The Markets
Optimism headed south on Friday.
After rising for most of the week, stock markets lost momentum last Friday as economic data raised doubts about further Federal Reserve rate cuts, reported Rita Nazareth of Bloomberg.1 Late in the day, President Trump announced new tariffs would be imposed this week, and stocks dropped into negative territory.2
Consumer Sentiment Fell Sharply
Last week, the University of Michigan Consumer Sentiment Index reported that consumer confidence, which tumbled four percent in January, fell another five percent in February.3
“Consumer sentiment fell for the second straight month, dropping about 5 [percent] to reach its lowest reading since July 2024. The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups. Furthermore, all five index components deteriorated this month, led by a 12 [percent] slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy. Expectations for personal finances sank about 6 [percent] from last month, again seen across all political affiliations, reaching its lowest value since October 2023. Many consumers appear worried that high inflation will return within the next year,”3 wrote Surveys of Consumers Director Joanne Hsu.
Rising inflation could keep the Federal Reserve from lowering rates further.1 Survey participants expected prices to rise 4.3 percent over the next 12 months. That is a full point higher than in the previous month, when they anticipated prices would rise by 3.3 percent. Over the longer term, inflation expectations were steadier, rising from 3.2 percent to 3.3 percent.3
Tariff Talk Took A Toll
In a Friday afternoon press conference, President Trump indicated he will implement reciprocal tariffs next week, although he did not specify which countries will be affected. “The tariffs would be the next volley in a trade war pitting the U.S. against some of its largest trading partners. Trump announced levies of 25 [percent] against Canadian and Mexican imports last weekend, though suspended them for a month after the countries agreed to increased border security and measures to reduce the flow of illegal drugs into the [United States]. A separate 10 percent tariff against Chinese imports went into effect, and China responded with tariffs of its own,” reported Joe Light of Barron’s.2
Employment Remained Relatively Stable In January
The U.S. employment report showed hiring was solid in January, but less robust than expected, reported Lucia Mutikani of Reuters. The data showed “strong wage growth last month, with average hourly earnings surging by the most in five months, which should keep consumer spending supported.”4
While a steady labor market was encouraging, investors have some concerns about the future, reported Megan Leonhardt of Barron’s. “Looking ahead, employment conditions could face more headwinds as federal policy changes take hold, and many economists expect to see further weakening within the U.S. labor market this year. The shifts in trade and immigration policies, in particular, could upend the relative stability currently on view in the labor market, as well as impede the downward progress inflation has made.”5
On Friday, major United States stock indices gave back gains from earlier in the week and ended the week lower.6 The yield on the benchmark 10-year U.S. Treasury moved lower over the full week before rising on Friday.7
Data as of 2/7/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -0.2% | 2.5% | 20.6% | 10.4% | 12.6% | 11.4% |
| Dow Jones Global ex-U.S. Index | 0.6 | 4.1 | 8.5 | 0.4 | 2.7 | 2.7 |
| 10-year Treasury Note (yield only) | 4.5 | N/A | 4.1 | 1.9 | 1.6 | 2.0 |
| Gold (per ounce) | 2.2 | 10.1 | 40.8 | 16.6 | 12.8 | 8.8 |
| Bloomberg Commodity Index | 1.9 | 5.5 | 7.8 | -1.6 | 6.9 | 0.1 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
CONSIDERING PLACES TO RETIRE. A recent survey found that about one-third of Americans plan to retire in their current city, 42 percent want to move to a different city or state, and 16 percent intend to retire outside the United States, according to The Currency. A key factor in decisions about where to retire is financial security. More than 85 percent of participants wanted to retire in a place where they can maintain their current standard of living without financial stress.8
Where Are the Top Places To Retire In 2025?
According to Adam McCann of WalletHub, the top three states for retirement (based on 46 factors that include tax rates, cost of living, quality of medical care, and entertainment) are:
- Florida ranks first overall, and second for affordability.9 The cost of living in the state has risen over the past few years driven by housing and insurance costs, though. The average homeowners’ insurance premium rose by almost 60 percent from 2019 to 2023, reported Michelle Conlin and Matt Tracy of Reuters. 10,11
- Minnesota ranks second overall, and first for healthcare. The state has some of the best healthcare in the country. The state boasts “the most health care facilities, the second-most nursing homes, and the third-most home health care aids per capita. Its geriatrics hospitals also rank as the fifth best in the nation. Due to the great health care conditions within the state, Minnesota has the third-lowest percentage of seniors with a disability, the fourth-lowest percentage with poor mental health, and the fifth-highest percentage who are in good physical health.”9
- Colorado ranks third overall. It is a tax-friendly state with no estate or inheritance taxes. “In addition, it has the seventh-lowest poverty rate for residents ages 65+… plenty to keep seniors active and engaged. For example, it has the sixth-most volunteer opportunities, the ninth-most scenic byways and the 11th-most theaters per capita.” 9
About two-thirds of Americans say that saving for retirement is a financial priority, and that their happiness in retirement depends on achieving their retirement savings goals. If you would like to learn more about saving for retirement, get in touch. We can help.
