By: Sean Schmid, Chief Operating Officer – Penn Investment Advisors
Weekly Update – December 8, 2020
The Week on Wall Street
Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package.
The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor’s 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.[1],[2],[3]
A Record Week for Stocks
After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.
A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges.[4]
A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes.[5]
The Start of Holiday Shopping
The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year’s levels.[6]
However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October.[7]
Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year’s levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.[8]
THE WEEK AHEAD –
KEY ECONOMIC DATA:
Wednesday: Gross Domestic Product (GDP), Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Consumer Price Index (CPI), Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, December 4, 2020. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons, including the shutdown of the government agency or change at the private institution that handles the material
THE WEEK AHEAD – COMPANIES REPORTING EARNINGS:
Monday: Coupa Software (COUP)
Tuesday: Autozone (AZO), Mongodb, Inc. (MDB), Chewy, Inc. (CHWY)
Wednesday: Campbell Soup Company (CPB), Slack Technologies (WORK)
Thursday: Lululemon Athletica, Inc. (LULU), Adobe, Inc. (ADBE), Broadcom (AVGO), Costco Wholesale Corp. (COST)
Source: Zacks, December 4, 2020, Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Quote of the Week
“It is wonderful what we can do if we are always doing.”
– George Washington
Tax Tips
Paying Employment Taxes? Make Sure You’re Using the Correct Form
If you’re a small business owner, you should understand the differences between two commonly used employment tax returns.
Form 944, Employer’s Annual Federal Tax Return, is designed for small business owners to pay employment taxes once a year instead of quarterly. Business owners may receive a notice from the IRS informing them that they can file Form 944. Business owners may have to file this form every year until the IRS notifies them differently.
Form 941, Employer’s Quarterly Federal Tax Return, is a form designed for employers to report income taxes, Social Security, or Medicare tax withheld from employee’s paychecks. Again, the IRS may inform business owners of whether they should use Form 941.
If you have questions about which form you should use, please contact our office. We may be able to provide some guidance or help you find some information on the IRS website.
* 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[9]
Have investment questions? Call us at 1.800.626.1027 or email us at invest@pennadvisors.com.
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Footnotes, disclosures and sources:
Investment advisory services are provided through Penn Investment Advisors, Inc. (PIA), a Registered Investment Adviser. PIA is a wholly-owned subsidiary of Penn Community Bank (Bank). Investment products, securities and services offered by PIA are not a deposit of, or obligation of, or guaranteed by the Bank, or an affiliate of the Bank, are not insured by the FDIC or any agency of the United States, the Bank, or any affiliate of the bank and involve investment risk, including the possibility of loss of principal. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Penn Investment Advisors, Inc., and other listed sources. This should not be construed as investment advice. Penn Investment Advisors, Inc., does not give tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information. By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.
[1] The Wall Street Journal, December 4, 2020
[2] The Wall Street Journal, December 4, 2020
[3] The Wall Street Journal, December 4, 2020
[4] The Wall Street Journal, December 3, 2020
[5] CNBC, December 4, 2020
[6] CNBC, November 30, 2020
[7] CNBC, November 30, 2020
[8] CNBC, December 1, 2020
[9] IRS.gov, December 17, 2019