Optimism over the economic reopening and renewed enthusiasm for technology and other high-growth companies powered the stock market higher last week.
The Dow Jones Industrial Average rose 0.94%, while the Standard & Poor’s 500 climbed 1.16%. The Nasdaq Composite index led, picking up 2.06%. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.46%.1,2,3
Stocks rallied on renewed confidence in the economic recovery, lower inflation worries, and rising comfort with Fed officials talking about the potential for easing of its monthly bond purchases. Technology, communication services, and reopening stocks were among the market leaders.
Investor sentiment was buoyed late in the week by an encouraging jobless claims number and the unveiling of a Republican infrastructure proposal. A somewhat hotter-than-expected inflation indicator on Friday did nothing to dampen optimism as stocks added to their gains ahead of the three-day Memorial Day weekend.4,5
Jobless Claims Reach Pandemic Lows
In a sign of further recovery in the labor market, the number of initial jobless claims fell to a pandemic low, continuing the downward trend in worker layoffs. New jobless claims totaled 406,000 for the week, well below the pandemic high of nearly 1.5 million, though still above the 2019 weekly average of 218,000.5
The history of Memorial Day extends back to the Civil War when it was referred to as Decoration Day. We join all Americans in honoring those who died in the performance of their military service to protect the freedoms we enjoy today. These were remarkably brave men and women whose sacrifice will never be forgotten.
This Week: Key Economic Data
Tuesday: Institute for Supply Management (ISM) Manufacturing Index.
Wednesday: Automated Data Processing (ADP) Employment Report.
Thursday: Jobless Claims. Institute for Supply Management (ISM) Services Index.
Friday: Employment Situation. Factory Orders.
Source: Econoday, May 28, 2021
This Week: Companies Reporting Earnings
Tuesday: Zoom Video Communications, Inc. (ZM).
Wednesday: Splunk (SPLK).
Thursday: Lululemon Athletica (LULU), Broadcom (AVGO), Docusign, Inc. (DOCU), CrowdStrike Holdings (CRWD).
Source: Zacks, May 28, 2021
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Plan Ahead for Vacation Home Rentals
With summer just around the corner, many homeowners who own vacation rentals are preparing for the busy season. There's a lot to consider when looking at the tax situation of vacation home rentals.
If you receive money for the use of your primary residence, you may have to report this rental income on your tax return. This means that the "vacation home rental" classification can apply to you, even if you don't own multiple short-term rental properties. If the property is used as a home, the rental expense deduction is limited. In the case of a property used as a home, the rental expenses can't be more than the rent received on the property itself. If the home is rented out for less than 15 days during the year, the rental income may not need to be reported.
A vacation home is a house, apartment, condominium or other dwelling that you use to generate income, but you can also use as a residence during the year. For tax purposes, it's critical to divide the expenses of a property into personal and business purposes.
To report rental income and rental expenses, use Schedule E. In addition, rental income may also be subject to Net Investment Income Tax.
* 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