Investment Commentary –October 26th, 2022
Year to Date Market Indices as of October 25th, 2022

• Dow 31,805 (-11.52%)
• S&P 3,840 (-19.02%)
• NASDAQ 11,513 (-29.39%)
• OIL $86.20 (5.00%)
• Barclay Bond Aggregate (-17.14%)

IRS: These are your 401(k) and IRA contribution limits for 2023

It may be time to up your 401(k) contributions. The IRS is increasing the limit by $2,000 for 2023, the agency announced Friday.

Cost of living adjustments will bring the 2023 limit to $22,500 (up from $20,500) for individual contributions to retirement accounts including 401(k)s, 403(b)s, most 457 plans and Thrift Savings Plans.

Individuals 50 and older can contribute an additional $7,500, increasing for the first time since 2020. That brings the total contribution limit for those 50 and older to $30,000.

Taxpayers who contribute to individual retirement accounts (IRAs) can put away an extra $500 starting in 2023. The limit increases to $6,500, plus $1,000 in catch-up contributions for those 50 and older. The catch-up contribution limit is the same as last year.

Income limits for Roth IRA contributions will increase in 2023 as well. The income phase-out range for Roth IRAs will be between $138,000 and $153,000 for single filers and heads of household (up from between $129,000 and $144,000).

The range for married couples filing jointly goes up to $218,000 to $228,000 (from between $204,000 and $214,000). The phase-out range for married individuals filing separately remains at $0 to $10,000.

Individuals can contribute up to $15,500 to SIMPLE accounts (savings incentive match plan for employees), up from $14,000 in 2022.

Market-moving news

Price check ahead
A report scheduled to be released on Friday will be closely watched for any signs that U.S. inflation might edge downward anytime soon. The government will update its Personal Consumption Expenditures Price Index, the Fed’s preferred gauge for tracking inflation. The most recent monthly report showed that PCE inflation excluding food and energy prices rose 4.9% in August from a year earlier, up from 4.7% the previous month

Regaining traction
The major U.S. stock indexes started the week and ended it with sizable daily rallies, rebounding from the previous week’s mostly negative results. The S&P 500, the NASDAQ, and the Dow all finished with weekly gains of around 5% as investors focused on quarterly earnings and prospects for further interest-rate increases.

Labor market resilience
Despite concerns about rising interest rates and recessionary trends, a key labor market indicator continues to show signs of strength. The government reported that American workers submitted 214,000 initial claims for unemployment benefits during the latest weekly period. That figure is down from 226,000 the week before and is close to the historically low level that they’ve averaged year to date.

Earnings outlook
The subdued expectations for earnings season improved slightly as a second week’s batch of quarterly results came in. As of Friday, third-quarter net income was expected to rise 1.5% compared with the same period a year earlier, based on S&P 500 companies that have already reported combined with projections for those still scheduled to report. In the previous week, analysts had forecast growth of 1.3%

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. (Market Indices) (Around the Web & Upcoming Events) (YTD Performance Chart)