Stocks edged lower for the week ending May 20 on mixed economic data. The Leading Economic Index (LEI) fell 0.3% in April, its first monthly decline since June 2010. Economists expected a flat reading for the month. However, March was revised up to 0.7% from 0.4%. Negative initial jobless claims data led the causes for the decline.
Initial jobless claims fell 29,000 to 409,000 for the week. However, the four-week moving average increased by 1,250 to 439,000. In the April 1, 2011 Pinnacle Trust Weekly Market Update, it was noted that we had seen six out of the last eight weeks below 400,000. Typically we see the economy creating more jobs when the weekly initial jobless claims number remains below 400,000. This spike in jobless claims supports the case for a choppy recovery in jobs and indicates that the rate of economic expansion remains slow. Continue reading
U.S. equity markets drifted slightly lower for the week ending May 13. The DJIA declined 0.3%, while the S&P 500 fell 0.2%. The NASDAQ kept its head above water with a gain of less than one point (0.0%). International markets did not fare as well. The MSCI EAFE Index lost 1.3% and the MSCI Emerging Markets Index slid 1.6%.
Inflation data remained the focus of a lot of attention last week. According to the U.S. Department of Labor, the Consumer Price Index (CPI) increased 0.422% in April. This is the tenth straight month of gains. On a year over year basis, headline CPI is up 3.2%, the most since October 2008. Headline inflation includes volatile food and energy prices. Core CPI, which excludes food and energy prices, has risen 1.3% year over year, the most since February 2010. This is on the low end of the Federal Reserve’s projection range for 2011. Continue reading
Last week marked the anniversary of 2010’s “Flash Crash.” To celebrate, we had a rout in the commodity markets. Silver fell more than 20%, gold plunged below $1500 an ounce, and oil dropped more than $10 per barrel in one day, falling below $100. In the midst of the commodity craziness, a friend at a mutual fund company text messaged me, “Commodities take the stairs up and the elevator down!” He is right, and last week demonstrates how much speculation currently resides in the commodity markets. Commodities, as an asset class, add diversification to a well balanced portfolio, but investors must be wary if they choose to speculate on individual commodity prices. Remember when oil fell from $147 per barrel to below $35 during the last bear market? Continue reading
We’ve been blogging about the landmark study, USA Inc., a look at the US economy as if it were a corporation. Last week we looked at the historical net worth statement for USA Inc. Today, we introduce the authors’ drilldown summary into their findings. An 18 page summary of this 445 page report can be downloaded at the bottom of this post.
Stocks marched to multi-year highs on the heels of solid earnings reports and the Federal Reserve’s first-ever press conference to make its regular announcement. Despite positive earnings reports from several major technology companies, the NASDAQ lagged the DJIA and S&P 500, gaining 1.89% for the week. The DJIA increased 2.44%, while the S&P 500 climbed 1.96%. Continue reading
IR-2011-39, April 7, 2011
WASHINGTON –– Hiding income in offshore accounts, identity theft, return preparer fraud, and filing false or misleading tax forms top the annual list of “dirty dozen” tax scams in 2011, the Internal Revenue Service announced today.
“The Dirty Dozen represents the worst of the worst tax scams,” IRS Commissioner Doug Shulman said. “Don’t fall prey to these tax scams. They may look tempting, but these fraudulent deals end up hurting people who participate in them.”
The IRS works with the Justice Department to pursue and shut down perpetrators of these and other illegal scams. Promoters frequently end up facing heavy fines and imprisonment. Meanwhile, taxpayers who wittingly or unwittingly get involved with these schemes must repay all taxes due plus interest and penalties.
Click here to read the full list.