Positive inflation data failed to lift stocks from their August doldrums last week as economic data and a ratings downgrade soured investor sentiment.
The Dow Jones Industrial Average added 0.62%, while the Standard & Poor’s 500 slipped 0.31%. The Nasdaq Composite index fell 1.90% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.50%.1,2,3
Tech Weighs on Stocks
Stocks struggled last week, beginning on a strong note ahead of key inflation data and selling off mid-week in response to a downgrade of the banking sector by credit rating agency Moody’s and news of a steep drop in China’s exports. Emblematic of the week, stocks jumped to big gains following Thursday’s better-than-expected inflation report, only to evaporate as bond yields rose amid an auction of 30-year Treasury bonds.
Stocks have had difficulty sustaining traction with the loss of the technology’s leadership, which has propelled gains this year. The combination of higher yields and earnings that failed to validate tech's elevated valuations has dragged the sector and the larger market.
Subdued Inflation
July’s inflation data reflected only moderate price pressures. Consumer prices increased by a modest 0.2%, which aligned with market expectations. In comparison, the annual inflation rate came in at 3.2%, slightly below consensus estimates–though higher than June’s annual increase of 3.0%. Core CPI (excludes food and energy) was particularly encouraging, rising at the slowest rate since October 2021.4
Producer prices painted a more mixed picture, coming in a bit higher than expected, rising 0.3% versus the expected 0.2% increase, though the year-over-year increase was just 0.8%. Core producer prices’ 12-month increase of 2.4% tied for the lowest since January 2021.5
This Week: Key Economic Data
Tuesday: Retail Sales.
Wednesday: Housing Starts. Industrial Production. FOMC Minutes.
Thursday: Index of Leading Economic Indicators. Jobless Claims.
Source: Econoday, August 11, 2023
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
Tuesday: The Home Depot, Inc. (HD)
Wednesday: Cisco Systems, Inc. (CSCO), Target Corporation (TGT), The TJX Companies, Inc. (TJX)
Thursday: Walmart, Inc. (WMT), Applied Materials, Inc. (AMAT), Ross Stores, Inc. (ROST)
Friday: Palo Alto Networks, Inc. (PANW), Deere & Company (DE)
Source: Zacks, August 11, 2023
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.
Is child support or alimony considered taxable income?
Child support payments are not taxable income for the recipient or tax-deductible for the payer. Therefore, you should not include child support payments when calculating gross income for tax purposes.
On the other hand, alimony payments may be taxable income for the recipient and tax-deductible for the payer depending on the specific divorce or separation instrument. For divorce or separation instruments executed on or before December 31, 2018, alimony payments are generally taxable income for the recipient and tax-deductible for the payer. However, for divorce or separation instruments executed after December 31, 2018, or those executed before that date but later modified to repeal the deduction for alimony expressly, the payments are neither taxable income nor tax-deductible. In either case, when determining gross income for tax purposes, alimony payments received should be included or excluded based on the specific instrument.6
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
3 Yoga Poses for Beginners
The first pose is Downward-Facing Dog, used in most yoga practices. In it, you stack your arms under your shoulders, and your bottom is in the air with your back legs straight. Your body is in the shape of an upside-down "V."
The next is Crescent Lunge. Stand in a forward lunge with one foot in front and bent. Your back leg is straight. Now, straighten your arms and lift them over your head; you often see this pose used in yoga flow classes.
Last, we have the Triangle pose. Step your feet apart (wider than your shoulders). Then, hinge at your hip and lean over your front leg. Reach down with the same arm in front and rest it on the floor or a yoga block.7
Ricotta Pancakes with Salted Blueberry Butter
Servings: 4
PREP TIME: 20 mins | COOK TIME: 15 mins | TOTAL TIME: 35 mins
These ricotta pancakes are the best! Light and fluffy and flavorful, these are delicious served hot with salted blueberry butter, syrup and whipped cream.
The best breakfast for a special occasion!
Ingredients:
- ¾ cup all-purpose flour
- 1 ½ teaspoons baking powder
- ½ teaspoon kosher salt
- 3 large eggs
- ¼ cup sugar
- 2 teaspoons vanilla extract
- ¾ cup ricotta cheese
- ¼ cup milk
- 2 tablespoons butter, melted, plus more for cooking
- syrup, powdered sugar or whipped cream for serving
- fresh blueberries, for serving
Salted Blueberry Butter:
- ½ cup 1 stick butter, softened
- 2 to 3 tablespoons blueberry preserves
- kosher salt
Instructions:
- In a small bowl, whisk together the flour, baking powder and salt.
- In a large bowl, whisk together the eggs and the sugar until combined and foamy. Whisk in the vanilla extract. Stir in the ricotta cheese, milk and melted butter.
- Add the dry ingredients and mix until fully combined.
- Heat a nonstick skillet or griddle over medium heat. Once hot, add some butter and drop the pancake batter onto the griddle, using a ¼ cup measure or ice cream scoop. Cook until bubbles form on the top, about 2 to 3 minutes. Gently flip and cook for another 2 minutes, until golden brown. Repeat with remaining batter.
- Serve pancakes hot with blueberry butter. Add on syrup, powdered sugar or whipped cream if desired.
- Salted Blueberry Butter: Combine the butter and preserves in a bowl with a big pinch of salt. Mash with a fork or spoon and continue to mix until everything is combined. You can make this ahead of time. Store in the fridge when not using.
Footnotes and Sources
1. The Wall Street Journal, August 11, 2023
2. The Wall Street Journal, August 11, 2023
3. The Wall Street Journal, August 11, 2023
4. CNBC, August 10, 2023
5. CNBC, August 11, 2023
6. IRS.gov, November 1, 2022
7. SELF Magazine, April 24, 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 2023 FMG Suite.