Top Story
Stocks waver to close out the week as strong jobs report may impact the Fedās thinking
• US stocks were mixed Friday as a hotter-than-expected November jobs report gave investors pause. As the labor market holds strong, it suggests the Fed is justified in maintaining a hawkish stance toward inflation. This is the last major jobs report before the central bankās coming December rate hike decision, so the data put pressure on equities.
• The Labor Department reported the economy added 263,000 jobs last month, while the unemployment rate held at 3.7%. Broadly stated, demand for labor is outpacing the number of available workers. That also puts upward pressure on wages, a key aspect of inflation.
• The European Union voted to place a $60 per barrel price cap on Russian oil. Officials in Moscow have cautioned that such a step will push energy and oil prices further. Both international benchmark Brent crude and US standard West Texas Intermediate saw their price per barrel rise.
What to be on the lookout for today
• The ISM services index will be released for November. This monthly survey of non-manufacturing firms fell to 54.4 in October from 56.7 in September. That indicated the slowest growth within the sector since May 2020.
• Biotechnology firm Veru (VERU) will publish its fourth-quarter results for fiscal 2022, as well as for the year as a whole. In November, the companyās COVID-19 drug lost a split decision in front of an FDA advisory committee.
Tax loss harvesting, or selling off underperforming stocks and then taking a tax credit for the loss, can be a helpful part of a tax-efficient investing strategy.
Tax loss harvesting is the strategy of purposely selling some investments at a loss to offset the taxable profits from another investment. Itās a way to delay paying taxes, not to eliminate paying them at all.
Using short-term losses to offset short-term gains is a good way to take advantage of tax loss harvesting ā because short-term gains are taxed at higher rates. IRS rules also dictate that short-term or long-term losses must be used to offset gains of the same type, unless the losses exceed the gains from the same type.
Investors can also apply losses from investments of as much as $3,000 to offset income. And because tax losses donāt expire, if only a portion of losses was used to offset income in one year, the investor can āsaveā those losses to offset taxes in another year.
In order to carry out a tax-loss harvesting strategy, investors must adhere to specific IRS rules and restrictions. Hereās what you need to know.
Todayās top stories
Did you know that Campbellās Soup (CPB) typically does better during recessions? Its earnings report on Wednesday could be a sign of whether or not the US is truly facing a recession. On top of that, investors can look forward to reports on total consumer credit, unemployment claims, and the US trade deficit. All coming up, this week on Wall Street. Read more >> Everybody knows that inflation has made all of our holiday purchases more expensive this year ā but are you aware which gifts and menu items have risen most significantly? In order to try and mitigate inflationās impact, know the data. Also, learn how to be ācard smart.ā Read more >> With mortgages so expensive, Americans are once again committing to renting. But that isnāt stopping them from updating their living spaces. Even though there is no financial return, many Americans are investing in renovating their rentals. Hereās why this could actually be a great idea. Read more >> The Federal Reserve raised the fed funds rate by 75 basis points for the fourth time, and hinted that they may need to be raised higher than previously expected. Despite upbeat inflation data and rising employment, home sales are still dropping and corporate earnings expectations are on a downward slope. Read more >>Not-So-Breaking News
-
Elon Musk launched the initial deliveries of electric Semi trucks produced by Tesla (TSLA). The design for the truck was first released back in 2017, but the production was delayed due to COVID-19 and battery cell supply issues.
-
Cracker Barrel (CBRL) reported earnings that fell below analyst expectations and lowered its outlook for the rest of the year. The restaurant and country store chain blamed cost inflation that outpaced menu price increases.
-
Genesco (GCO) reported earnings that beat expectations. However, the Johnston & Murphy owner also lowered its expectations for the rest of the year, citing continued cost pressure and increased promotional activity across the industry.
-
Technology and semiconductor firm Marvell (MRVL) reported third quarter earnings that fell below expectations while dropping its full-year guidance. CEO Matt Murphy attributed the lower guidance to āinventory reductionsā.
-
Toyota (TM) received millions in funding to develop its Hilux pickup in the UK. This hydrogen-powered car will be developed at a plant in England.
Financial planner tip of the day
āOne strategy to approaching home additions is to create your dream list, then have alternate choices in mind if your budget, material availability, or other external factors create a need to alter the project down the road. For example, you may love the look of marble flooring, but its price point might be higher than youād initially estimatedāor perhaps it doesnāt blend in with the rest of your house once youāve started laying out the plans. Having a back-up planāand one thatās cost-efficient at thatācould help keep your budget in check.ā
Brian Walsh, CFPĀ® at SoFi