Market Scorecard
S&P 500 increased by 5.9%, YTD 22.1%
Nasdaq 100 rose 2.1%, YTD 20%
Dow Jones Industrial Average jumped by 8.7%, YTD 13.9%
Bloomberg U.S. Aggregate Bond Index up 5.2%, YTD 4.4%
The S&P 500: Four Straight Positive Quarters
It’s four positive quarters in a row for the broadest measure of the U.S. economy, the S&P 500, with a remarkable seven out of the last eight quarters being positive. Long-term investors have been rewarded for the last two years for adhering to their Investment Policy Statement and maintaining their asset allocation to equities.
Historically September is the worst month for stocks, with an average loss of 1.1% for the S&P 500. This time the index gained 2.1% in September.
The Fed’s Recalibration, Inflation and the Labor Market
Expectations for lower rates combined with declining inflation remain front and center. A surprising 50-basis-point (bps) cut occurred in September, more than the expected 25 bps. The Fed highlighted a “recalibration” message. The Fed has a dual mandate pursuing economic goals of maximum employment and price stability. It tied the rate cut to a need to stimulate the labor markets believing the downward movement in inflation will continue. Alas, that may not be as hoped for by the Fed.
Inflation numbers reported in October came in higher than expected. The Consumer Price Index (CPI) rose 0.2% in September versus the forecast of 0.1%. While two more cuts were anticipated, with varying ranges of 25 to 50 bps each, the latest inflation reports will dampen both the number of cuts and extent of each one.
As with inflation, the reports on the labor market did not align with the Fed’s outlook either. Unemployment edged up to 4.2% at the end of August, but back down to 4.1% in September. There also were substantial revisions to the labor market data. Monthly payroll growth slowed to 116,000 for the three months through August. September’s robust numbers of 254,000 bring the three months average number to 186,000, which is not an environment necessitating 50 bps changes or even back-to-back month adjustments
Your Required Minimum Distributions (RMDS)
If you are 73 or older, it’s important to remember your Required Minimum Distributions (RMDs). Here are key reminders:
• Deadline: RMDs must be taken by December 31 each year.
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• Tax Penalty: Failure to take your RMD results in a hefty penalty—up to 25% of the amount not withdrawn.
• RMD Calculation: Your RMD is based on your account balance as of December 31 of the prior year.
• Charitable Contributions: Consider using a Qualified Charitable Distribution (QCD) from your IRA to satisfy your RMD requirement.
Charitable Donations and DAFS
Charitable donations and Donor-Advised Funds (DAFs) provide two powerful ways to enhance your philanthropic impact while also achieving financial benefits. Direct donations to causes you care about can reduce your taxable income while supporting important missions.
DAFs offer more flexibility by allowing you to take an immediate tax deduction, invest the funds for growth, and distribute them to charities over time. Bunching donations can help aggregate itemized deductions, bringing them over the standard deduction amounts. Get in touch with us to determine which strategies may be best for you.
Planning Ahead
Platt Wealth Management team is here for you to discuss any changes or new milestones in your life. We are always available to assist you with any financial matters of concern to you and look forward to continuing to serve as your partner along your financial journey.