When do you need a will? The answer is easy: Right Now. 

Powell: Inflation Heading In The Right Direction

Presented by Elsass Financial Group

Stocks were mixed last week following better-than-expected corporate reports and increasing optimism over a slowdown in interest rates.

The Dow Jones Industrial Average edged lower, slipping -0.15%. The Standard & Poor’s 500 rose 1.62% while the Nasdaq Composite index led, picking up 3.31%. The MSCI EAFE index, which tracks developed overseas stock markets, increased by 1.16%.^1,2,3

Rally Continues

Strong earnings reports and encouraging inflation data lifted stocks ahead of the Federal Open Market Committee’s (FOMC) decision on Wednesday to hike interest rates by 25 basis points. Markets rallied following the announcement, relieved that the increase was in line with expectations and buoyed by post-meeting comments in which Fed Chair Jerome Powell acknowledged the disinflationary forces in place.

Fresh earnings reports fueled further gains, with positive earnings surprises from several big-name technology companies that benefited the larger universe of Nasdaq-listed high-growth companies. Disappointing earnings from three mega-cap tech companies and a strong employment report triggered a Friday pull-back, paring the week’s gains.

Another Rate Hike

The Federal Reserve raised interest rates by 0.25%, signaling to the financial markets that it would likely hike rates by another 25 basis points at its next meeting in late March. Fed officials said the slowdown in rate hikes might provide time to assess the impact of the accumulated rate hikes. The Fed retained language in its post-meeting statement that future rate hike plans were unchanged to discourage investors’ hopes of an imminent pause in the rate-hike cycle.⁴

In his post-meeting press conference, Fed Chair Powell reiterated the Fed’s commitment not to declare victory on inflation prematurely but acknowledged that a disinflationary trend was underway.⁵

This Week: Key Economic Data

Thursday: Jobless Claims.

Friday: Consumer Sentiment.

^{Source: Econoday, February 3, 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: Fortinet, Inc. (FTNT), Chipotle Mexican Grill, Inc. (CMG).

Wednesday: CVS Health Corporation (CVS), Prudential Financial, Inc. (PRU), The Walt Disney Company (DIS).

Thursday: AbbVie, Inc. (ABBV), PayPal Holdings, Inc. (PYPL), PepsiCo, Inc. (PEP), Kellogg Company (K), Expedia Group, Inc. (EXPE), O’Reilly Automotive, Inc. (ORLY).  

^{Source: Zacks, February 3, 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.}

“A man’s legacy is defined by time.”

– John Cena

Don’t Miss Out On The 2021 Child Tax Credit

Did you know that not just biological parents are eligible for the 2021 child tax credit? Grandparents, foster parents, or people caring for siblings or other relatives should also check their eligibility. If you claim at least one child as your dependent, you may be eligible to benefit from the child tax credit.

In 2021, the IRS expanded the child tax credit. This expansion increased the amount of money families can receive per child and expanded who can receive the payments. The credit increased from $2,000 to $3,600 per child for children under the age of six and $2,000 to $3,000 for children over the age of 6. It also raised the age limit from 16 to 17 years old.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

What Is Clean Beauty?

What you put on your body is just as important as what you put in your body! This is why more people are choosing clean skincare and beauty products. Clean ingredients are better for the environment and often more gentle on your skin.

Clean beauty products don’t contain synthetic chemicals and ingredients that could harm your body or irritate your skin. Some of these synthetic ingredients include:

• Parabens
  
• Phthalates
  
• Oxybenzone
  
• Synthetic fragrances
  
• And many more

The exact definition is somewhat undefined, but the movement is becoming increasingly popular as people focus on healthy, environmentally-friendly options for their bodies, homes, and family.

Tip adapted from FOREO⁷

What is the beginning of sorrow and the end of sickness? Something you cannot express happiness without? Something that is always in risk, but never in danger?

Last week’s riddle: Karen is twice her brother’s age and half her father’s age. In 22 years, her brother will be half the father’s age. How old is Karen now? Answer: Karen is 22 years old.

Haleakala National Park, Maui, Hawaii 

Footnotes And Sources

^{1. The Wall Street Journal, February 3, 2023}

^{2. The Wall Street Journal, February 3, 2023}

^{3. The Wall Street Journal, February 3, 2023}

^{4. The Wall Street Journal, February 1, 2023}

^{5. CNBC, February 1, 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.}

^{The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.}

^{The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.}

^{U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.}

^{International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.}

^{Please consult your financial professional for additional information.}

^{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.}

Earnings And Data Tell Two Different Stories On Near Future.

