Your Local Resource for Expert Financial Guidance and Support

Weekly Economic Update: August 14, 2023

Positive inflation data failed to lift stocks from their August doldrums last week as economic data and a ratings downgrade soured investor sentiment.

The Dow Jones Industrial Average added 0.62%, while the Standard & Poor’s 500 slipped 0.31%. The Nasdaq Composite index fell 1.90% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.50%.

Tech Weighs on Stocks 
Stocks struggled last week, beginning on a strong note ahead of key inflation data and selling off mid-week in response to a downgrade of the banking sector by credit rating agency Moody’s and news of a steep drop in China’s exports. Emblematic of the week, stocks jumped to big gains following Thursday’s better-than-expected inflation report, only to evaporate as bond yields rose amid an auction of 30-year Treasury bonds.

Stocks have had difficulty sustaining traction with the loss of the technology’s leadership, which has propelled gains this year. The combination of higher yields and earnings that failed to validate tech's elevated valuations has dragged the sector and the larger market.

Subdued Inflation 
July’s inflation data reflected only moderate price pressures. Consumer prices increased by a modest 0.2%, which aligned with market expectations. In comparison, the annual inflation rate came in at 3.2%, slightly below consensus estimates–though higher than June’s annual increase of 3.0%. Core CPI (excludes food and energy) was particularly encouraging, rising at the slowest rate since...

How We Can Help Build Your Financial Confidence

Here at Capstone we often assist our clients with the behavioral and emotional components of managing money. It's important to recognize what drives your financial decisions, so you can create a healthier attitude that leads to better money habits.

We can help you reach your financial goals by guiding you through money management skills like building savings, budgeting, or paying down debt. Not only can we support you on the road to building financial confidence, unlike a financial coach, we are certified to provide investment advice and manage your investments. As a Capstone client, all of this is built in to our service fees. You don't ever pay extra for coaching here at Capstone. And we will always cheer you on, free of charge!  Beyond investments, we often help clients with things like:

Social Security: Options, timing and strategy.

Tax strategies: While we are not CPA’s and can’t give tax advice, we sure can help you strategize.

Charitable Giving: Does a Qualified Charitable Contribution from your IRA make sense?
Affordable Education: Do you have kids or grandkids considering higher education options  and does a 529 or other vehicle make sense?

Call us today to see if we can dig deeper into the holistic financial planning approach, not just on your investments, but your overall financial health and goals.

Tax Tip: Is Child Support Considered Taxable Income?

Child support payments are not taxable income for the recipient or tax- deductible for the payer. Therefore, you should not include child support payments when calculating gross income for tax purposes.

On the other hand, alimony payments may be taxable income for the recipient and tax-deductible for the payer depending on the specific divorce or separation instrument. For divorce or separation instruments executed on or before December 31, 2018, alimony payments are generally taxable income for the recipient and tax-deductible for the payer. However, for divorce or separation instruments executed after December 31, 2018, or those executed before that date but later modified to repeal the deduction for alimony expressly, the payments are neither taxable income nor tax-deductible. In either case, when determining gross income for tax purposes, alimony payments received should be included or excluded based on the specific instrument.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.  Tip adapted from IRS.gov

Parting Shot

They always make us smile, but what’s the story behind all the Humpty Dumpty

sculptures around Colorado Springs?  Learn more via Colorado Jill…

Capstone built our reputation on friendly service, impeccable honesty, and respect for every client. Our clients’ needs drive our relationship, and the focus is always on you. We strive to be highly responsive to your requests and are skilled at creating solutions customized to your goals, values, and situation.  Reach out anytime with questions. We're happy to help!

Capstone Investment Financial Group, LLC

Colorado Springs/Denver

719-477-9883

info@capstoneinvest.com