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Here's what happened this week:
Monday: Stocks have their best day in 4 weeks, and here’s why Tuesday: Shocking: Vaccine doesn’t work? – DOW drops 390 points Wednesday: Crazy: Fed sees “extraordinary amount of uncertainty” – and Nasdaq is only 5% away from all-time highs! Thursday: Stocks down, but Billionaires increased their net worth by $434 billion Friday: Today’s market action felt like deja vu from February
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The one thing about change is that it doesn't change.
It just keeps changing. The world does change... some things don't. But one thing's for sure. If what you did before doesn't work anymore (in trading or anything), it probably won't magically start working again. That's change. Sticking your head in the sand about it won't fix the problem. Hoping. Wishing. Whining. Weeping. Groaning. Ignoring. Denying. None of those will CHANGE things back to the way they were. That’s a definite going forward. Adapt to the change... or DIE (either a slow lingering death or a fast and ugly one). Pull your head out of the sand... adapt to change. Embrace it. Find your groove... and work the hell out of it until you're forced to change again. That's how the world works, and the Internet makes that change happen even faster. ... and that will probably NEVER change. ;-) Here's what happened LAST week:
Monday: Good news or bad news? – Stocks can’t figure it out and struggle to find direction Tuesday: Stocks don’t like Dr. Fauci’s “more suffering and death” comments… Wednesday: Stocks tank after Powell says THIS is “worse than any recession since World War II” Thursday: 2.9 million jobs lost last week…and stocks rally? – Here’s why: Friday: The craziness continues: Worst Retail Sales decline EVER – and stocks rally…
Here Are Today's Highlights:
This is the worst decline in GDP we’ve seen since 2008… We all know things are bad right now...like REAL bad! Everyday there’s a new terrible headline. And though I believe staying informed is important, I think it’s also important to take it in small doses right now. It’s sort of like trading in that, at the end of the day, I can’t control what the market will do...I have to go with what the market is giving me at that time. Let me tell you from experience...when you fight the markets, the markets will always win. It’s like I have printed on my mug “Trade What You SEE, Not What you THINK.” Because probably much like you, on multiple occasions, my response has been “OMG!” to a new report or headline...yet, as of this morning the Nasdaq (NDX) is less than 10% from its all time highs: After the bell TSLA and FB report Earnings. Lets see how the markets respond tomorrow. Here's what happened this week:
Monday: Stocks start the week with losses – all about earnings now? Tuesday: Stocks at best levels in 4 weeks – Is the market crash over? Wednesday: Stocks have a rough day after ugly economic reports Thursday: Stocks jump on possible coronavirus breakthrough Friday: Stocks higher for 2nd week in a row on hopes for treatment and optimism about reopening the economy Monday: DOW rallies 1,600 points on hopes that coronavirus has peaked Tuesday: Rally running out of steam? DOW ends negative after ugly reversal. Wednesday: Bernie Sanders drops out of presidential race and stocks rally Thursday: Best week since 1974! Friday: Markets closed (Good Friday)
Here's what happened last week: Monday: Unemployment could hit 32%…and “everything will be fine?” Tuesday: Worst quarter…EVER. Wednesday: Trump says “be prepared for a very, very painful two weeks” – and the DOW drops 974 points Thursday: Another 6 million+ unemployed and stocks rally?!?! Friday: Unemployment jumps to 4.4% and 3M taking heat for exporting face masks – stocks end week with losses Ok so for some reasons people are asking me about the stimulus plan. First let me say I am not a CPA nor do I play one on TV. So I think its best if I share the info my CPA sent me. Hope it helps.