Presented by Elsass Financial Group

Stocks added to their early 2023 gains amid a busy stream of mixed corporate earnings results and conflicting economic data. The Dow Jones Industrial Average gained 1.81%, while the Standard & Poor’s 500 added 2.47%. The Nasdaq Composite index rose 4.32% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased by 1.14%.1,2,3

Stocks Advance With the backdrop of earnings reports and conflicting economic data, stocks climbed higher on cooling inflation, continued economic resilience, and fourth-quarter corporate earnings results that, while underwhelming, did not appear as bad as many had feared. There was enough new economic data to support both the “recession is coming” and the “soft landing” camps. It was corporate results and continued labor market strength, along with a solid, if weakening, fourth-quarter Gross Domestic Product (GDP) growth number, however, that raised investors’ hopes that a potential recession may be mild and likely pushed out to later in the year. GDP Report The U.S. economy expanded at a 2.9% annualized rate in the fourth quarter, slightly exceeding consensus estimates of 2.8% but down from the third quarter’s 3.2% growth rate. Consumer spending, which accounts for over two-thirds of GDP, rose 2.1%. Increases in private inventory investment, government spending, and nonresidential fixed investment also contributed to the fourth quarter’s growth. Weakness in housing and a drop in exports subtracted from the quarter’s result.4 Beneath the headline number, the personal consumption expenditures price index (the Fed’s preferred measure of inflation) rose 3.2%. That was lower than the third quarter’s 4.8% increase, though it remains above the Fed’s 2% inflation target rate.5  This Week: Key Economic Data Wednesday: Federal Open Market Committee Announcement. Job Openings and Turnover Survey (JOLTS). Institute for Supply Management (ISM) Manufacturing Index. Automated Data Processing (ADP) Employment Report. Thursday: Factory Orders. Jobless Claims. Friday: Employment Situation. Institute for Supply Management (ISM) Services Index. Source: Econoday, January 27, 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 Monday:  Principal Financial Group, Inc. (PFG). Tuesday:  Advanced Micro Devices, Inc. (AMD), Pfizer, Inc. (PFE), Caterpillar, Inc. (CAT), General Motors Company (GM), McDonald’s Corporation (MCD), Amgen, Inc. (AMGN), United Parcel Service, Inc. (UPS), Stryker Corporation (SYK). Wednesday: Thermo Fisher Scientific, Inc. (TMO), Humana, Inc. (HUM), TMobile US, Inc. (TMUS). Thursday: Apple, Inc. (AAPL), Amazon.com, Inc. (AMZN), Ford Motor Company (F), Alphabet, Inc. (GOOGL), Qualcomm, Inc. (QCOM), Bristol Myers Squibb Company (BMY), Merck & Co., Inc. (MRK), Eli Lilly and Company (LLY), Honeywell International, Inc. (HON).   Friday: Cigna Corporation(CI), Regeneron Pharmaceuticals, Inc. (REGN). Source: Zacks, January 27, 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.

“Fact creates norms, and truth illumination.” – Werner Herzog

Finding The Goldilocks Tax Withholding Just like how Goldilocks had to try the porridge that was too hot and then the one that was too cold before she found one that was just right, you need to find the amount of tax withholding that’s not too much or too little for your circumstances. No one wants a bad surprise when Tax Day comes, and having the proper withholding can help you avoid these surprises. You should especially check your withholding after a significant life change, such as a marriage, divorce, new child, a move, or major changes in the tax law. How much should you withhold? The Tax Withholding Estimator on the IRS website can help people determine if they have too much income tax withheld and how to adjust. Tip adapted from IRS.gov6

Cut Your Soda Habit With These Alternatives Are you in the habit of drinking too much soda? Luckily, there are a lot of delicious alternatives to help you cut back. Here are just a few: Sparkling water – If you’re after a carbonation fix, there are so many delicious brands and flavors of sparkling water, you’re sure to find one you like. Coffee or tea – If you drink soda for the caffeine jolt, try switching to unsweetened coffee or tea instead. Fruit – If you have a sweet tooth that only soda can satisfy, try snacking on whole fruits like peaches, mangoes, or berries instead. These fruits have natural sugar. If you can’t stop drinking soda, try making your own! You can make a healthier version of store-bought soda using a carbonation machine and different flavors of syrups. Generally, these homemade sodas have less sugar and other additives. Tip adapted from Medical News Today7

Karen is twice her brother’s age and half her father’s age. In 22 years, her brother will be half the father’s age. How old is Karen now? Last week’s riddle: Take one letter out of a 7-letter word and it becomes longer. What is this word? Answer: Lounger.

Beaver Creek, Colorado

Footnotes And Sources 1. The Wall Street Journal, January 27, 2023 2. The Wall Street Journal, January 27, 2023 3. The Wall Street Journal, January 27, 2023 4. CNBC, January 26, 2023 5. CNBC, January 26, 2023 6. IRS.gov, November 2, 2022 7. Medical News Today, February 18, 2021

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. The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. 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.

What does the bond market know that the Fed isn’t telling us?

Fed officials recently have said that short-term rates will need to climb to over 5 percent to bring inflation under control. But in the table below, you can see that the bond traders say short-term rates will top out at 4.5 percent in 2023 and then head lower.
The bond market is more dovish than the Fed. And perhaps with good reason. The November Consumer Price Index report came in below expectations, and there are more and more signs that inflation has started to trend lower, which may suggest the Fed’s work is coming to an end.

So why is the Fed talking so tough? As many of you may recall, Fed Chair Jerome Powell said inflation was “transitory” throughout much of 2021. The Fed Chair doesn’t want to mischaracterize inflation again.

I work with other financial professionals who listen to comments from Fed officials and compare them to what the bond market is saying. So if you happen to hear commentary about the Fed that’s unsettling in any way, please let me know as soon as possible so we can review what’s going on.

^{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.}