October should be a month that sheds a lot of clues about our short-term future:
- Starting with the 2 pending bills in the House, we hope to have resolution. The result will have a significant outcome. Hopefully, either way, this is finalized this month.
- This Friday, we’ll hear the jobs report for September. The consensus estimate is we created around 300,000 jobs in September, down from August’s disappointing gain of 235,000 jobs. This was a huge falloff from July and June, when 1.05 million and 962,000 jobs were added, respectfully. It’s no secret there are many job openings with many applicants.
- The Fed has indicated they will begin pairing back the monthly $120 billion of bond purchases. We should have more clarity as to the specifics soon. Already, we are seeing US Treasury rates starting to nudge higher with mortgage rates following suite. Certainly, higher rates will impact the housing market that’s still on fire. I’m starting to see more listings pop-up, with a slower sales turnaround. If higher rates persist, it will be interesting to see what happens to pricing.
- Covid: Seems to no longer be front and center in the news on a daily basis. Interesting! A lot can happen, hopefully better than not! I’m leaning that way!
- Supply issue impact – I’m hopeful that sometime this month we’ll see resolution on the chip shortages & the backlog of ships attempting to dock to unload containers.
- Corporate Profit Reports: In a couple of weeks, we’ll hear from Corporate America informing us of 3rd quarter profits…. Of significant importance is to hear forecasts going forward. Most companies are dealing with much higher input costs, including energy, labor and cost of supplies. Company performance going forward will be impacted by everything mentioned above, and is always most important!
Leading into October, the markets pulled back last week with the Dow dropping (1.36%), the S&P 500 (2.19%), the Nasdaq Composite (3.19%) and the Russell 2000 (.24%). International stocks all fell with foreign stocks losing (3.11%) and Emerging market stocks (1.40%).
Bond yields moved higher with our 10 Year US Treasury yield at 1.477% this morning. Last week the 10-year moved temporarily over 1.50%. This is worth watching!
Required Minimum Distribution (RMD) Reminder
For taxpayers age 72 and older, please make sure you withdraw the required minimum from your retirement accounts prior to year-end.
If you turn age 72 this year, you are permitted to not take your RMD this year. Next year (2022), however, you’ll need to take your 2021 RMD by April 1, 2022, and then your 2022 by December 31, 2022.
In addition, those who are the owners of a Beneficiary or Inherited IRA, you must take your RMD by year end, if the decedent passed prior to 2020. If the decedent passed in 2020 or 2021, you are not required to take an RMD under the new Secure Act rules.
Keep in mind, the penalties for not taking your entire Required Minimum Distributions are significant. If you have any questions, please let us know.