Market Wrap
US stocks jumped last week, hoping the 90-day reprieve from the eye-popping tariffs between the US and China translate into a firm fair-trade agreement.
According to the Wall Street Journal, the S&P 500 and the Dow are now positive for the year, with the S&P 500 jumping 5.06% last week and the Dow 3.30%.
Nasdaq is approaching the flat line for 2025, moving higher 6.97% last week. The Small Cap Russell 2000 rose 4.42%, however it is still down (5.27%) Year-To-Date.
Over the pond, foreign stocks trailed US stocks, rising 1.38%. Emerging Market stocks were up 2.95%.
Bonds yields remained range-bound with the 10-Year US Treasury yield ending the week 4.445%.
Now that we are close to the flatline for the year, tariff progress, taxes, and time are paramount. Actual results will eventually matter most, perhaps in the not-so-distant future?
Aaa, No More
Last Friday, after the markets closed, Moody’s downgraded US debt from Aaa to Aa1. Moody’s is now in line with other major rating agencies who downgraded our debt a
few years back.
I am surprised it has taken this long. How can a government, a business, or your personal situation have an Aaa rating when increased borrowing each year is necessary, just to pay the bills?
The short-term impact on stocks? Expect some pressure, especially after a strong
US stock market rally. The short-term impact on bonds? I expect interest rates to
move higher at least initially.
Social Security Survivor’s Benefit
Over the weekend, a major investment periodical included comments about The
Trump Administration’s desire to cut wasteful spending. As an example of wastefulness, it mentioned that you are not permitted to collect a Social Security Survivor’s benefit if you remarry. In reality, you are permitted to collect a Social Security Survivor benefit provided you do not remarry prior to age 60.
Survivor Benefit is one of the most misunderstood benefits, especially if one becomes a widow/widower prior to their Social Security Full Retirement Age (FRA).
I have been working with clients and their Social Security since 2008. I have contacted the Social Security administration with clients over the phone, in-person and via mail. Getting through in a timely manner has always been a challenge. I have experienced several clients receiving inaccurate information and oftentimes, unsolicited inaccurate advice.
If we are going to reduce Social Security personnel, I hope the remaining workers will be accurately trained and there is a system that will not have one waiting for 45 minutes plus on hold.
For your Social Security “retirement benefits,’ most all requests can be completed on-line except for a survivor benefit. The survivor benefit must be applied for, either over the phone or in-person. The sad part about applying for a survivor benefit is the wait time. I had clients call to make the telephone appointment, scheduled for 2 months out. This is prior to talking about staff reductions!
Tax Bill Progress
Last Friday, a handful of Republicans in the House of Representatives blocked President Trump’s tax bill. They suggested it did not do enough to cut spending. By
the end of the weekend, the holdout Republicans acquiesced as expected. Political pressure outweighed fiscal responsibility, as usual.
This tax bill is extremely important to all of us. It will determine our tax rules for at
least a handful of years.
When the bill and its provisions become clear, we will be discussing implications and opportunities. I am hoping sooner than later to assess client impact and to plan appropriately.
When did income taxes begin? 1913 was the first year “Income Taxes” were assessed. Taka a peak at the first United States Income Tax return. Click here to see the 1913 Form 1040 Return. Very interesting! Click Here
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All data sourced from Wall Street Journal, May 16, 2025.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time.
