The stock market posted small losses last week despite a very strong showing by corporate America.
The Dow Jones Industrial Average slipped 0.36%, while the Standard & Poor’s 500 lost 0.37%. The Nasdaq Composite index dropped 1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, jumped 1.51%.1,2,3
Stocks Take a Breather
There were plenty of excuses for stocks to retreat last week. News of a new phase in Chinese regulators’ crackdown on large, private-sector companies, a decline in new home sales, and concerns about the Delta variant weighed on investors.
After opening the week adding to record highs, stocks turned lower despite an earnings season that continued to impress.
Solid earnings from the mega-cap technology companies were not enough to propel stocks higher. Instead, stocks slipped throughout the week, fighting uncertainty over Chinese stocks, a disappointing second-quarter Gross Domestic Product number, and a retreat in technology shares they reset to fresh company guidance.
Chinese technology stocks were under pressure last week as Chinese regulators continued their push to rein in large companies for reasons that include data security, abusive corporate behavior, financial stability, and curtailing private-sector power.
Chinese government actions raised new levels of concerns about which industries may next fall in the crosshairs of regulators. American investors have plenty of exposure to Chinese companies. Substantial losses were felt by mutual funds and hedge funds, which account for about 86% of the holdings in the over 200 U.S.-listed Chinese companies whose aggregate market capitalization exceeds $2 trillion.4
This Week: Key Economic Data
Monday: ISM (Institute for Supply Management) Manufacturing Index.
Tuesday: Factory Orders.
Wednesday: ADP (Automated Data Processing) Employment Report. ISM (Institute for Supply Management) Services Index.
Thursday: Jobless Claims.
Friday: Employment Situation Report.
Source: Econoday, July 30, 2021
This Week: Companies Reporting Earnings
Monday: Simon Property Group, Inc. (SPG).
Tuesday: Alibaba Group Holdings (BABA), Activision Blizzard, Inc. (ATVI), Amgen, Inc. (AMGN), Eli Lilly & Company (LLY), Diageo, PLC (DEO).
Wednesday: Roku, Inc. (ROKU), Prudential Financial, Inc. (PRU), CVS Health Corporation (CVS), General Motors, Inc. (GM), Etsy, Inc. (ETSY), Electronic Arts, Inc. (EA), MGM Resorts International (MGM), Match Group, Inc. (MTCH), Emerson Electric Co. (EMR), Booking Holdings (BKNG).
Thursday: Square, Inc. (SQ), Illumina, Inc. (ILMN), Duke Energy Corporation (DUK), Albemarle Corporation (ALB), Cigna Corporation (CI), Becton, Dickinson and Company (BDX), Regeneron Pharmaceuticals, Inc. (REGN).
Friday: Dominion Energy (D).
Source: Zacks, July 30, 2021
How to Apply for Tax-Exempt Status for Organizations
If an organization wants to apply for tax-exempt status under Section 501(c)(3), they start by filling out a Form 1023-series application. They must submit a complete application, as well as the user fee. To complete the application, organizations also need their employer identification number. Generally, an organization that is required to apply for recognition of exemption must notify the IRS within 27 months from the date it was formed.
Some organizations, including churches or public charities whose annual gross receipts are normally less than $5,000, may not need to apply for 501(c)(3) status to be tax-exempt. When the IRS determines an organization qualifies for exemption under Section 501(c)(3), it will also be classified as a foundation, unless the organization meets the requirements to be treated as a public charity.
* 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 IRS.gov5
A coin lies inside an otherwise empty bottle that has a cork inserted in its neck. How can you remove this coin without removing the cork or breaking the bottle?
Last week’s riddle: When can you add two to eleven and get one as the correct answer? Answer: When you add two hours to eleven o'clock, you get one o'clock.
Footnotes and Sources
2. The Wall Street Journal, July 30, 2021
3. The Wall Street Journal, July 30, 2021
4. Yahoo Finance, January 7, 2021
5. IRS.gov, January 8, 2021
6. Health.harvard.edu, September 2019
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