Investment Commentary –December 5th, 2017

Market Indices as of Market Close December 5th, 2017
Dow 24,180 (22.36% YTD)
S&P 2,629 (17.45% YTD)
NASDAQ 6,762 (5.62% YTD)
Global DOW 3,007 (18.67% YTD)
Gold $1,268 (8.50%)
OIL $57.42 (0.72%)
US 10Y Treasury 1.257 (-8.83%)
Barclay Bond Aggregate (3.30% YTD)

Tech rally burns out, leaves Wall Street lower

(Reuters) – Wall Street fell on Tuesday as a technology rebound lost steam and Walt Disney Co (DIS.N) shares dipped, while investors assessed how a Republican U.S. tax overhaul would impact corporate earnings. The S&P 500 fell for a third straight session, a streak not seen since early August, trimming the index’s rally this year to 17 percent.

The year’s top-performing sector was still down nearly 4 percent over the past week, with investors shifting money to banks, retailers and other stocks seen as likely to benefit the most from tax cuts promised by U.S. President Donald Trump.

The bill passed on Saturday by Republican senators included a last-minute change retaining the corporate alternative minimum tax, or AMT, which had initially been removed.

News around the web:

Tug of war

Financial service stocks led the Dow and the S&P 500 higher on Wednesday, but the NASDAQ Composite tumbled 1.3%, its biggest daily decline in three months. Information technology stocks make up a big part of the NASDAQ, and those stocks retreated sharply.

Economic momentum

The U.S. economy expanded at a 3.3% annual rate in the third quarter, up from the government’s initial 3.0% estimate. The updated figure represents the fastest annual growth rate in three years, and it could increase the likelihood that the U.S. Federal Reserve Board will lift interest rates at its December 12–13 meeting.

On tap this week:

ADP National Employment Report, ADP.
Labor productivity and costs, U.S. Bureau of Labor Statistics

Monthly jobs and unemployment report, U.S. Bureau of Labor Statistics


Leaders this past week were Services, Financials and Consumer Goods. Laggards were Healthcare, Technology and Utilities.

JP Morgan Roth IRA conversions explained

Why consider converting? Tax-free retirement income

Retirement is becoming longer and more expensive, with many of the costs likely to be paid with income generated from your investments.

Unfortunately, much of that income may be lost to taxes. Traditional IRAs, 401(k) s and other employer-sponsored plans typically incur taxes when you can least afford them — when you’re retired and no longer earning a paycheck. Roth IRAs offer the potential for tax-free income throughout retirement.

How it works: Pay taxes now, make tax-free withdrawals later by converting some or all of the money in tax-deferred accounts to a Roth IRA; you pay taxes now at current rates. In exchange, qualified withdrawals are tax-free in the future, when both your account balance and tax bracket may be higher.

• Reduce your tax burden during retirement by paying taxes now
• Keep more of what you earn to supplement Social Security and meet living expenses
• Avoid mandatory withdrawals to keep your account growing tax-free
• Maximize retirement income potential to reduce the risk of outliving your money

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.

Click to access SA-ROTHIRA.pdf