Markets Start Positive…
Thanks to Federal Reserve!
Most prognosticators have been saying the Market needs the Fed to back off raising rates and we need resolution to our China Tariff and Intellectual Property Rights issue. I certainly agree these are necessary, however both issues will impact the Markets and the economy in the shorter run. Longer run, there are other, more significant issues I’ll discuss in an upcoming Blog that will focus on the realities of our debt and the real status of the Global Economy longer term.
Federal Reserve Walks It Back!
Last week, Jerome Powell did, in fact, walk back his aggressive posture on the future of interest rate rises. He came out and stated the Fed will now be flexible with monetary policy and is in no hurry to raise rates. That by itself, sent the Markets up over 3% last Friday, the same day he made the statement. I do agree, the Fed needs to be very careful in what it says AND its interest rate policy. This is significant to the future of our Markets. The bouncing back and forth of the Federal Reserve’s opinion and statements is not what we need. Again, do you miss Janet Yellen?
China Talks and Apple
This week the US and China will again attempt to find resolution to our trade war. The results will certainly be impactful in our Markets and economy. I can only hope this war will end sooner than later and in a way that is truly constructive, not a band-aide. Apple informed us last week, they have not sold as many new iPhones as expected and lowered their revenue guidance fairly significantly, blaming this mostly on China. Assuming they are correct, it’s a real example of the impact this trade war is starting to have on Corporate America. Apple’s stock is now far away from its high of 223 per share, currently trading @ 148.26 per share, as of last Friday’s close. When we begin to hear 4th Quarter Corporate Earnings in a few weeks, we’ll further hear about the real impact so far!
The markets all finished in the black to start the year! The Dow Jones Industrial Average is up .45%, the S&P 500 1.00%. The Nasdaq Composite is positive by 1.56% and the Russell 2000 is the current leader up 2.39% so far, this short year.
Bonds as measured by the Barclays Aggregate Bond Index are positive by .46%.
Over the pond, the MSCI EAFE International Stock Market Index is up .98% in 2019 and the MSCI Emerging Market Stock Index off a slight (.07) %.
IRA/Roth IRA Contribution Limits: The contribution limits have increased from $5,500 to $6,000 per year for those under age 50. Age 50 plus can contribute an additional $1,000 catch up contribution bringing the total up to $7000.
401K/403B Contribution Limits: These have increased from $18,500 to $19,000 per year for those under age 50. Age 50 plus can contribute an additional $6,000 catch up contribution bring the total in 2019 up to $25,000.
Standard Deduction Limits: For 2019 a “single” filer will have a $12,200 deduction and a “married, filing joint” filer will have a $24,400 deduction. Over age 65, each taxpayer can receive an additional $1,300 standard deduction.
*For a chart of the new limits for Income Taxes, Standard Deductions, Capital Gain Rates, Social Security, Medicare costs, please click here 2019 Preliminary Key Financial Data to review our Key Financial Data for 2019!
Question of the Week
IRA’s were established in 1974 and became available in 1975. In 1975, what was the maximum amount an individual could contribute to an IRA?
2019 Educational Workshops
We are now set for our 3 Educational Workshops for the Winter/Spring of 2019. For a listing of Retirement Income Planning/Tax, Social Security and Medicare Workshops, please click here Retirement Refined.