profit-expectations-may-set-stage-for-gains-idUSKCN1P525B

[12] www.cnbc.com/2019/01/11/stock-market-dow-under-pressure-as-investors-await-inflation-data.html

[13] www.marketwatch.com/story/stock-futures-edge-lower-ahead-of-inflation-data-2019-01-11

[14] www.recipe4living.com/recipes/pizza_popovers.htm

[15] www.irs.gov/pub/irs-pdf/p4190.pdf

[16]  practical-golf.com/golf-tips/

[17]  www.mindbodygreen.com/0-5289/15-Reasons-Why-You-Should-Try-Restorative-Yoga.html

[18]  www.greenamerica.org/green-living/eco-travel-checklist

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