Stock prices fluctuated amid inflation concerns and bargain hunting, leaving stocks mixed for the week.
The Dow Jones Industrial Average slipped 0.51%, while the Standard & Poor’s 500 dropped 0.43%. The tech-heavy Nasdaq Composite index advanced 0.31%. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.67%.1,2,3
Lots of Motion, Little Movement
Stocks began last week extending their losses from the previous week, as the slide in technology and other high-growth stocks resumed. Inflation worries also weighed on the market.
After steep declines in early Wednesday trading, market sentiment took a more positive turn, allowing stocks to pare their losses as the session came to a close, despite news that the Fed could be contemplating tapering its monthly bond purchases.4
This positive momentum continued into Thursday, aided by a declining initial jobless claims number and a strong rebound in technology. The rebound lost steam into Friday’s close, leaving stocks little changed for the week.5
The Fed Hints at a Turn
The Federal Open Market Committee (FOMC) on Wednesday released the minutes of its April meeting. The report suggested that a number of committee participants had raised the idea that—if the economy continues to make progress—it might be appropriate to adjust the pace of the Fed’s monthly bond purchase program.4
With inflation appearing to accelerate, the markets have been watchful for signs that the Fed would begin tightening its easy-money policies. This is the first time since the pandemic that the Fed has suggested that a scaling back of bond purchases could happen, though no timetable was discussed.
It’s important to note that the April Fed meeting took place prior to the release of April’s Consumer Price Index, which showed a higher-than-expected increase of 4.2%.6
This Week: Key Economic Data
Tuesday: New Home Sales. Consumer Confidence.
Thursday: Jobless Claims. Durable Goods Orders. Gross Domestic Product (GDP).
Source: Econoday, May 21, 2021
This Week: Companies Reporting Earnings
Tuesday: Autozone, Inc. (AZO), Intuit, Inc. (INTU).
Wednesday: Nvidia Corporation (NVDA), Okta, Inc. (OKTA), Workday, Inc. (WDAY), Dollar General (DG), Snowflake, Inc. (SNOW).
Thursday: Salesforce.com (CRM), Costco Wholesale Corp. (COST), Best Buy (BBY), Dell Technologies (DELL).
Source: Zacks, May 21, 2021
Employee vs Independent Contractor: Classifying Those Who Work for You Appropriately
Classifying workers as independent contractors or employees is important for several tax reasons. The classification comes down to two main considerations: control and relationship.
Control refers to how much of the person's work you control. This includes what work is done and how it's done, as well as if you control the financial aspects of the person's job. In this way, "control" means both behavioral and financial control.
Another important factor is the relationship between the employer and the worker. How both parties perceive this relationship can help you determine worker status. Some factors that influence relationship include:
Knowing how to classify your workers is important because independent contractors and employees face different tax needs and implications.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS7
I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?
Last week’s riddle: A girl has as many brothers as sisters, but each brother has only half as many brothers as sisters. How many brothers and sisters are there in the family? Answer: The family has four sisters and three brothers.
Footnotes and Sources
2. The Wall Street Journal, May 21, 2021
3. The Wall Street Journal, May 21, 2021
4. CNBC, May 19, 2021
5. FoxBusiness.com, May 20, 2021
6. CNBC, May 19, 2021
7. IRS.gov, July 8, 2019
8. Healthline.com, February 27, 2020
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