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Major Indexes For Week Ended 10/5/2018

Index Close Net Change % Change YTD YTD %
DJIA 26,447.05 -11.26 -0.04 +1,727.83 6.99
NASDAQ 7,788.45 -257.90 -3.21 +885.06 12.82
S&P500 2,885.57 -28.41 -0.97 +211.96 7.93
Russell 2000 1,632.11 -64.46 -3.80 +96.60 6.29
International 1,927.14 -46.46 -2.35 -123.65 -6.03
10-year bond 3.22% +0.16% +0.81%
30-year T-bond 3.40% +0.20% +0.66%
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.


Fed Chair: "We Remain In Extraordinary Times."

Not since the 1950s, Federal Reserve Board Chair Jerome Powell said this week, has inflation and unemployment remained so low for so long.

Speaking in Boston on Tuesday, Mr. Powell depicted a throwback to economic conditions seen only briefly in post-War U.S. history, and fresh data released Thursday and Friday reinforced Mr. Powell's "remarkably positive outlook."

In the 88% of the U.S. economy outside of the manufacturing sector, purchasing activity soared in September, climbing to the highest level since inception of the index in January 2008. According to Thursday's report from the Institute for Supply Management, the forward-looking new orders component of the index slowed slightly from August but remained very strong.

Purchasing activity, at the 12% of the economy in manufacturing, also remained in record territory.

In the three decades since purchasing activity in the manufacturing sector was first collected monthly by the ISI in January 1989, the index rarely has been as high as in September.

Meanwhile, the Labor Department said on Friday that unemployment, from its record low in August, ticked lower in September— as low as it's been since 1969.

Remarkably, core inflation, which excludes volatile monthly expenses from a consumer's monthly expenses, didn't budge. Growth without wage inflation accurately describes economic conditions currently, and in his speech, Mr. Powell said he expected more of the same in the months ahead. Core inflation has been "anchored" at 2% for 20 years.

"We remain in extraordinary times," Mr. Powell said in his concluding published remarks at Tuesday's annual gathering of business economists. "I am glad to be able to stand here and say that the economy is strong, unemployment is near 50-year lows, and inflation is roughly at our 2% objective. The baseline outlook of forecasters inside and outside the Fed is for more of the same."


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. 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.


Your Alma Mater Or Your Family?

The new tax law doubles what you can leave loved ones' tax free when you die and that's really bad for your alma mater. Tax breaks for donations to your alma mater may no longer make the grade with you. Here's why:

Estate Tax Exemption Rises. The Tax Cuts And Jobs Act (TCJA) doubles a married couple's estate's tax-exemption to $22 million. Alums now want to maximize their exemptions by leaving $22 million to their children, nieces, nephews and other loved ones before even thinking about a donation to favorite old schools.

Larger Standard Deduction. The TCJA upped the standard deduction from $13,000 to $24,000 for married couples and most Americans no longer will itemize deductions. But that also means you no longer may deduct college donations. Younger alumni will never get into the habit of contributing to their alma mater, disrupting the finance of U.S. educational institutions.

Athletic Deduction Nixed. Before the TCJA, many colleges targeted contributions from alumni who might qualify for good seats at games. The old law allowed donors to deduct 80% of such gifts. Now, the deduction is zero.

Taxing Endowments. Under the new tax code, schools with endowments of $500,000 per student or more and 500 students or more face a 1.4% levy on income. Only a small number of schools are subject to this new tax, but it is a consideration in making college donations.

The Plus Side. The TCJA is not entirely bad for all education-minded donors. Some plusses:

  • If you itemize, you may now deduct up to 60% of your adjusted gross income on donations to qualified charities, including your old school. That's up from 50%.
  • You can "bunch" donations you pledge to give over several years. The deduction can exceed the write off under the standard deduction.
  • You can contribute via a donor-advised fund, which entitles you to a large immediate deduction on annual donations you pledge to make over a period of years. If you suddenly strike it rich, this is a great way to go.

Old Ivy has been around since before the income tax and has managed to flourish, but the new economics of supporting education is disrupting the finances of major educational institutions and the effects are yet to be felt. If you have questions about donating money to a school or your priorities in planning your estate, please contact us.


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.