I hope everyone is doing well, staying safe and not getting to stir crazy. As you probably know, the Stimulus Relief package (CARES Act) was passed by the House and Senate and awaits the President’s signature. There are many tax provisions in the bill. Many details are not yet available but I will summarize the major provisions here: Checks to individual taxpayers Individual taxpayers will receive a recovery rebate check of $1,200 per individual ($2,400 for married couples filing jointly), plus $500 for each qualifying dependent child, as soon as the U.S. Department of the Treasury (Treasury) and IRS are able to process these payments. The recovery rebate begins to phase out for taxpayers whose adjusted gross income exceeds $150,000 for joint returns, $112,500 for head of household and $75,000 for all other taxpayers. The amount of recovery rebate a taxpayer receives is based on information reported on the taxpayer’s 2019 tax return (or 2018 if the taxpayer has not yet filed a 2019 return). For individuals who did not file a return in either 2018 or 2019, the IRS will use the individual’s 2019 Social Security income. Within 15 days of payment, the IRS will send each eligible taxpayer a letter to a last known address with details of the amount, date and method of payment, along with a number to contact if the taxpayer did not receive the payment Unemployment Insurance The CARES Act provides expanded unemployment insurance benefits for individuals (including those who are self-employed) who become unemployed, partially unemployed or are unable to work due to COVID-19 on or after January 27, 2020, and on or before December 31, 2020. In general, the unemployment benefit a recipient receives is increased by $600 per week (referred to as Federal Pandemic Unemployment Compensation). Benefits may vary by state The very big news here is that the self employed (business owners) are now eligible for unemployment benefits Retirement Funds -Individuals can withdraw up to $100,000 from their retirement accounts. The distributions are still taxable but the tax can be spread over a three year period. The 10% early distribution penalty is waived. This only applies if you or a spouse is diagnosed with the Virus OR if you have experienced any adverse financial consequences due to the Pandemic (basically everyone). The funds can also be repaid to the retirement plan within three years, thereby avoiding any income recognition. -Required minimum distributions are temporarily waived for certain accounts (need more detail here). -The maximum loan that can be taken from a retirement account (not an IRA) has increased to $100,000 from $50,000 Major Business Provisions New loan program under the SBA (I will also send a separate email regarding this provision as more detail becomes available) The 7(a) loan program, administered by the U.S. Small Business Administration (SBA), provides financial assistance to small businesses. The CARES Act authorizes an additional $349 billion for general 7(a) business loans. For SBA Express loans, the statutory $350,000 limit is increased to $1 million through December 31, 2020. In general, the SBA responds to Express loans within 36 hours (compared to standard 7(a) loans, which may take weeks to process). Recipients of 7(a) loans may be eligible for loan forgiveness on covered loans in an amount equal to the sum of the costs incurred on or after February 15, 2020, and on or before June 30, 2020, due to payroll cost, mortgage interest payments, rent or utility payments. The CARES Act also gives the SBA authority to provide paycheck protection loans to help employers cover costs, including wages, paid leave and state taxes on employee wages. These benefits are available to employers with no more than 500 employees, including nonprofit organizations. Big news here is in the second paragraph. Employee Retention credit (I will also send a separate email regarding this provision as more detail becomes available) For wages paid after March 12, 2020, and before January 1, 2021, eligible employers (including tax-exempt organizations) would be allowed a new refundable payroll tax credit equal to 50 percent of the qualified wages paid. The total eligible wages per employee are $10,000, resulting in a maximum credit of $5,000 per employee. Delay of payment of employer payroll and self-employment taxes (I will also send a separate email regarding this provision as more details become available) The CARES allows employers to delay remittance of their share of Social Security tax that would have been deposited between the date of the CARES Act’s enactment and December 31, 2020. Instead, 50 percent of those taxes must be deposited by December 31, 2021, and the remainder deposited by December 31, 2022. Similar relief is provided for self-employed individuals under the CARES Act. However, those taxpayers still must pay 50 percent of the Social Security tax portion of these self-employment taxes, i.e., the employee’s share, in the same manner as usual. Employers who have had indebtedness forgiven under the Small Business Act are not eligible for this payroll and self-employment tax deferral relief. |
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May 2020
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