The Markets This Week

by Connor Darrell CFA, Assistant Vice President – Head of Investments
U.S. stocks posted another week of solid gains, and the S&P 500 now sits within 2% of its all-time high (previously established in September 2018). Much of the market’s gains appeared to be influenced by some better than expected economic data from the Chinese manufacturing sector, as well as a strong March U.S. jobs report which revealed a significant recovery from a disappointing February figure. Interestingly, what many might expect to be one of the more significant sources of uncertainty – the Brexit negotiations – have largely had little impact on markets so far in 2019. Having already extended the deadline for a deal, British Parliament still appears to be no closer to a resolution than it was a few weeks ago.

In the bond market, the reassuring economic data helped to restore the yield curve to a more traditional upward slope over the three-month to 10-year range. Yields in the middle range of the curve crept higher, but remain well below their highs.

Retirement Bill Passes in U.S. House of Representatives
In a rare (and perhaps surprising) display of bipartisanship, the Ways and Means committee of the U.S. House of Representatives voted in support of the SECURE Act, a bill which will provide some positive new changes for those currently in the process of saving for retirement. The bill seeks to provide enhancements to the available tax breaks for retirement savers, as well as increase the incentive for more people to participate in employer sponsored retirement plans such as 401(k)s. If eventually passed into law, the bill would repeal the maximum age for traditional IRA contributions (currently age 70 ½) and increase the age for required minimum distributions from 70 ½ to 72. Additionally, long-term part-time workers would be allowed to participate in 401(k) plans, and small employers would receive expanded tax credits for creating retirement savings plans for their employees.

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