November Markets – Tax Changes

November appears to be shaping up as a strong month for the stock and bond markets.  After 3 challenging months prior, a welcome reprieve.

This Tuesday we’ll hear the October Consumer Price Index (CPI) report, followed by the Producer Price Index (PPI) and Retail sales reports on Wednesday.  Tame numbers will be welcomed by the markets.

Earnings reports are winding down for the 3rd quarter.  This week we’ll hear results from Home Depot, Target, Walmart and Tyson Foods.  What they may say about consumer spending may be important.

Last Friday, after the markets closed, Moody’s placed the United States Debt on credit watch.  No reason to panic.  It will however place a sharper magnifying glass on Congress, as they attempt to pass another new short-term spending bill.

This will be the first test for new House Speaker Mike Johnson.

2024 Tax Changes

Last week, the IRS announced tax changes for 2024.  A couple highlights:

  • Standard Deduction increases to 14,600 for singles and 29,200 for couples filing jointly.  Those over 65 receive an additional 1,500 per person.
  • Annual Gift Exclusion is increasing from 17K to 18K. 
  • The amount that each of us can pass down without Federal Estate Tax is increasing from 12.92 million to 13.61 million. (How much longer will this last?)
  • IRA contribution limits are increasing from 6,500 to 7,000.  Over 50 is now 8,000 including the 1,000 catch-up.
  • 401K contribution limits are increasing from 22,500 to 23K.  Over 50 is now 30,500 including the 7,500 catch-up.
  • Qualified Charitable Contributions (QCC) annual limits are increased from 100K to 105K.

We will soon be releasing our annual “Preliminary Key Financial Data”.  Each year we release it towards the end of November, early December.  The document will summarize all intended changes for taxation for 2024. 

A good idea is to download our 2023 Key Financial Data from our website (click here) and then later compare it directly to the 2024 Preliminary Key Financial Data when available.

Planning ahead can make excellent tax sense.

Markets Last Week

Last week witnessed a mixed market as the Dow rose .65%, the Nasdaq 2.37% and the S&P 500 1.31%.  Moving the opposite direction was the Russell 2000, moving lower by (3.15%).  Foreign and Emerging market stocks joined the Russell 2000 moving lower marginally by (.89%) and (.29%) respectively.

Oil moved lower for the week, moving down from 80.89/barrel to 77.35.

The yield on the 10-year US Treasury moved higher, ending the week @ 4.646%.

The markets were on pace to have a better week, until Fed Chair Powell’s somewhat hawkish comments on Thursday. 

Looking forward, we’ll be keeping an eye on the results and reaction to our new Treasury issuance.  For the short-term, the results will be a significant input to the level of interest rates.  And keep in mind, for now, it’s all about rates!!

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