A&G Financial Management Market Recap October 28, 2017
One day after traders cheered the early results from 3rd quarter earnings, Mr. Market had a change of heart. On Wednesday the S&P 500 Index was down the most in seven weeks, when weak results from companies Chipotle Mexican Grill to Advanced Micro Devices sent a chill across the markets. Don't get too caught up in all the earnings hype. A 3 month period of time doesn't give a complete picture of a companies health.
Despite internal divisions among Republicans, there is a strong likelihood of a tax package passing in 2018. President Trump met with Senate Republicans. Just like sausage making, the legislative process is never pretty. But we continue to believe that tax reform is where Republicans are likely to find common ground, and failure would be the most damaging.
The GOP reportedly had been considering reducing the cap on the annual amount workers can set aside for 401(k)s. Current 401(k) plans allow contributions that are tax-deductible up to $18,000 a year. Rumors were that hey want to slash that to $2,400. President Trump said there will not be changes to tax-deferred retirement savings plans under his proposed tax plan, shooting down reports that House Republicans were considering it. Rep. Kevin Brady, the point person in Congress on tax reform, appeared to contradict the president, telling attendees at an event that discussions on what may or may not happen are still underway. While the president emphasized “no change to your 401k,” Brady countered “in tax reform, we can create incentives for Americans to save more and save sooner. We are exploring a number of ideas in those areas.” A day earlier, the Internal Revenue Service announced contribution limits for employees who participate in 401k, 403b, most 457 plans, as well as the federal government’s Thrift Savings Plan, will increase from its current $18,000 to $18,500 in 2018, barring any cuts as part of a potential tax reform deal.
U.S. Weekly Jobless Claims Rise To 233,000. After reporting first-time claims for U.S. unemployment benefits at their lowest level in over forty years in the previous week, the Labor Department released a report on Thursday showing a modest rebound in initial jobless claims in the week ended October 21st. The report said initial jobless claims rose to 233,000, an increase of 10,000 from the previous week's revised level of 223,000. Economists had expected jobless claims to edge up to 235,000 from the 222,000 originally reported for the previous week.