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November 2019
Market Update
(all values as of 08.31.2023)

Stock Indices:

Dow Jones 34,721
S&P 500 4,507
Nasdaq 14,034

Bond Sector Yields:

2 Yr Treasury 4.85%
10 Yr Treasury 4.09%
10 Yr Municipal 2.87%
High Yield 8.27%

YTD Market Returns:

Dow Jones 4.75%
S&P 500 17.40%
Nasdaq 34.09%
MSCI-Europe 9.83%
MSCI-Pacific 6.17%
MSCI-Emg Mkt 2.50%
US Agg Bond 1.37%
US Corp Bond 2.76%
US Gov’t Bond 1.53%

Commodity Prices:

Gold 1,966
Silver 24.82
Oil (WTI) 83.60


Dollar / Euro 1.08
Dollar / Pound 1.26
Yen / Dollar 146.14
Canadian /Dollar 0.73

Macro Overview

Equity markets defied the historically negative month of October, with equity indices moving higher despite ongoing trade dispute uncertainty and growing concerns of global economic headwinds.

Major domestic and international equity indices rose in sync as interest rates remained low worldwide, driving investors toward stocks in search of returns. Monetary policy that prompted rate cuts by central banks around the world are expected to provide stimulus and bolster global growth, as the cost to borrow remains low.

Concerns exist regarding a potential global economic slowdown, with attention on economic data becoming a focal point for analysts and economists. U.S. equities have continued to outperform as a result of an accommodative monetary policy driven by the Federal Reserve and consistent consumer demand, which have buoyed stock valuations.

Trade talks between the U.S. and China have continued to roil markets as inconsistent messages regarding progress on trade discussions have not yielded formal trade agreements thus far. The ongoing trade dispute has prompted revisions to economic growth estimates by economists and international organizations, including the International Monetary Fund (IMF) and the World Bank.

Bond yields rose in October, a possible indication that growth dynamics are propelling some asset prices and interest rates higher. Economists view a slight rise in rates optimistically as an indication of healthy economic forces driving expansion. Treasury bond yields saw modest increases in October, with the 10-year Treasury yield rising to 1.69% on October 31st from 1.68% on September 30th.

The Federal Reserve cut its key interest rate for the third time this year. The most recent cut in late October was preceded by two cuts earlier in the year, the first in July and the second in September. The Fed hinted that no further rate cuts were anticipated unless weaker economic data warranted additional cuts.

The Treasury and the Federal Reserve are closely monitoring the possibility of year-end volatility as banks are becoming hesitant to part with cash reserves, which puts pressure on money markets. Short-term rates briefly spiked in September as the cost for banks to borrow cash against Treasuries jumped. Banks actively participate in Fed-driven strategies that indirectly affect short-term rates and liquidity in the bond markets.

Following several failed attempts to formally extract Great Britain from the European Union (EU), also known as Brexit, the prime minister of Great Britain has given the vote back to the people of Great Britain with an election on December 12th. British voters originally voted in 2016 to exit the EU, but no formal agreement on a framework for the exit has been reached between the British government and the EU. The vote is expected to garner significant attention from other EU countries considering an EU exit vote.

Sources: Federal Reserve, U.S. Treasury, EuroStat

the cost of health insurance has climbed over 18% in the past year

Stock Indices Move Higher In October – Global Equity Review

Both domestic and international equity markets advanced in October, marking new highs for multiple indices. The S&P 500 Index and the Nasdaq Index both closed at record levels on November 1st. Developed and emerging market indices propelled higher in October, buoyed by a continued low-rate environment and a weaker dollar.

Volatility, as measured by the Chicago Board Options Exchange (CBOE) Volatility Index, or VIX, fell to a near annual low in October as risk concerns were subdued.

The technology and health care sectors were the top-performing large cap sectors in October, with energy ranking as the worst-performing sector in the S&P 500 Index. Market analysts are seeing a rotation toward value from growth assets, reminiscent of a more cautionary environment. (Sources: S&P, CBOE, Bloomberg)

Bond Yields Stabilize – Fixed Income Overview

The Federal Reserve injected additional amounts of funds into the overnight lending markets, also known as the repo market, in October. The move served to appease concerns that a reemergence of the volatility that hit markets in December 2018 would occur.

Yields on government and corporate bonds remained stable in October, as expectations of economic growth and a pause to further rate cuts stabilized bond markets. Bond prices have risen since the beginning of the year, with government and corporate bond yields still hovering near record-low levels. Bond prices move in the opposite direction of yields.(Sources: Federal Reserve, U.S. Treasury)

What Prices Have Changed The Most – Consumer Markets

Government agencies compile and track prices on a multitude of products from various sources. Dramatic price swings help economists determine who may be influenced and how the overall economy may be affected.