Weekly Focus—Think About It
“It is never too late to be what you might have been.”12
—George Eliot, novelist
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
[1] https://www.bloomberg.com/news/articles/2025-02-06/stock-market-today-dow-s-p-live-updates (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-10-25_Bloomberg_Stocks%20Slide%20as%20Tariff%20Angst%20Adds%20to%20Price%20Worries_1.pdf)
2 https://www.barrons.com/articles/trump-japan-reciprocal-tariffs-d70ebe70?mod=Searchresults (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-10-25_Barrons_Trump%20to%20Announce%20Reciprocal%20Tariffs_2.pdf)
3 http://www.sca.isr.umich.edu (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-10-25_UM%20Survey%20of%20Consumers_3.pdf)
5 https://www.barrons.com/livecoverage/january-jobs-report-data-today (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-10-25_Barrons_Why%20Januarys%20Weak%20Jobs%20Report%20Makes%20Rate%20Cut%20Less%20Likely_5.pdf)
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-10-25_Barrons_Data_6.pdf)
8 https://www.empower.com/the-currency/play/retire-well-live-little-research
9 https://wallethub.com/edu/best-and-worst-states-to-retire/18592
10 https://www.gobankingrates.com/money/economy/cost-of-living-by-state/
The Markets
Wait! What just happened?
Last week, investors were inundated with market-moving data and news. Stock markets gyrated as investors tried to process everything that was occurring. Here’s some of what happened:
China surprised the artificial intelligence industry
The week got off to a rough start with major United States stock indices declining sharply on concerns about competition from China in the artificial intelligence (AI) space. AI-related technology stocks sold off after a Chinese start up released a less expensive AI model, raising concerns that current tech stock valuations may be too rich, reported Rita Nazareth of Bloomberg.1 Over the course of the week, markets “clawed back most of those losses thanks to encouraging earnings and company strategy updates, and as some investors re-evaluated the risks U.S. firms face from Chinese competition,” reported Barron’s.2
Companies performed well
Last week, fourth quarter earnings reports bolstered investor optimism. So far, 36 percent of the companies in the Standard & Poor’s (S&P) 500 Index have reported on fourth quarter earnings. Seventy-seven percent of those companies have reported earnings that exceeded estimates, reported John Butters of FactSet. 3
Economic growth continued
In addition to upbeat earnings news, economic data released last week showed the U.S. economy continued to grow in the fourth quarter of 2024. “The [economic growth] figures cap another solid year for the world’s largest economy that defied expectations for a marked slowdown as consumers hung tough in the face of persistent inflation and high borrowing costs. The economy grew 2.8 [percent] in 2024 after expanding 2.9 [percent] and 2.5 [percent] in the prior two years, respectively,” reported Molly Smith of Bloomberg.4
Inflation persisted
Last week’s inflation data was less encouraging. The Personal Consumption Expenditures Index, which is one of the Federal Reserve’s favored inflation measures, showed that headline inflation moved higher in December, rising to 2.6 percent annualized from 2.4 percent annualized in the previous month. Core inflation remained steady at 2.8 percent annualized.5
The Federal Reserve paused
The Fed left rates unchanged last week. The range for the federal funds rate remained 4.25 percent to 4.50 percent. The accompanying statement said, “the risks to achieving [the Fed’s] employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”6 Stocks moved lower initially but calmed after the Fed Chair offered assurances that monetary policy is well-positioned for whatever may be ahead, reported Caroline Valetkevitch of Reuters.7
Uncertainty abounded
Government policy proposals arrived at a rapid pace, creating uncertainty. The White House Office of Management and Budget issued a memo temporarily pausing disbursement of government grants and loans, but no one was certain how the pause would affect the economy. “The federal government gives $1 trillion in grants to state and local governments alone, for everything from physical infrastructure and public safety to health and social services. Removing this money from the economy would represent a huge economic shock,” reported Samantha Sanders and Josh Bivens of the Economic Policy Institute.8 A federal judge temporarily blocked the freeze.
