For the week of January 5, 2009
The markets shook off a lackluster consumer confidence reading and a disappointing manufacturing
report on Friday to post gains on the first trading day of 2009. Although trading last week was light due to
the holidays, the markets continued their pattern of reacting more mildly to negative economic news as
they have since reaching lows on Nov. 20. Analysts expect this week to be a better indicator of overall
market sentiment, according to the Associated Press. For the week, the Dow gained 6.13 percent to
close at 9,034.69. The S&P rose 6.84 percent to finish the week at 931.80, and the NASDAQ climbed
6.66 percent to end the week at 1,632.21.
Source: Morningstar.com. * Past performance is no guarantee of future results. Indexes are unmanaged and
cannot be invested into directly. Three and five-year returns are annualized. The S&P, excluding “1 Week”
returns, is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.
Oil Slide – The price of crude oil for February delivery fell to $39.03 a barrel on Tuesday, December 30,
2008. In July, the price of oil peaked above $147 a barrel, a difference of over $100 per barrel in just six
months. OPEC announced earlier in the month that it would cut production by 2.2 million barrels
beginning in January, a move meant to put a floor under rapidly declining crude prices.
Few Plan Cuts – In a survey of 3,259 human resources professionals conducted by Harris Interactive for
USA Today and CareerBuilder.com, 62 percent said they expect a stable payroll in the first quarter of
2009. Sixteen percent said they expect to add workers, while another 16 percent expect to cut
Jobless Claims Drop – The number of U.S. workers filing initial unemployment claims fell dramatically
for the week ended Dec. 27 to 492,000 from 586,000 the week prior. Economists had expected a much
smaller decline to 575,000.
Strong Mortgage Demand – The Mortgage Bankers Association (MBA) index of mortgage application
activity stood unchanged last week at 1,245.7, seasonally adjusted. That matches the five-year high set
the previous week. Fixed 30-year mortgage rates averaged 5.03 percent last week, down slightly from a
week earlier but significantly lower than the July peak of 6.59 percent. Lower rates have created a surge
in the MBA refinancing index, which rose 63 percent for the week, the highest level since July 2003.
WEEKLY FOCUS – Tax Adjustments for Inflation
Each year, the Internal Revenue Service must, by law,
adjust the dollar amounts for various tax provisions to
keep pace with inflation. More than three dozen tax
benefits have been updated for 2009 returns. Some
increased by $150 to $3,650 each for 2009.
- Personal and dependent exemptions have
taxpayers use rather than itemizing, has risen:
- The standard deduction, which two-thirds of
married filing jointly now $11,400, up $500;
singles and married filing separately now $5,700,
up $250; and heads of household now $8,350, up
- Tax-bracket thresholds for each filing status have increased. For married couples filing joint returns,
for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent
bracket is $67,900 compared to $65,100 for 2008.
- Annual gift exclusion has increased from $12,000 in 2008 to $13,000 in 2009.
- Participants in defined contribution plans can put away $49,000 this year, a $3,000 increase
Although the numbers are new, inflation changes are a routine update to the Internal Revenue Code.
Greater tax changes most likely will occur this year as a new Congress and a new president tackle the
nation’s economic downturn. Some of those changes may directly impact your long-term investment and
estate planning choices – such as the bill signed last month by President Bush that eliminates required
minimum distributions from qualified retirement accounts for those over age 70½.
Keeping abreast of tax law changes, along with the many other changes in the financial industry, can be
time consuming and confusing. We’ve always believed in the power of coordinated planning between
you, our office and your tax advisor, estate planning attorney and insurance professional. Having a team
of professionals working together gives you the knowledge and resources to make the important
financial decisions in your life.
The new year is a great time for an in-depth review of your financial picture. We can facilitate joint
meetings with you and any of your other professional advisors. Give our office a call to schedule a time
and provide the names of the professionals you’d like to attend. We’ll take care of the rest.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of
the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-
chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common
stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan
Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized
benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies
representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all
dividends. Written by Securities America. SAI# 291955
Copyright © 2010 The Money Alert.com. All rights reserved.
All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to
participate in any particular trading strategy. The Money Alert does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any
information prepared by any unaffiliated third party, whether linked to this web site or incorporated herein, and takes no responsibility. All such information is provided solely for
convenience purposes only. The Money Alert is not affiliated with any of the firms or entities listed unless specifically stated. The Money Alert does not provide investment, tax or legal
advice. Please consult the appropriate professional regarding your personal situation.