Lantern Wealth Advisors, LLC
35 Pinelawn Road
Suite 101E
Melville, NY 11747
(631) 454-2000

Major Indexes For Week Ended 1/4/2019

Index Close Net Change % Change YTD YTD %
DJIA 23,433.16 +370.76 1.61 -1,286.06 -5.20
NASDAQ 6,738.86 +154.34 2.34 -164.53 -2.38
S&P500 2,531.94 +46.20 1.86 -141.67 -5.30
Russell 2000 1,380.75 +42.83 3.20 -154.76 -10.08
International 1,736.69 +24.37 1.42 -314.10 -15.32
10-year bond 2.66% -0.08% +0.25%
30-year T-bond 2.97% -0.07% +0.23%
International index is MSCI EAFE index. Bond data reflect net change in yield, not price. Indices are unmanaged and you cannot directly invest in an index.

A Poignant Moment In Financial History Sparks Stocks

Federal Reserve Chairman Jerome Powell assured investors he was listening to them on Friday, and a stronger than expected number of jobs were added in December, sparking a 3.4% stock market surge, closing out another volatile week with a moment likely to be remembered in financial history.

A stronger than expected jobs report issued by the U.S. Bureau of Labor Statistics on Friday morning set off the sharp rally in stocks.

With 312,000 estimated to have been created in the economy in December, fears of a recession receded, triggering the surge in stock prices.

Then the Fed chair spoke at an annual meeting of the American Economic Association in Atlanta.

Though Mr. Powell shared the stage with his two predecessors, Janet Yellen and Ben Bernanke, Mr. Powell was the center of attention.

On December 19th, the Fed chair announced a quarter-point hike in interest rates, and a bear market in stocks immediately ensued— even though the economy is strong.

Friday's performance by Mr. Powell was an extraordinary display of transparency at a pivotal moment. Neil Irwin, an economics writer at The New York Times, introduced the nation's No. 1 central banker and immediately asked the nation's most influential financial official if he had made a mistake by raising rates.

"I think the markets are pricing in downside risk," Mr. Powell responded. "They're obviously well ahead of the data."

"Markets are expressing concerns about global growth. That's become the main focus. And trade negotiation, which are related to that, and I'll just say that we're listening carefully."

Mr. Powell added, "We're listening sensitively to the message markets are sending, and we're going to be taking those downside risks into account as we make policy moving forward. We will be prepared to adjust policy quickly and flexibly and use all of our tools to support the economy should that be appropriate."

"With the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves," Mr. Powell said.

Asked if he would resign if Mr. Trump asked him to, Mr. Powell replied simply, "No."

"I want the public to be assured that we have a strong culture, it's not a fragile one, it's not being disrupted," he said.

It was a poignant moment in financial history, displaying live in a video streamed on the Web, the independence of the Fed and its embrace of transparency.

Investors liked it. The Standard & Poor's 500 closed at 2531.94, up 1.9% from a week ago.

This article was written by a veteran financial journalist. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

Good Riddance To The Alternative Minimum Tax

Perhaps the most despised federal levy is the alternative minimum tax, which Congress passed in 1969 to prevent the loophole-savvy ultra-wealthy from shortchanging Uncle Sam.

Over the years, AMT's reach expanded to include households with more than $200,000 in AGI (adjusted gross income) annually and two-earner couples with children in high-tax states.

Under the new tax law, starting in 2018, the AMT's damage radius is reduced considerably. This alternative tax calculation still requires some individuals to calculate their tax bill twice - under regular rules and then the AMT's, and pay the higher sum. In 2018, though, a fraction of tax-filers will fall into the clutches of the dreaded AMT.

With the tax code rewritten, only about 200,000 tax filers are expected to be required to pay the AMT in 2018, way down from the 5.25 million, according to the Tax Policy Center.

Congress increased income exempt from the AMT calculation. This expands to $109,400 for joint filers, up from $84,500, and to $70,300 for individuals, up from $54,300.

The happy outcome is that the changes permit many more households making more than $200,000 to bid the AMT a not-so-fond farewell.

The above referenced information was obtained from reliable sources, however Lantern Investments, Inc. and Lantern Wealth Advisors, LLC cannot guarantee its accuracy. Opinions expressed herein are subject to change. Past performance is no guarantee of future results. Asset allocation and diversification do not assure a profit or protect against losses in declining markets. Any information given on the site is informational and illustrative but does not recommend actions as the information may not be appropriate to all situations. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. Links to other sites are provided for your convenience. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not endorse, verify or attest to the accuracy of the content of the web sites that are linked and accept no responsibility for their use or content. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not provide tax, accounting or legal advice.