Tariffs threats loomed
Tariff talk had a more immediate effect on markets than the spending pause. U.S stocks slipped lower on Friday after the White House indicated it will move forward with tariffs on Canada, Mexico, and China, reported Connor Smith of Barron’s.9 “Investors are bracing for a looming hit to U.S. corporate profits and pressure on inflation if President Donald Trump makes good on his tariff threats, with markets seen as not fully factoring in risks from higher levies on foreign imports,” reported Laura Matthews, Lewis Krauskopf and Suzanne McGee of Reuters.10
Investors had a lot to consider last week. As the dust settled and the exchanges closed for the week, the Dow Jones Industrial Average had recovered its losses and moved slightly higher. The S&P 500 and Nasdaq Composite Indices had regained some losses but ended the week lower. All three indices had gains over the full month, reported Lisa Kailai Han of CNBC.11 The yield on the benchmark 10-year U.S. Treasury fell sharply on Monday and moved higher over the week.12
Data as of 1/31/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | -1.0% | 2.7% | 24.7% | 10.2% | 13.4% | 11.6% |
| Dow Jones Global ex-U.S. Index | 0.5 | 3.4 | 7.8 | 0.6 | 3.0 | 2.8 |
| 10-year Treasury Note (yield only) | 4.57 | N/A | 4.0 | 1.8 | 1.5 | 1.7 |
| Gold (per ounce) | 1.3 | 7.7 | 37.0 | 16.1 | 12.2 | 8.3 |
| Bloomberg Commodity Index | -1.1 | 3.6 | 3.8 | -1.8 | 6.5 | 0.1 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
WHAT DO YOU KNOW ABOUT THE BIG GAME AND GAME DAY PARTIES? You might be surprised to learn that many of the friends and family who gather to watch the Big Game are more interested in the snacks than the game. A recent survey from Talker Research found that 48 percent of respondents care who wins the game. Fifty-four percent said the food served would decide whether a Big Game was great.13 See what you know about the Big Game and game day gatherings by taking this brief quiz.
- Which team has never played in a Big Game?14
- Cleveland Browns
- Jacksonville Jaguars
- Houston Texans
- All of the above
- What are the top three foods guests want to eat during the Big Game?13
- Hot wings, barbecue, and seven-layer dip
- Chili, pigs-in-a-blanket, and chips
- Nachos, pizza, and brownies
- Buffalo chicken dip, sliders, and cowboy caviar
- What do people most look forward at Big Game gatherings?15
- The game
- The half-time show
- The commercials
- The drinks
- Approximately, how much do Big Game tickets cost this year?16
- $2,500 to $25,000
- $3,500 to $35,000
- $4,500 to $45,000
- $5,500 to $55,000
What’s your favorite part of the Big Game?
Weekly Focus—Think About It
“The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.”17
—Vince Lombardi, NFL coach
Answers: 1) d; 2) a; 3) b; 4) d
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
[1] https://www.bloomberg.com/news/articles/2025-01-27/stock-market-today-dow-s-p-live-updates (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-03-25_Bloomberg_Stock%20BUyers%20Step%20In%20to%20Boost%20Tech_1.pdf)
2 https://www.barrons.com/news/asian-markets-mostly-rise-but-worries-over-tariffs-ai-linger-5bee249b (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-03-25_Barrons_Stock%20Markets%20Gain%20at%20End%20of%20Turbulent%20Week_2.pdf)
3 https://insight.factset.com/sp-500-earnings-season-update-january-31-2025
4 https://www.bloomberg.com/news/articles/2025-01-30/us-economy-expands-at-2-3-rate-to-end-2024-on-solid-note (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-03-25_Bloomberg_US%20Economy%20Ends%202024%20with%20GDP%20Growth_4.pdf)
5 https://www.bea.gov/sites/default/files/2025-01/pi1224.pdf [Table 7]
6 https://www.federalreserve.gov/newsevents/pressreleases/monetary20250129a.htm
7 https://www.reuters.com/markets/us/nasdaq-futures-up-chip-stocks-rise-ahead-fed-decision-2025-01-29/
8 https://www.epi.org/press/federal-funding-freeze-risks-throwing-the-u-s-economy-into-chaos/
9 https://www.barrons.com/livecoverage/stock-market-today-013125?mod=Searchresults (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/02-03-25_Barrons_Dow%20Falls%20340%20Points%20but%20Index%20Best%20Since%20Jan%2019_9.pdf)
11 https://www.cnbc.com/2025/01/30/stock-market-today-live-updates.html
[1]4 https://www.fanduel.com/research/super-bowl-history-facts-records-and-trivia
[1]6 https://www.reuters.com/sports/nfl/everything-you-need-know-about-2025-super-bowl-2025-01-28/ [1]7https://www.brainyquote.com/quotes/vince_lombardi_125250
The Markets
What moves financial markets? The short answer is: Lots of things!
