Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package.
The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor’s 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.1,2,3
A Record Week for Stocks
After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.
A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges.4
A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes.5
The Start of Holiday Shopping
The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year’s levels.6
However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October.7
Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year’s levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.8
This Week: Key Economic Data
Wednesday: Gross Domestic Product (GDP), Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Consumer Price Index (CPI), Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, December 4, 2020
This Week: Companies Reporting Earnings
Monday: Coupa Software (COUP)
Tuesday: Autozone (AZO), Mongodb, Inc. (MDB), Chewy, Inc. (CHWY)
Wednesday: Campbell Soup Company (CPB), Slack Technologies (WORK)
Thursday: Lululemon Athletica, Inc. (LULU), Adobe, Inc. (ADBE), Broadcom (AVGO), Costco Wholesale Corp. (COST)
Source: Zacks, December 4, 2020
“It is wonderful what we can do if we are always doing.”
– George Washington
Paying Employment Taxes? Make Sure You’re Using the Correct Form
If you’re a small business owner, you should understand the differences between two commonly used employment tax returns.
Form 944, Employer’s Annual Federal Tax Return, is designed for small business owners to pay employment taxes once a year instead of quarterly. Business owners may receive a notice from the IRS informing them that they can file Form 944. Business owners may have to file this form every year until the IRS notifies them differently.
Form 941, Employer’s Quarterly Federal Tax Return, is a form designed for employers to report income taxes, Social Security, or Medicare tax withheld from employee’s paychecks. Again, the IRS may inform business owners of whether they should use Form 941.
If you have questions about which form you should use, please contact our office. We may be able to provide some guidance or help you find some information on the IRS website.
* 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 IRS9
Have a Healthier Holiday
The holidays are known for rich meals and lots of sweet goodies. But, that doesn’t mean that you can’t stay healthy! Here are some tips to help you have a healthier holiday, while still enjoying this special time of year:
Tip adapted from Mayo Clinic10
I have keys that will open no locks. I have a space and a lock that’s a key. You can enter but you can’t leave, and yet - you can escape. What am I?
Last week’s riddle: You heard me before, yet you hear me once more. Then I die 'til you call me again. What am I? Answer: An echo.
Sunset at Lake Tahoe, California.
Footnotes and Sources
2. The Wall Street Journal, December 4, 2020
3. The Wall Street Journal, December 4, 2020
4. The Wall Street Journal, December 3, 2020
5. CNBC, December 4, 2020
6. CNBC, November 30, 2020
7. CNBC, November 30, 2020
8. CNBC, December 1, 2020
9. IRS.gov, December 17, 2019
10. Newsnetwork.mayoclinic.org, December 4, 2020
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Weekly Market Insights: Is Stimulus Near?
December 08, 2020|