Stock markets opened with a good tone today before giving back their gains as this week's economic news started to come into focus. We can expect to hear much about Federal Reserve Chairman Powell's testimony to both the House and the Senate on Tuesday and Wednesday. Friday also brings another look at the employment situation, with most expecting a slightly softer number for the February survey.
A late-week surge, triggered by reassuring Fed-speak, propelled stocks higher last week.
The Dow Jones Industrial Average gained 1.75%, while the Standard & Poor’s 500 advanced 1.90%. The Nasdaq Composite index picked up 2.58% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.81%.1,2,3
Stocks Resume Climb
After rebounding to start the week, stocks weakened following higher inflation numbers out of Europe and higher-than-expected manufacturing activity.
Stocks continued their decline into early Thursday following a report of higher labor costs and low initial jobless claims. But stocks staged an afternoon relief rally on Thursday following comments by Atlanta Fed President Raphael Bostic that he was “still very firmly” supportive of increasing rates in quarter-point increments. The climb in stocks was remarkable, given that yields on 10-year Treasuries reached their highest level since November. Undeterred by a strong services data report, the upside momentum continued into the final trading day and added to the week’s gains.4
Disconcerting Economic Data
It was a relatively quiet week for economic news, but several new economic data reports gave insights into overall activity. U.S. manufacturing activity contracted in February–the fourth consecutive month it has done so. While this may eventually justify a reason for moderating future rate hikes, the activity exceeded analysts’ expectations. An accompanying survey of manufacturers pointed to improving demand and potentially accelerating price pressures.
Meanwhile, China reported an outsized jump in manufacturing activity, which may help relieve remaining supply chain kinks. But the report may also fuel commodity price increases and influence global inflation. Inflation remained a persistent issue in Europe, as February’s Eurozone inflation read was hotter than anticipated.
This Week: Key Economic Data
Monday: Factory Orders.
Wednesday: Automated Data Processing (ADP) Employment Report. Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Jobless Claims.
Friday: Employment Situation.
Source: Econoday, March 3, 2023
This Week: Companies Reporting Earnings
Tuesday: Dick’s Sporting Goods, Inc. (DKS), CrowdStrike (CRWD).
Wednesday: MongoDB, Inc. (MDB).
Thursday: Ulta Beauty, Inc. (ULTA), DocuSign (DOCU).
Source: Zacks, March 3, 2023
"Your time is limited, so don't waste it living someone else's life."
– Steve Jobs
Outstanding Tax Bill? Consider an Offer in Compromise
An Offer in Compromise is a federal tax program allowing taxpayers to enter into an agreement with the IRS to settle their tax debt for less than they owe. This agreement is an option when taxpayers can't pay their full tax liabilities or when paying the entire balance owed would cause financial hardship. The goal is a compromise that suits the best interests of both parties.
The IRS considers various circumstances when reviewing OIC applications, including the applicant’s:
There is also an application to apply for an OIC. Taxpayers who meet the definition of a low-income taxpayer don't have to pay this fee.
*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.
Tip adapted from IRS.gov5
It's All in a Walk: 3 Tips for Integrating Walking Into Your Day
Getting more movement is always a good idea, but finding the time to fit a walk into your day can be hard. These tips will make it easier to get up and get moving:
Tip adapted from Help Guide6
We know that a seahorse isn’t a horse, and we know that a silverfish isn’t a fish. For that matter, a snakehead isn’t a snake – but what is it?
Last week’s riddle: About 90% of this country’s land area is made up of arid tan desert, yet its flag was once solid green (until 2011) – in fact, at one time it was the only nation in the world with a flag containing just one color. What nation is this? Answer: Libya.
Corvin Castle, Romania, Transylvania
Footnotes and Sources
2. The Wall Street Journal, March 3, 2023
3. The Wall Street Journal, March 3, 2023
4. The Wall Street Journal, March 2, 2023
5. IRS.gov, October 18, 2022
6. HelpGuide.org, November 1, 2022
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Weekly Market Insights: Fed’s Reassurance Boosts Stocks.
March 06, 2023