Almost one hundred years ago, Benjamin Graham and David L. Dodd wrote, “the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.”1 Today, the same holds true. Stock prices are influenced by many factors. Here are three examples:
- Market trends. Last year, companies with strong momentum characteristics—meaning their prices were trending higher—generally did well. “The main rationale behind momentum investing is that once a trend is well-established, it is likely to continue,” reported the Corporate Finance Institute.2
The idea may seem contrary to the primary rule of investing, sell high and buy low, but the approach is backed by academic research. It “captures the tendency for market trends to persist for a while, whether it’s because more investors are jumping in or are late to absorb new information,” reported Justina Lee of Bloomberg. As one researcher told Lee, “Momentum investing is great until it’s not.”3
- Investor sentiment. Emotion plays a significant role in stock market volatility. For example, last week, we saw a relief rally. Asian stocks rose and the Standard & Poor’s (S&P) 500 Index hit a new high because the news was less bad than investors had expected.4 Isabelle Lee, Lu Wang, and Phil Serafino of Bloomberg explained:
“Despite the protectionist threats of the campaign trail, Trump held off on imposing levies on key trading partners this week, and just last night delivered his most mollifying message yet to China by saying that he would rather not have to use tariffs against the world’s second-biggest economy. Cue a relief rally across markets.”4
- Company fundamentals. Graham and Dodd recommended fundamental analysis to identify stocks with good value. Investors who rely on fundamental analysis study companies’ financial statements, and consider assets and liabilities, revenue and expenses, earnings and cash flow, and other factors. Then they do some math to evaluate the company’s value using various measures like the price-to-earnings ratio. In theory, a company with a low share price relative to its earnings is a good value.5
No one knows how markets will perform over the short term. That’s one reason it’s important to hold a diversified portfolio. Owning investments that perform differently in various market conditions helps manage investment risk and may smooth returns over time.
Last week, major U.S. stock indices rose.6 The S&P 500 moved higher over the week, the Dow Jones Industrial Average gained 2.2 percent, and the Nasdaq Composite rose 1.7 percent, reported Paul R. LaMonica of Barron’s.7 Yields on U.S. Treasuries were relatively steady.8
Data as of 1/24/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 1.7% | 3.7% | 25.3% | 11.4% | 13.1% | 11.5% |
| Dow Jones Global ex-U.S. Index | 2.6 | 2.9 | 8.1 | 0.4 | 2.2 | 2.7 |
| 10-year Treasury Note (yield only) | 4.6 | N/A | 4.2 | 1.7 | 1.7 | 1.8 |
| Gold (per ounce) | 2.3 | 6.4 | 37.2 | 14.9 | 12.2 | 8.0 |
| Bloomberg Commodity Index | -0.3 | 4.7 | 5.0 | -0.4 | 6.0 | 0.3 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
PLANNING FOR REQUIRED MINIMUM DISTRIBUTIONS. If you save for retirement in a qualified plan, such as a 401(k) plan or an IRA, the government currently requires you to take withdrawals from these accounts during retirement. The withdrawals, known as required minimum distributions or RMDs, are taxable so it’s a good idea to plan ahead and avoid unexpected tax consequences.
Here is some basic information about RMDs. It is offered with the caveat that RMDs have complex rules. It’s important to talk with your financial or tax professional before taking action.
If your 73rd birthday is in 2025, your first RMD must be taken by April 1, 2026. Your second RMD by December 31, 2026, your third RMD by December 31, 2027, and so on.9
If you delay your first distribution until April 1, 2026, then you will need to take two RMDs in the same year.9
If you have multiple 401(k) plan and IRA accounts, you typically must calculate the RMD for each one of them. You can, however, withdraw the entire amount from a single account.10
If you’re still working at age 73, you don’t have to take an RMD from your workplace retirement plan account (as long as the plan allows it). This exception does not apply to traditional IRAs. You must take RMDs from traditional IRAs, even if you’re still working.10
If you inherit an IRA from a spouse (after 2019)who already reached age 73, you will normally need to take an RMD for the year of death, if your spouse did not already take one. If your spouse dies before age 73, you may be able to keep the inherited account, roll it over into your IRA, or withdraw the money in a lump sum or over a period of time.11
If you inherit an IRA from someone other than your spouse (after 2019), usually the funds must be completely withdrawn from the account within 10 years. RMDs may be required if the person from whom you inherited the account was already taking RMDs.12 There are some exceptions.
