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The Caldwell Trust Company Blog

Market Preview Week of 10/30/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Friday's session propels equity indices higher for the week
  • Bond yields rise marginally once again
  • Better than expected initial reading on Q3 GDP
  • Next week busy with earnings, tax reform news flow, and Fed chair appointment

All the weekly gains for the S&P 500 and the NASDAQ Composite index (and then some) occurred Friday of last week. The Dow Jones Industrial average also ended the week marginally higher. Extremely strong earnings releases from Amazon, Alphabet (Google), and Microsoft drove technology shares higher. The Technology sector was up 2.75% for the week. In aggregate, earnings releases were good last week though there were a few stumbles in the Health Care sector.

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Topics: Market Preview

Market Preview Week of 10/23/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Q3 earnings meeting expectations
  • To date earnings being driven primarily by cost reductions
  • Equity markets advance; bond yields back up
  • Earnings should again dominate news flow next week

Last week saw plenty of earnings releases by S&P 500 companies which for the most part were positive. The big disappointment was General Electric’s earnings miss. The stock was off for the week and the new CEO alluded to a potential dividend cut as part of a company-wide restructuring.  In aggregate, 17% of the S&P 500 have reported earnings and the number of companies beating consensus earnings estimates is running in the mid 70% range which is slightly above the historic norm. The earnings beats appear to be driven more by cost reductions as top line revenue growth is coming in mediocre at best (two good examples are top line growth at the banks and Procter & Gamble’s results). That said, the vast majority of firms have yet to report.

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Topics: Market Preview

It's Official -- the 2018 401(k) Contribution Limit Is Increasing

Posted by Tony Blasini, CPC, QPA

For the 2018 tax year, the IRS has increased the employee 401(k) contribution limit to $18,500 to keep up with the rising cost of living. This means savers who want to max out their retirement savings have the ability to contribute an additional $500 to their 401(k) account, which also translates to a greater tax break.

Here are the details about 401(k) contribution limits in 2018, and what it could mean for you.

The 2018 401(k) Contribution Limit

As I mentioned, the 401(k) contribution limit in 2018 is increasing by $500 over the 2017 limit to $18,500. This limit also applies to other qualified retirement plan types, such as 403(b) plans, most 457 plans, and Thrift Savings Plan accounts.

It's important to keep in mind that this is the limit for employee elective deferrals. This is the money you choose to have withheld from your paycheck. It does not include any non-elective contributions or matching contributions made by your employer.

In addition, there is a catch-up contribution allowed for participants who are age 50 or older, and this remains unchanged, at $6,000 for 2018. So, the maximum elective deferral any employee can choose to make for 2018 is $24,500.

The overall limit for 401(k) contributions, which includes money from all sources, including your employer's matching contributions, is rising by $1,000 to $55,000.

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Topics: In the News

{INFOGRAPHIC} Evaluate Your Company's 401(k)

Posted by Tony Blasini, CPC, QPA

As a business owner, it's important that you know whether your business 401(k) plan is working for you or against you. We've created this simple outline to assist you in evalutating whether or not your current business 401(k) plan is doing what it should.  

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Market Preview Week of 10/16/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Money center bank kick off Q3 earnings season
  • Bank earnings generally in line with expectations
  • Domestic markets slightly higher on for the week
  • Pace of earnings reports pick up next week

The four largest money center banks kicked off Q3 earnings season reporting Thursday and Friday of last week. Citigroup and J.P. Morgan reported Thursday. While both beat consensus earnings estimates the quality of Citi’s earnings continue to be poor relative to peers. They reported marginal revenue growth and poor operating efficiencies. J.P. Morgan put in solid earnings driven by strong lending and asset management business. Friday, Bank of America and Wells Fargo reported. While Bank of America exceeded consensus earnings estimates Wells Fargo missed. Wells Fargo was hurt by mortgage lending and legal costs. Bank of America reported margin expansion and strong lending results. Of the four issues J.P. Morgan and Bank of America, in our view, have the most upside potential. Two other institutions on our Buy List also reported this week, BlackRock and PNC Financial Services (which owns a 20%+ stake in BlackRock). Both companies reported strong earnings.

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Topics: Market Preview

6 Misconceptions About Retirement Best Practices

Posted by Tony Blasini, CPC, QPA

When it comes to retirement planning, many people in the workforce don’t really think about it. They put money into the 401k provided by their employer and focus on their financial needs in the moment. Unfortunately, this lack of true planning leads to a lot of misconceptions about retirement best practices. Here are seven assumptions you may be making about retirement, along with the reality you need to be aware of.

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Topics: Retirement Plan Services, Trusts & Estate Planning

Market Preview Week of 10/9/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity markets up strongly last week
  • Economic releases largely positve for the week
  • Large money center banks report Q3 earnings next week
  • 10-year Treasury yeilds rise slightly; trading in the 2.35% range

All three major domestic equity indices were up once again, in a relatively big way, notching gains over 1% for the week. The broad market as measured by the S&P 500 is now up over 15% for the year. Apart from the Energy and Telecommunication sectors equities were up strongly across the board. Domestic markets continue to hit new highs quietly with historically low volatility.

Economic releases last week – ISM Manufacturer’s Index, Durable Goods orders, and Jobless Claims – were all positive; the Payrolls report released Friday was disappointing but largely viewed as temporal due to the effects of September hurricanes. As noted here previously, two things lacking in the current recovery has been strong economic growth and inflation. The numbers reported last week argue for a pick-up in growth. Next week will provide insight into the current inflation picture with the release of both the Consumer Price Index (CPI) and the Producer Price Index (PPI).

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Topics: Market Preview

Market Preview Week of 10/1/17 - Investor Sentiment

Posted by Chris McGee, CFA CAIA

  • Equity markets advance solidly in Q3
  • All major global equity markets positive YTD in 2017
  • Broad domestic bond results solidly positive QTD and YTD
  • Tax reform proposed and outlined by adminsitration

Without exception major world equity markets have turned in positive returns through the third quarter of this year. The vast majority of returns are double digit. YTD in the U.S. the total return on the S&P 500 is 14.24%; NASDAQ 20.67%, and the Dow 13.37%. Growth stocks continue to overwhelmingly outperform value stocks. Domestically, bond returns are positive YTD with the broad market advancing 3.14% and High Yield bonds returning 7%. Enjoy it.

In the U.S., the Technology and Health Care sectors have turned in the best performances YTD (26.02% and 18.75% respectively). Energy and Telecom sectors have generated the worst returns, returning -8.62% and -8.07% respectively. That said, Energy stocks reversed in the third quarter and were the second best performing sector (behind Technology) gaining 6.03%. To a lesser extent Telecom issues reversed course and put in robust performance.

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Topics: Market Preview

 


 

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