Investment Commentary –October 5th, 2016

Market Indices as of Market Close September 5th, 2016
Dow 18,228 (4.93% YTD)
S&P 2,159 (5.66% YTD)
NASDAQ 5,305 (6.16% YTD)
Global DOW 2,471 (2,033 week low/high 2,489)
10-year Treasury 1.70 (1.32 52 week low /2.38 high)
Gold 1,269 ($1,053 52 week low /high $1,384)
Oil $49.70 ($33.28 52 week low /high $54.34)

MarketWatch: Stocks end 2-days of losses to finish higher as energy, financial sectors rally

U.S. stocks closed higher Wednesday, trading off session highs as they rebounded from losses of the past two sessions, fueled by rising oil prices. A resurgent services sector also helped to lift demand for equities and other assets perceived as risky.

The S&P 500 index SPX, +0.43% added 9.24 points, or 0.4%, to close at 2,159.73. The financials and energy sectors finished up 1.5% and 1.4%, respectively, while telecom, utilities and real estate, weighed on the index.

The Dow Jones Industrial Average DJIA, +0.62% finished up 112.58 points, or 0.6%, at 18,281.03, topped by more than 2% gains in both Caterpillar Inc. CAT, +2.18% and Goldman Sachs Group Inc. GS, +2.55% Verizon Communications Inc. VZ, -0.81% which closed down 0.8%, was the average’s worst performer. For the week so far, the blue-chip average is down 0.2%, and the S&P 500 is down 0.4%.
The Nasdaq Composite Index COMP, +0.50% rose 26.36 points, or 0.5%, to end at 5,316.02, and is up 0.1% for the week to date.

Wednesday marked the first finish in positive territory for the main U.S. stock-index benchmarks this week.

Firm gains were partially fueled by a strong reading from the Institute for Supply Management, which said its services index rocketed to a reading of 57.1, up from 51.4 in August. A similar report from data provider Market, which isn’t as widely followed, showed a smaller gain.

Reuters: U.S. top court leans toward making insider trading prosecutions easier

U.S. Supreme Court justices hearing a closely watched insider trading case indicated on Wednesday they were likely to make it easier for prosecutors to pursue such charges against traders, but questioned where to draw the line.
The appeal by Bassam Salman, an Illinois man convicted after making nearly $1.2 million trading on information that came from his brother-in-law, was the first insider trading case to come before the justices in two decades.
Because Congress never defined what constitutes insider trading, courts and regulators have been forced to supply the answer.

Several justices appeared skeptical about Salman’s stance that he could not be convicted and later sentenced to three years in prison for trading on information about deals involving clients of Citigroup Inc (C.N), where the brother-in-law worked.
Alexandra Shapiro, Salman’s lawyer, contended prosecutors in insider trading cases must prove that an alleged source of corporate secrets, like the brother-in-law, received a tangible benefit like cash in exchange for any tips.

A majority of the justices appeared ready to uphold Salman’s 2013 conviction on conspiracy and securities fraud charges, asking why someone providing inside information as a no-charge gift to a family member could not be found to have benefited.
“You certainly benefit from giving to your family,” Justice Anthony Kennedy said. “It ennobles you, and in a sense … it helps you financially because you make them more secure.”

Justice Elena Kagan suggested that adopting the position advocated by Salman, 57, would overturn decades of legal principle that had helped protect the markets’ integrity.”You’re asking us essentially to change the rules in a way that threatens that integrity,” Kagan said.

Prosecutors contend requiring proof of a tangible benefit would make pursuing insider trading cases tougher, potentially preventing charges against executives who tip friends or relatives without getting anything in return.

Despite appearing unlikely to back Salman’s appeal, some justices suggested a line should be drawn clarifying when people can be prosecuted for disclosing corporate secrets.

“I’m not worried so much about this case,” Justice Stephen Breyer said. “I am worried about line-drawing.”

A ruling is due by June.

Lord Abbott: Oktoberfest for IRA Planning? Important Deadlines Ahead

Mark your calendars to maximize retirement savings opportunities.

With October almost here, it’s hard not to view it as the true heart of autumn: crisp days, cool nights, brilliant sunshine, fiery foliage, festive football, and haunted Halloween. But there also are a number of important IRA deadlines that occur throughout the month.

To learn more about these deadlines and the dates to put on your calendar, read on. Also note that while this is not IRA specific, October 15 is the last date to file an individual income tax return that’s on extension.

October 1
This is the last date in which an individual can establish a SIMPLE IRA plan, effective for 2016. Technically, the deadline this year is Monday, October 3 (October 1 falls on a Saturday)

October 15
This is the deadline for making 2015 SEP IRA contributions, if the employer’s tax return is on extension to the October 15.
October 31
This date also is the deadline for recharacterizing a 2015 Roth IRA conversion. In addition, an investor can recharacterize a Roth IRA contribution to a traditional or IRA or an IRA contribution to Roth IRA. The former is common when investors determine that they don’t income-qualify to contribute to a Roth IRA.

Last, this date is the deadline for removing an excess IRA contribution in order to avoid a 6% penalty on the excess amount.

THIS DAY IN FINANCIAL HISTORY: October 6th 1997 Stocks Reach Yet Another Milestone

On this day, both the S&P and the Nasdaq climbed to new record highs. The Nasdaq rose to 1,736.10 points, while the S&P climbed to 983.12.

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.