If you miss an RMD deadline or you don’t withdraw the full amount, penalties are steep. The penalty tax is 25 percent of the amount you failed to withdraw. If you correct the issue within two years, the penalty tax is lower.10
If you own a Roth IRA or Designated Roth account in workplace plan, you do not have to take RMDs—unless you inherited the account. In that case, RMD rules usually apply.10
Again, the rules governing RMDs are complex, and calculating RMDs is not always straightforward. If you would like help, or you have questions, please get in touch.
Weekly Focus – Think About It
“Never wear anything that panics the cat.”13—P.J. O’Rourke, comedian
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
[1] https://www.amazon.com/Security-Analysis-Classic-Benjamin-Graham/dp/0070244960 [Page 23] (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-27-25_Security%20Analysis%20Cover_1.pdf)
3 https://www.bloomberg.com/news/articles/2024-12-27/record-year-for-momentum-trade-is-ending-with-widening-cracks (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-27-25_Bloomberg_Record%20Year%20for%20Momentum%20Trade%20is%20Ending_3.pdf)
4 https://www.bloomberg.com/news/newsletters/2025-01-24/s-p-500-set-for-best-first-week-for-any-president-since-reagan?srnd=phx-economics-v2 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-27-25_Bloomberg_S&P%20500%20Set%20for%20Best%20First%20Week_4.pdf)
5 https://www.schwab.com/learn/story/investing-basics-fundamental-analysis [transcript]
6 https://www.barrons.com/market-data (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-27-25_Barrons_Data_6.pdf)
7 https://www.barrons.com/articles/stock-market-big-tech-federal-reserve-13376c0b?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-27-25_Barrons_The%20Stock%20Market%20is%20At%20Mercy%20of%20Tech%20and%20Fed_7.pdf)
10 https://www.irs.gov/retirement-plans/rmd-comparison-chart-iras-vs-defined-contribution-plans
11 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
12 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary [1]3https://www.brainyquote.com/profession/quotes-by-comedians
The Markets
As the markets turn.
Last week, investors breathed a sigh of relief when the latest price data showed core inflation, which excludes volatile food and energy prices, moved lower in December.1
Investors has been worried because economists forecasted inflation would be stickier in December, reported Frank Lee of Morningstar.2 If that proved out, the Fed might have stopped lowering the federal funds rate, which would have had adverse implications for company performance and stock prices. So when core inflation dropped to 3.2 percent year over year, investors celebrated.1
Some think the celebration might be premature.
Jacob Sonenshine of Barron’s reported, “Stocks jumped after this week’s inflation data. The problem is that there’s not a lot to love in the numbers. The reality is that inflation remains well above the Federal Reserve’s 2 [percent] goal. The average headline [Consumer Price Index] has been 2.7 [percent] in the past three months, above the 2.6 [percent] average for the three months that ended in September. So the trend of inflation, when considering a larger sample size of results, is inching higher, not lower…The result is that the Fed is unlikely to reduce interest rates aggressively. The federal-funds futures market now expects just one interest-rate cut this year…”3
Inflation wasn’t the only reason investor optimism surged last week, though. Fourth quarter earnings season—the time when management lets investors know how the companies performed in the prior quarter—got off to a strong start. “Big Banks set a positive note earlier this week, while [a large semiconductor company] sparked further enthusiasm among chip stocks. Things will only heat up in the weeks ahead, as Wall Street sizes up results from the market’s heaviest hitters,” reported Connor Smith of Barron’s.4
We should all be prepared for markets to be volatile this year.
