Friday,
February 16, 2024
Market recap
Dow Jones
38,773.12
+348.85 (+0.91%)
S&P 500
5,029.73
+29.11 (+0.58%)
Nasdaq
15,906.17
+47.03 (+0.30%)
Top Story
Tooth Fairy inflation is real and it’s here
Parents are digging deeper into their pockets to reward things from lost teeth to potty training.
The S&P 500 closed at a record high Thursday in spite of a sharp decline in retail sales
• January retail sales unexpectedly fell 0.8%, a potentially worrying sign for the strong consumer spending that has been buoying the U.S. economy.
• In earnings, oil company Occidental Petroleum beat expectations and reported its best quarterly output in three years, sending its shares 4.9% higher. Shake Shack shares surged 26% after beating analyst expectations by turning a profit in the fourth quarter and reporting a 20% increase in sales. Crocs reported record annual profit and revenues, and strong guidance, which pushed its stock 12.2% higher.
• Lyft shares rallied another 16.1%, adding onto a 35% gain on Wednesday after reporting record ride growth in the fourth quarter.
• Tesla stock rose 6.2%, accelerating for a second-straight day.
• Others didn’t fare quite so well: Cisco stock also fell 2.4% after lowering its full-year outlook and announcing plans to cut roughly 5% of its workforce. Stainless steel drinkware maker Yeti saw its shares plummet 13.8% after missing estimates and forecasting weaker 2024 earnings. Wendy’s stock slid 1.5% after missing expectations and reporting a soft outlook for 2024. Shares of cloud-based communications platform Twilio tumbled 15.4% on a lower-than-expected revenue forecast for the current quarter. Finally, equipment maker Deere & Company beat expectations but issued fiscal 2024 guidance below estimates, sending its stock 5.2% lower.
• Home builder sentiment rose to its highest level since August, according to the NAHB housing market index. In other economic news, initial jobless claims declined, and the New York Empire State Manufacturing Index reached its highest level since November. It still signaled the third straight month of contraction in overall business activity.
What to be on the lookout for today
• Another inflation measure with the producer price index. Also housing starts for January due, as well as February’s University of Michigan consumer sentiment.
• In earnings, food processing giant Archer-Daniels-Midland will report.
Paying taxes on your investments
Made some money off your investments last year? That’s great. But Uncle Sam is going to want a cut.
Investment income can be taxed in different ways, so here’s a quick refresher on taxes investors could face.
Capital Gains Tax: If you sold assets (stocks, for instance) for more than the purchase price, the profit is called a capital gain. There are two types of capital gains: short-term and long-term.
Short-term capital gains are profits from selling assets held for less than a year. These are commonly taxed at your ordinary income tax rates. Long-term capital gains apply to assets held for (you guessed it) more than a year. These are typically taxed at capital gains tax rate.
Tax on Dividends: If you own stocks and received a dividend from a company, you’ll likely have to pay taxes on it. There are two types of dividends: “qualified’ and “ordinary”, and they are taxed differently.
Ordinary dividends are taxed as income, while qualified dividends are taxed at the capital gains rate.
Taxable Interest Income: If you earned interest, whether in a savings or brokerage account, or on certificates of deposit (CDs) or bonds, that’s typically taxed as ordinary income.
Today’s top stories
Forgotten communities are benefitting from billion dollar investments Boosted by federal legislation, private investments in certain sectors are skyrocketing, and economically distressed counties are receiving a big share of the cash. Here’s what that means, and why it matters. Read more >> Are you a freelancer? Here are tax deductions you should know about Taxes for the self-employed can get complex but there are some tax deductions — including your home office, supplies, or your phone and internet service — you won’t want to miss. Read more >>Other news that caught our eye
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Target launched a new store brand called “dealworthy” for low-priced everyday essentials.
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Google is partnering with the Environmental Defense Fund to identify sources of climate-warming emissions from oil and gas operations via satellite.
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Delta Airlines paid out $1.4 billion in profit sharing to employees below the mid-level manager tier, more than double last year’s payments.
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Japan lost its spot as the third-largest economy in the world to Germany after weak domestic consumption pushed the country into recession.
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After a Delaware judge struck down Elon Musk’s Tesla compensation package, SpaceX filed to incorporate in Texas.
Financial planner tip of the day
“Not all investment types generate the same type of taxation. When deploying a tax-efficient investment strategy, it’s crucial to know how an investment is going to be taxed.”
Brian Walsh, CFP® at SoFi