New Jersey Gov. Chris Christie ended the longstanding reciprocal tax agreement between New Jersey and Pennsylvania. The agreement had exempted employees that live in New Jersey and Pennsylvania but worked on the opposite side of the Delaware River from being taxed in the state where they worked.
If Christie does not reverse his decision to terminate the pact, many commuters may face larger overall state and local tax liabilities beginning January 1, 2017. No taxpayers living in either state will pay less tax as a result of this change.
If you are an affected taxpayer, please contact us for more details on how this action will change your state income tax.
Most of the time, the U.S. stock market looks to 3 factors (call them the “pillars” which support the stock market) to support its upward trend – let’s grade each of the pillars.
CONSUMER SPENDING: This grade is A- (very favorable). Favorable activity in the housing market continues to support growth in the level of spending.
THE FED AND ITS POLICIES: This factor is rated A (very favorable). Last week’s FED meeting means the Fed probably will remain on a long and slow path to hiking rates.
BUSINESS PROFITABILITY: This factor’s grade is increased to aB-(above average). The market’s valuation prices in an improvement in second-half earnings and an impressive rise in 2017 EPS for the S&P 500.
OTHER CONCERNS: The “Heat Map” is indicating the U.S. stock market is in OK shape ASSUMING no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 4. These risks deserve our ongoing attention.
Last week, US Stocks and Bonds advanced. Foreign Stocks declined. During the last 12 months, STOCKS outperformed BONDS.
Returns through 9-30-2016
1-week
Y-T-D
1-Year
3-Years
5-Years
10-Years
Bonds- BarCap Aggregate Index
.1
5.8
5.2
4.0
3.1
4.8
US Stocks-Standard & Poor’s 500
.2
7.8
15.4
11.1
16.4
7.2
Foreign Stocks- MS EAFE Developed Countries
-.7
1.7
6.5
.5
7.4
1.8
Source: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends.
The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®, AEP®. This week Laurie will discuss:
“Roth IRAs, converted ROTH IRAs and ROTH 401ks – understand the differences and your options.
Laurie will take your calls on these topics and other inquiries this week. Questions may be submitted early through www.yourfinancialchoices.com by clicking Contact Laurie. This show will be broadcast at the regular time. WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton and Phillipsburg area– or listen to it online from anywhere on the internet. For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com and visit www.wdiy.org.
U.S. stocks finished an up-and-down week on a positive note, helped by a strong showing from energy stocks and an easing of concerns about the viability of Deutsche Bank, Germany’s largest bank.
The bank’s Frankfurt-listed stock closed Friday at 11.57 euros, up 6.4% on the day. It was also a sign the market is less worried, at least for now, about the bank’s stability than it was earlier in the week, after reports put Deutsche Bank in settlement talks involving billions of dollars concerning a mortgage-security probe by the U.S. Justice Department. Financial companies in the Standard & Poor’s 500 index responded positively, gaining 1.43% on Friday.
The S&P 500 finished the week, having gained 0.80% during Friday’s session to close at 2,168.27. That is about 22 points off its all-time high of 2,190 set on Aug. 15.
Still, “we are on pins and needles,” says Chris Hyzy, chief investment officer at Bank of America’s global wealth and investment-management division. With the third quarter in the books, “we know that October holds more risks,” he adds. He cites the uncertainty of the upcoming presidential election, the possibility of a rate hike in the U.S. late in the year, and concerns about Deutsche Bank’s financial strength as key worries that investors are trying to assess. Yet Hyzy remains upbeat about U.S. stocks, convinced that the third-quarter earnings season will be solid.
Even though it was a so-so week for stocks, there were some nice gains, especially in energy. The Dow Jones Industrial Average gained 0.26%, lifted by an increase of nearly 1% on Friday. One of its constituents, ExxonMobil (XOM), was the second-best performer in the Dow, with a gain of nearly 5% last week. Chevron (CVX) rose about 4%.
The two stocks got a nice boost from rising oil prices. The price of West Texas Intermediate crude finished at more than $48 a barrel, up about 8% on the week. Undergirding the increases was last week’s surprising news that the Organization of Petroleum Exporting Countries had agreed to cut production, a move that should help support oil prices if the deal is actually carried out.
