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Investors Move Past Mixed Fed Message

Investors Move Past Mixed Fed Message

February 05, 2024

Stocks pushed higher last week as investors cheered mega-cap tech corporate reports and a better-than-expected employment report.

Stocks at New Highs

At the beginning of the week, stocks surged, anticipating fourth-quarter corporate updates from tech companies and the Federal Reserve's two-day policy meeting; this led to the S&P 500 Index reaching a new record high on Monday.

The market remained relatively stable for the rest of the week until Wednesday, when the Federal Reserve announced its decision to maintain interest rates within the 5.25-5.50 percent target range. The Federal Open Market Committee's (FOMC) news unsettled investors, who anticipated that rates would remain unchanged but expected more specific guidance on the Fed's plan to lower interest rates.1

On Friday, the job report for January revealed the addition of 353,000 new jobs, surpassing the forecast of 185,000. This strong report did not negatively impact the markets. Instead, investors interpreted it as confirmation of a robust economy.2

Box upload

Source: YCharts.com, February 3, 2024. Weekly performance is measured from Monday, January 29, to Friday, February 2.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.

Fed’s Mixed Signals

The Fed's decision to keep rates steady left some investors disappointed, as they had been hoping for indications of rate cuts in the coming months; this led to a decline in stock prices on Wednesday, with increased selling towards the end of the trading day.

The Wall Street Journal’s headline after the FOMC meeting on Wednesday suggested that rate cuts were possible but not expected immediately. The FOMC's policy language, released after the meeting, indicated a subtle shift from considering rate cuts to proposing they could be possible unless inflation became a concern.3

This Week: Key Economic Data

Monday: ISM Services Index.

Wednesday: International Trade in Goods & Services. EIA Petroleum Report.

Thursday: Jobless Claims. Fed Balance Sheet.

Source: Investors Business Daily - Econoday economic calendar; February 2, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. 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.

This Week: Companies Reporting Earnings

Monday: McDonald’s Corporation (MCD), Caterpillar (CPL)

Tuesday: Eli Lilly and Company (LLY), Amgen Inc. (AMGN), Fiserv, Inc. (FI)

Wednesday: The Walt Disney Company (DIS), Uber Technologies Inc. (UBER), PayPal Holdings Inc. (PYPL)

Thursday: AstraZeneca Plc (AZN), S&P Global Inc. (SPGI), Philip Morris International Inc. (PM)

Friday: PepsiCo Inc. (PEP)

Source: Zacks, February 2, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. 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.


Vacation Home Rentals

If you receive money for the use of your primary residence, you may have to report this rental income on your tax return; this means that the “vacation home rental” classification can apply to your home, even if you don’t own multiple short-term rental properties. The rental expense deduction is limited in the case of a property used as a home; the rental expenses can’t be more than the rent received. The rental income may not require reporting if you rent the house to your tenant for fewer than 15 days during the year.

A vacation home is a house, apartment, condominium, or other dwelling that you use to generate income, but you can also use it as a residence during the year. For tax purposes, it’s critical to divide the expenses of a property into personal and business purposes.

To report rental income and rental expenses, use Schedule E. In addition, rental income may be subject to a net investment income tax.4

*This tax tip is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals for more specific information.

Taking Care of Your Mental Health 

Taking care of your mental health is just as important as your physical health—if not more so. Your mental health influences how you communicate with others, perform at work, and feel about yourself.

Here are some tips to help you focus on your mental health and understand what you need to be the best version of yourself:

  • Start your day with coffee or tea and enjoy the warm drink without thinking about what’s ahead.
  • Set up a getaway, even if you don’t go far. It could even be camping in your backyard.
  • Think of something in your life you want to improve and figure out what you can do to take a step in the right direction.
  • Learn something new, whether that’s a recipe, a song, a poem, or a skill.
  • Show some love to someone in your life. Write a letter, send a text, or give a loved one a phone call.
  • Go off the grid and leave your smartphone at home for a day (or a few hours).5

 

Fish Florentine

yield: 4 servings

Prep: 5 mins | Cook: 15 mins | Total time: 20 mins

This easy Fish Florentine recipe, made with a pan seared firm white fish served on a creamy bed of spinach feels like something you would order out in a fancy restaurant!


Ingredients:

    • 4 5 oz thick pieces of skinless white firm fish fillet , (such as grouper, flounder, bass or halibut)
    • 1 tablespoons extra virgin olive oil
    • 1 tablespoon salted butter
    • 1 cup red bell pepper chopped
    • 2 cloves garlic minced
    • 9 ounces fresh baby spinach, from two bags
    • 2 ounces 1/3 less fat cream cheese, I like Philadelphia
    • ¼ cup half & half cream
    • 3 tablespoons grated Parmesan cheese
    • kosher salt
    • fresh black pepper

    Instructions:

    1. In a large skillet over medium heat add 1/2 tablespoon of olive oil and 1/2 tablespoon of butter, red bell pepper and garlic and cook for about 4 minutes.
    2. Add spinach season with a pinch of salt and pepper mix until the spinach wilts down.
    3. Add cream cheese, half & half and parmesan cheese mix well until cream cheese is melted and resembles creamed spinach.
    4. Heat a separate skillet on medium high heat, add remaining oil and butter.
    5. Season fish on both sides with salt and pepper and place on the hot pan.
    6. Cook 6 minutes on first side and flip fish over and cook other side an additional 5 minutes, until cooked through and browned.
    7. Divide the spinach mixture on the bottom of each plate and top with piece of fish.

     



    Footnotes and Sources


    1. CNBC.com, January 29, 2024

    2. The Wall Street Journal, January 31, 2024

    3. CNBC.com, February 2, 2024

    4. IRS.gov, September 25, 2023 

    5. Mhanational.org, October 9, 2023

     

     



    Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. 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.

    The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

    This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

    Copyright 2024 FMG Suite.

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