Price fluctuations on certain products tend to affect a larger portion of the population than do price changes on other products. Over the past year, the cost of health insurance has climbed over 18%, affecting nearly everyone paying for health coverage. However, the impact of the 5.8% price increase for baby food over the same period was generally limited to younger families across the country.

Televisions, dresses, and eggs also experienced steep price drops over the past year, affecting a broad assortment of consumers.

Source: Bureau of Labor Statistics

The Social Security Administration announced a 1.6% increase in payments for 2020

Social Security Payments Increasing By 1.6% For 2020 – Retirement Planning

Social Security recipients are due to receive a modest increase in benefit payments in 2020. But for many recipients, the increase in payments will go toward higher Medicare costs. The increase will affect over 63 million Americans receiving Social Security benefit payments.

The Social Security Administration announced a 1.6% increase in benefit payments, effective in late December 2019 for disability beneficiaries and in January 2020 for retired beneficiaries. The 1.6% increase is slightly less than the increase of 2.8% for 2019.

Many are concerned that the 1.6% increase may not cover expenses that are rising at a faster rate, including essential items such as food and housing.

The Social Security program was established on August 14, 1935, when President Roosevelt signed the Social Security Act into law. Since then, Social Security has provided millions of Americans with benefit payments. The payments are subject to automatic increases based on inflation, also known as cost-of-living adjustments or COLAs, which have been in effect since 1975. Over the years, recipients have received varying increases depending on the inflation rate. With low current inflation levels, recent increases in benefit payments have been subdued relative to years with higher inflation.

Over the decades, Americans have become increasingly dependent on Social Security payments; however, for some Americans it may not be enough to rely on Social Security alone. Social Security is a major source of income for many of the elderly, given that nine out of ten retirees 65 years of age and older receive benefit payments representing an average of 41% of their income. Over the years, Social Security benefits have come under more pressure due to the fact that retirees are living longer. In 1940, the life expectancy of a 65-year old was 14 years, while today it’s about 20 years.

By 2036, there will be almost twice as many older Americans eligible for benefits as today, from 41.9 million to 78.1 million. There are currently 2.9 workers for each Social Security beneficiary; by 2036 there will be 2.1 workers for each beneficiary.

Source: Social Security Administration,

25 million taxpayers replaced itemized deductions with standard deductions

Tax Actions To Consider As The Year End Approaches – Tax Planning

The Tax Cuts & Jobs Act, passed in 2017, brought about various tax changes that affected most individual tax payers. Following are various changes to consider as we reach the end of the year.

Withholdings & Estimates:

Withholdings and estimated taxes should be verified before year end, since the IRS withholding tables have been updated as a result of the tax law changes. Employees should check their withholdings before year end and make any necessary adjustments. Quarterly payments made by business owners and 1099 taxpayers should be reviewed and adjusted as necessary.

Most taxpayers must pay 90% of their income and self-employment taxes by year end or face penalties. The IRS forgave these penalties for some taxpayers last tax season, but intends to enforce them this year.

Itemized Deductions:

Of the various changes implemented by the new tax rules, itemized deductions affected the largest number of taxpayers. Over 25 million taxpayers opted to replace itemized deductions with a standard deduction. The increase in the standard deduction to $12,200 for single filers and $24,400 for married couples simplified the deduction quandary for many taxpayers. Simply taking the standard deduction exceeded itemized deductions for many, with no need for receipts or documentation to prove submitted expenses.

Retirement Savings Deadlines:

Traditional IRAs and Roth IRAs for tax year 2019 can be opened and funded until April 15, 2020.

Self-employed earners may have up to October 15, 2020 to set up and fund a SEP IRA if filing an extension for the business return. Solo 401k plans must be set up before December 31, 2019, but may be funded thereafter depending on the details of the plan.

Required Minimum Distributions:

Traditional IRA owners over the age of 70.5 are required to take a required minimum distribution (RMD) before December 31, 2019. Congress is currently considering increasing the RMD age to 72, but has not yet signed it into legislation.

A single RMD may be taken for multiple IRAs, but an RMD must be taken from each individual 401k account if more than one exists. This requirement is affecting an increasing number of taxpayers, as more retirees are leaving retirement plan balances in their 401k plans.

Sources: Tax Policy Center, Tax Foundation, IRS