While last week delivered attractive gains overall, the week before stock and bond markets moved in the opposite direction. Jurrien Timmer of Fidelity explained why we may see significant volatility this year:
“While I continue to believe we are in a bull market—with rising earnings poised to pull the weight of the market still higher—this recent volatility could be a sign of things to come. Later stages of a bull market tend to be more volatile. And it doesn’t take as much to disrupt the market’s mojo when valuations like price-earnings (PE) ratios are high, as they have been. But moreover, I believe the interest-rate angst that’s been weighing on the market isn’t likely to go away anytime soon, and could be a recurring feature of the year ahead.”5
Last week, major U.S. stock indices rose sharply,6 and yields on longer maturities ofU.S. Treasuries fell.7
Data as of 1/17/25 | 1-Week | YTD | 1-Year | 3-Year | 5-Year | 10-Year |
| Standard & Poor’s 500 Index | 2.9% | 2.0% | 26.5% | 9.4% | 12.5% | 11.5% |
| Dow Jones Global ex-U.S. Index | 1.7 | 0.3 | 7.8 | -1.6 | 1.5 | 2.6 |
| 10-year Treasury Note (yield only) | 4.6 | N/A | 4.1 | 1.9 | 1.8 | 1.8 |
| Gold (per ounce) | 1.0 | 4.0 | 35.0 | 14.3 | 11.8 | 7.9 |
| Bloomberg Commodity Index | 1.2 | 5.0 | 7.3 | -0.1 | 5.4 | 0.2 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
THE COSTLIEST NATURAL DISASTERS IN U.S. HISTORY. The Los Angeles wildfires were still burning when this was written, and it’s not yet possible to understand the full economic impact of the event. Last week, AccuWeather “increased its preliminary estimate of the total damage and economic loss to between $250 billion and $275 billion,” reported Monica Danielle.8 A week earlier, the estimate had been $52 billion to $57 billion.9
If the new forecast holds up, it puts the wildfires at or near the top of the list of costliest natural disasters in the United States. Not including the wildfires, six of the top 10 events have happened over the past decade. Here are the top 10, as listed in AARP.org using data from the National Oceanic and Atmospheric Administration (NOAA). (All dollar figures were adjusted for inflation.)10
- Hurricane Katrina, 2005, Louisiana, Mississippi, and Alabama: $201.3 billion
- Hurricane Harvey, 2017, Texas: $160.0 billion
- Hurricane Ian, 2022, Florida: $160.0 billion
- Hurricane Maria, 2017, Puerto Rico, St. Croix, and U.S. Virgin Islands: $115.2 billion
- Superstorm Sandy, 2012, New Jersey, New York, and other states: $ 88.5 billion
- Hurricane Ida, 2021, Louisiana and other states: $ 84.6 billion
- Hurricane Helene, 2024, Florida, western North Carolina: $ 78.7 billion
- Hurricane Irma, 2017, Florida, South Carolina, and U.S. Virgin Islands: $ 64.0 billion
- Hurricane Andrew, 1992, Florida: $ 60.5 billion
- United States drought/heat waves, 1988-1990, 11 U.S. states: $ 54.6 billion
In 2024, there were 27 weather and climate events that inflicted damage of $1 billion or more. Since 1980, there have been 403 events of that magnitude, with a total price tag of more than $2.9 trillion, reported NOAA.11
Weekly Focus – Think About It
“[Jimmy Carter] had the courage and strength to stick to his principles even when they were politically unpopular…Fifty years ago, he was a climate warrior who pushed for a world where we conserved energy, limited emissions, and traded our reliance on fossil fuels for expanded renewable sources. By the way, he cut the deficit, wanted to decriminalize marijuana, deregulated so many industries that he gave us cheap flights and, as you heard, craft beer. Basically, all of those years ago, he was the first millennial. And he could make great playlists…”12
—Jason Carter, grandson of former U.S. President Jimmy Carter
* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED), https://fred.stlouisfed.org/series/GOLDPMGBD228NLBM.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
Sources:
[1] https://www.bls.gov/news.release/pdf/cpi.pdf
2 https://www.morningstar.com/economy/december-cpi-forecasts-predict-stalled-progress-inflation
3 https://www.barrons.com/articles/stock-market-inflation-rally-5a458448?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-20-25_Barrons_Why%20the%20Stock%20Market%20is%20Getting%20Ahead%20of%20Itself_3.pdf)
4 https://www.barrons.com/livecoverage/stock-market-today-011725?mod=hp_LEDE_C_1 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-20-25_Barrons_Dow%20S&P%20Mark%20Best%20Weeks%20Since%20Nov_4.pdf)
5 https://www.fidelity.com/learning-center/trading-investing/rocky-start
6 https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/01-20-25_Barrons_Data_6.pdf)
[1]0 https://www.aarp.org/politics-society/history/info-2021/costliest-natural-disasters.html
[1]1 https://www.ncei.noaa.gov/access/billions/
[1]2 https://www.pbs.org/newshour/politics/notable-quotes-from-jimmy-carters-funeral