Weekly Market Update | January 11, 2021

The Year in Review

The Week on Wall Street

Shrugging off COVID-19 infections and the disruption at the Capitol on January 6, stocks powered higher to kick off a new year of trading.

The Dow Jones Industrial Average gained 1.61%, while the Standard & Poor’s 500 increased by 1.83%. The Nasdaq Composite index, which led throughout 2020, picked up 2.43%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.45%.

Fireworks to Start the New Year

Stocks got off to an inauspicious start amid the stuttering pace of vaccine distribution and concern that the economic recovery might take longer than anticipated. Uncertainty over the looming Senate runoff election in Georgia added to the broad retreat that marked the first day of 2021 trading.

From there markets turned higher, aided by firming oil prices with subsequent support provided by the Georgia Senate election results, which lifted hopes of additional fiscal stimulus. Stocks managed through political unrest mid-week, with banks, economically sensitive stocks, and technology shares leading the way.

The yield on the 10-year Treasury rose above 1% for the first time since March as investors fled bonds in anticipation of new federal borrowing.

Stocks touched all-time highs on the final trading day, capping a strong week of performance.

Employment Picture

The U.S. economy lost 140,000 jobs in December, confirming fears of economic slowdown brought on by a resurgence of COVID-19 infections.

Not surprisingly, it was restaurants and bars that saw the greatest job losses, with the larger hospitality sector accounting for nearly all the job losses last month. Meanwhile, November job creation was revised upward, from 245,000 to 336,000.

To help put the pandemic in perspective, December’s job report capped the worst year for job losses since the tracking began in 1939. The unemployment rate remained unchanged at 6.7%.

Key Economic Data

Tuesday: Job Openings and Labor Turnover Survey (JOLTS).

Wednesday:  Consumer Price Index (CPI).

Thursday: Initial Jobless Claims.

Friday: Retail Sales, Consumer Sentiment, Industrial Production.

Source: MarketWatch Calendar

Companies Reporting Earnings

Tuesday: KB Home (KBH)

Thursday: Blackrock (BLK)

Friday: JPMorgan Chase (JPM), Citigroup (C), PNC Financial (PNC)

Source:Zacks.com

Quote of the Week

“Fun is a good thing, but only when it spoils nothing better.”

– George Santayana

Sources: The Wall Street Journal, January 8, 2021; Treasury.gov, January 8, 2021

Weekly performance for the Dow Jones Industrial Average, Standard & Poor’s 500 index, and NASDAQ Composite is measured from the close of trading Thursday, December 31 to Friday January 8, close. Weekly performance for the MSCI-EAFE is measured from Thursday December 31, open to the Thursday January 7, close. Weekly and year-to-date 10-year Treasury note yields are expressed in basis points.

Stay Healthy During Flu Season

This flu season, it’s more important than ever to stay healthy. Fortunately, with a few simple steps, you may reduce your risk this flu season.

Get the flu vaccination: The Centers for Disease Control estimates that last year, fewer than half of all Americans got the flu vaccine. While getting the vaccine may not prevent you from getting a strain of the flu, it may help you avoid one of the other strains. This is especially important for anyone with a chronic health condition, and for those who are 65 years of age and older.

Wash your hands: Handwashing remains one of the most effective ways to prevent the flu. Wash your hands with soap and water for at least 20 seconds, and wash your hands often.

Disinfect: Disinfect objects that you touch every day, like doorknobs, your car’s steering wheel, and other household items that you use regularly.

While this information should not substitute for medical advice from your healthcare provider, implementing better habits, like frequent handwashing, wearing a face mask, and avoiding anyone who is ill, may help you and your loved ones stay healthy this flu season.

Tip adapted from Centers for Disease Control and Prevention

FETTUCCINE WITH CHICKEN SAUSAGE, KALE, AND CANNELLINI BEANS

Serves: 4

Ingredients:

  • 1 pound De Cecco Fettuccine pasta
  • 2 tablespoons olive oil plus extra for drizzling
  • 1 pound chicken sausage
  • 4 tablespoons unsalted butter (1/2 stick)
  • 1 cup yellow onion thinly sliced (about 1/2 medium onion)
  • 4 cloves minced garlic
  • 3 cups kale chopped
  • Kosher salt
  • Black pepper freshly ground
  • 1 can (15 oz) cannellini beans
  • 1 cup chicken broth
  • 1/4 cup parmesan grated, plus more for serving

Directions:

  1. Bring a pot of salted water to a boil. Cook the pasta until al dente, then drain.
  2. While the pasta is cooking, heat the olive oil in a deep-sided skillet over medium heat. Add the sausage to the skillet, and cook for about 7 minutes, or until it is brown on all sides. Set aside on a cutting board to rest.
  3. Add the butter to the skillet and lower the heat. Add the onions and sauté for 3-5 minutes, then add garlic, and cook for about 30 seconds more. Stir in the kale and season lightly with salt and pepper.
  4. While the kale wilts, slice the sausages into 1-inch pieces and add to the skillet, along with the cannellini beans.
  5. Add the pasta to the skillet, along with about ½ cup of the chicken broth and the grated Parmesan. If the pasta needs a little more sauce, add a little more chicken broth.
  6. Season to taste with salt and pepper and serve immediately with grated Parmesan on the side.

Recipe adapted from KitchenConfidante

What Does a Chip Have in Common With a Putt?

At first glance, seemingly little. Yet, these two types of golf shots share something in common: a lack of “moving parts.”

A good chip starts with a narrow stance, with about 60% of your weight on your left leg (assuming you play right-handed). You play the ball back in your stance, which promotes your club shaft to lean forward. Your stroke is like a putting stroke: you keep your hands locked and steady. You are not trying to use your hands to make the shot work, you are letting the loft of the club do the work. These are the fundamentals of a good chip.

Tip adapted from YourTahoePlace

Tax Tips for Those in the Military

The Internal Revenue Service has certain special tax breaks and programs for members of the U.S. Armed Forces. Here are just a few.

Earned Income Tax Credit

If you get nontaxable combat pay, you may choose to include it in your taxable income. Including it may boost your earned income tax credit, meaning you may owe less tax and could get a larger refund. In 2015, the maximum credit for taxpayers was $6,242. The average amount of EITC claimed was more than $2,400. You may want to consider running both calculations to see what choice best benefits you.

Signing Joint Returns

As a rule, both spouses normally must sign a joint income tax return. If your spouse is absent due to military duty, you may be able to sign for your spouse. Keep in mind, however, that you may need a power of attorney to file a joint return.

Job Search

If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees.

Tip adapted from IRS

Clean Out Electronic Clutter

If you were lucky enough to get an upgraded phone or computer this holiday season, you might not know what to do with the old one. Fortunately, there are many options to get rid of your old electronics that are also good for the environment.

Old electronics that are still in good working order can be cleaned out of personal information and either donated or passed on to someone else who can use them.

Electronics not working well enough to be donated? Check out your local area for scheduled electronic waste recycling days. Special recycling centers in your area might also specifically deal with recycling electronics, too.

Tip adapted from TheSpruce

Financial planning and investment advisory services offered through Cleveland Wealth, LLC, a Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified wealth advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.