The crosscurrents of strong corporate earnings, rising global cases of COVID-19, and the specter of higher capital gains taxes led to a choppy week of trading that left stock prices slightly lower for the week.
The Dow Jones Industrial Average lost 0.46%, while the Standard & Poor’s 500 slipped 0.13%. The Nasdaq Composite index fell 0.25% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.47%.1,2,3
A Directionless Week
Despite continued better-than-expected corporate earnings, stocks retreated as concerns over rising global COVID-19 infections weighed on investor sentiment. A mid-week rally erased much of these losses, with reopening stocks and small cap companies leading the market.
The stock market resumed its decline in reaction to reports that President Biden supported a capital gains tax increase on wealthy Americans. The Biden news prompted worries that stocks could come under pressure this year if such an increase were to go into effect next year.
Solid economic reports, along with a reassessment of the capital gains news, helped stocks to bounce back and close out the week on a positive note.
Housing Shows Strength
Two housing market reports last week reflected strong consumer demand for homes.
Sales of new homes in March jumped by 20.7% from February and by more than 66% from last March, reaching levels not seen since 2006. All regions recorded double-digit gains, except for the West, which experienced a decline of 30%.4
Though existing home sales fell 3.7%, it wasn’t for lack of consumer interest, as evidenced by the 18-day average to sell a home. The decline was largely an issue of tight inventories. This demand/supply imbalance drove median home prices higher by 17.2% from March 2020 to $329,100.5
This Week: Key Economic Data
Monday: Durable Goods Orders.
Tuesday: Consumer Confidence.
Wednesday: Federal Open Market Committee (FOMC) Announcement.
Thursday: Jobless Claims. Gross Domestic Product (GDP).
Source: Econoday, April 23, 2021
This Week: Companies Reporting Earnings
Monday: Tesla, Inc. (TSLA).
Tuesday: Microsoft (MSFT), Advanced Micro Devices, Inc. (AMD), Visa (V), Alphabet, Inc. (GOOGL), Starbucks (SBUX), Amgen, Inc. (AMGN), Eli Lilly and Company (LLY), 3M Company (MMM), Texas Instruments (TXN), United Parcel Service (UPS), Mondelez International (MDLZ).
Wednesday: Apple, Inc. (AAPL), Facebook (FB), Boeing (BA), Ford Motor Company (F), Qualcomm (QCOM), Shopify, Inc. (SHOP), Servicenow, Inc. (NOW), Teladoc Health, Inc. (TDOC), Ebay (EBAY).
Thursday: Amazon.com (AMZN), Twitter, Inc. (TWTR), Mastercard (MA), Bristol Myers Squibb (BMY), Caterpillar, Inc. (CAT), Merck & Company (MRK), McDonald's Corporation (MCD), Comcast Corporation (CMCSA), American Tower Corporation (AMT).
Friday: Abbvie, Inc (ABBV), Chevron (CVX), Charter Communications (CHTR).
Source: Zacks, April 23, 2021
Do You Need to Report Cash Payments?
If you receive a cash payment that is more than $10,000, you may be required to report it to the IRS. In this case, a cash payment includes US or foreign currency and can also include cashier's checks, bank drafts, traveler's checks, or money orders.
In addition, cash payments to an individual can also include payments from companies, corporations, partnerships, associations, trusts, or estates. For example, this could include:
This requirement refers to cash payments that are received as one lump sum, in two or more payments within 24 hours, as a single transaction within 12 months, or as part of two or more transactions within 12 months.
So how do you report cash payments? Taxpayers should fill out Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. You can file this form electronically or mail a physical copy to the IRS. You must submit Form 8300 within 15 days after receiving the cash payment.
* 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.gov6
A certain month can begin on a Friday and end on a Friday as well. What month is it?
Last week’s riddle: What number is 4 more than the number that is double one-fifth of one-tenth of 900? Answer: 40 (900 / 10 = 90 / 5 = 18 x 2 = 36 + 4 = 40).
Footnotes and Sources
2. The Wall Street Journal, April 23, 2021
3. The Wall Street Journal, April 23, 2021
4. Yahoo! News, April 23, 2021
5. CNBC, April 22, 2021
6. IRS.gov, 2021
7. Healthline.com, July 8, 2019
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Weekly Market Insights: Mixed Signals, Choppy Week
April 27, 2021