Hello, from the road and the mobile desk of your traveling intrepid author this Wednesday afternoon, the 17th day of March 2021 where it is a balmy 79° here along the Gulf Coast of Mississippi. As many of you know, and as mentioned in my prior blog, a few weeks ago I hooked up the Airstream for a 1,600 mile cross-country adventure to spend some time with my father who is recovering from a bad accident. The good news is, his doctors expect a full recovery in the next few weeks. Therefore, I should be able to start the return trip to Southern California soon. In the meantime, it most certainly has been business as usual from the shiny sliver mobile office.
Rest assured, on his down-time, your author is certainly not all work and no play. To that end, last weekend I had the opportunity to spend some time with a good friend on his ranch located in Pass Christian, Mississippi. What a terrific day it was; a great way to clear the head under blue skies and get out with the horses and cattle. I now have new respect for the job of a rancher. It is hard work for sure but, wow, what fun! Be sure to check out the "photo of the week" section below where I have placed a quick home video I created of the day. Also too, this week's cover photo is a drone shot of the Pass between the Gulf of Mexico and Bay of St. Louis. I'll be sure to post more pictures/video in upcoming editions. Now, let us get down to the business at hand: what's been affecting the markets.
Last week, the House of Representatives passed a $1.9 trillion package focused on economic relief following the COVID-19 pandemic. The bill was signed into law at the White House last Thursday 3/11/21.10 Beyond the $1,400 stimulus checks, the relief bill offers many additional levels of stimulus, including funds for vaccine distribution, expansions of tax credits and unemployment payments, and aid to state and local governments.10
The big sticking point was the phase-out range for the stimulus checks, which will now affect those earning more than $75,000 annually and capped for those earning $80,000 or more ($150,00-$160,000 for married couples).10
Regardless, this is truly a massive bill with many aspects which roll up into a never-ending list of provisions for individuals and businesses at all levels. It will take take a massive torque wrench to tighten all the nuts and bolts on this one for certain. In other words, some time is needed to gain clarification on the various aspects of the bill and, ultimately, how the money will flow from the spigot. Naturally, you may have questions about the bill, and how it might affect you and your family. I welcome a chance to discuss this with you and will certainly keep you informed through this blog or even via a separate topic specific email as circumstances warrant. Remember, 1.9 trillion is an astronomical sum that will take some time to distribute; nonetheless, with the expectation of the liquidity eventually flowing, the markets had big moves last week.
As the fiscal relief bill was signed into law, stocks touched new record highs as bond yields steadied and confidence in a strong economic recovery grew.
Today, the Dow Jones Industrial Average closed +189.42 and the Standard & Poor's 500 added +11.41. Last week, the Dow Jones Industrial Average gained 4.07%, while the Standard & Poor’s 500 tacked on 2.64%. The Nasdaq Composite index rose 3.09% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.01%.1,2,3
As mentioned above, stocks marched higher as bond yields leveled off and the $1.9 trillion stimulus bill moved through the legislative process. A muted inflation number and a better-than-expected jobless claims report evidenced an improving economy absent an attendant rise in inflation.4
The technology sector was particularly volatile, with the Nasdaq Composite falling into correction territory to start the week as investors rotated into cyclical opportunities.
Technology rebounded strongly as bond yields stabilized and bargain hunters purchased tech names at reduced prices. The bounceback propelled the S&P 500 to a record high, while the reopening trade drove the Dow Industrials above 32,000 for the first time.5,6
The week ended on a mixed note, with the Dow and S&P 500 adding to their record closes and the Nasdaq Composite trimming its weekly gain.
Treasury auctions to finance federal spending are usually boring affairs, but investor caution was high ahead of last week’s auctions of 10-year and 30-year Treasuries. Investors were concerned that lukewarm demand amid a huge supply had the potential to drive yields higher and take the pressure on stock prices lower.
This Week: Key Economic Data
Tuesday: Retail Sales. Industrial Production.
This Week: Companies Reporting Earnings
Tuesday: Coupa Software (COUP).
“You can cut all the flowers but you cannot keep spring from coming.”
– Pablo Neruda
Couples Who Work Together, Tax Together
As more households decide to start a business, many couples find themselves learning about the tax responsibilities related to that business. There are some things to consider when working together.
Here are a few items to consider:
Tip adapted from IRS.gov8
Eat This, Not That: Easy Food Swaps Anyone Can Do
Eating healthier doesn’t have to be hard! You might not have to make any major changes in your current diet! By swapping out unhealthy options for healthier picks, you can cut the bad stuff and still enjoy your meal. Here are some of our favorite food swaps:
Many healthy swaps like these can help you reduce your caloric intake, consume less sugar, and make it easy to create a more balanced meal.
Tip adapted from EatThis.com9
Where does today come before yesterday?
Last week’s riddle: The name of a particular insect is six letters long. You can lop off the last three letters from its name and end up with the name of another insect. What is this six-letter word? Answer: Beetle.
...A day on the ranch in Pass Christian, Mississippi.
Footnotes and Sources
2. The Wall Street Journal, March 12, 2021
3. The Wall Street Journal, March 12, 2021
4. Bloomberg.com, March 10, 2021
5. CNBC, March 11, 2021
6. The Wall Street Journal, March 10, 2021
7. The Street, March 11, 2021
8. IRS.gov, October 7, 2020
9. EatThis.com, September 29, 2020
10. CNBC.com, March 10, 2021
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From the Road: COVID-19 Stimulus & Time On The Ranch
March 17, 2021