Stocks ended the week mixed as investors appeared to shrug off a hotter-than-expected inflation report.
The Dow Jones Industrial Average slipped 0.80%, while the Standard & Poor’s 500 advanced 0.41%. The Nasdaq Composite index led, tacking on 1.85%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.31%.1,2,3
Another Quiet Week
The market traded in a narrow range for much of last week as investors anxiously awaited the release of the Consumer Price Index (CPI) on Thursday.
May’s CPI saw an increase in inflation that exceeded most expectations. Paradoxically, markets advanced on the news, sending the S&P 500 to a new record close and the technology-heavy NASDAQ Composite higher. Perhaps equally unexpected was the decline in the 10-year Treasury yield, which slipped to 1.45%, touching its lowest level in three months.4
On Friday, stocks were unable to materially build on the previous day’s advance, though the S&P 500 managed to add onto its record Thursday close.
Consumer prices headed higher in May, rising 0.6% from April and by 5.0% from a year ago. It was the largest jump in the CPI since August 2008. Core inflation, which excludes food and energy prices, rose 3.8% — the sharpest increase in nearly three decades.5
Automobile prices were one of the primary contributors to May’s number. Used car and truck prices jumped 7.3% month-over-month and by 29.7% from a year ago. New cars experienced their highest monthly increase since October 2009 as a result of an inventory shortage stemming from tightness in the semiconductor supply.6
This Week: Key Economic Data
Tuesday: Retail Sales. Industrial Production.
Wednesday: FOMC (Federal Open Market Committee) Announcement.
Thursday: Index of Leading Economic Indicators. Jobless Claims.
Source: Econoday, June 11, 2021
This Week: Companies Reporting Earnings
Tuesday: Oracle Corporation (ORCL).
Thursday: The Kroger Co. (KR).
Source: Zacks, June 11, 2021
Tax Tips for Children or Grandchildren with Part-Time Summer Jobs
As summer approaches, many of us have kids or grandkids who are coming home for the summer and working part-time. Whether they're bussing tables, counseling summer camp, or mowing lawns, these tips will help them (and you) understand the tax implications of summer jobs:
Summer jobs are a great way to learn about responsibility and taxes, as well as earn a little extra income before returning to the school year.
* 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.gov7
Footnotes and Sources
2. The Wall Street Journal, June 11, 2021
3. The Wall Street Journal, June 11, 2021
4. The Wall Street Journal, June 11, 2021
5. CNBC, June 10, 2021
6. CNBC, June 10, 2021
7. IRS.gov, June 28, 2019
8. Ideas.ted.com, Oct 26, 2020
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