Stocks were mixed last week in choppy trading as investors battled the crosscurrents of good economic data and a troubling rise in COVID-19 infections globally. The Dow Jones Industrial Average slid 1.38%, while the Standard & Poor’s 500 added 0.32%. The Nasdaq Composite index gained 1.24% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 0.59%.1,2,3
A healthy retail sales report, falling jobless claims, positive earnings surprises, and strong manufacturing data lent support to stock prices, but investor sentiment was dampened by several concerns.
Chief among these worries are a resurgence of COVID-19 infections this winter and the impact inflation may have on consumer confidence and corporate profit margins. The uncertainty surrounding the renomination of Fed Chair Powell exacerbated this unease; a decision from President Biden may come soon. Technology and other high-growth companies led the market, while some of the reopening stocks, such as travel and energy, lagged.
Retail Sales Jump
October retail sales increased 1.7%, indicating that consumers may be more confident than recent surveys have suggested. Sales of electronics, appliances, and autos were particularly strong last month.4
The market cheered the report, interpreting the results as a sign that inflation has not discouraged Americans from buying the products and services they want or need. This retail sales number, however, may be overstated for two reasons. First, higher prices increase the level of sales even if consumer demand is flat. Second, spending may have been pulled forward by consumer worries over higher future prices and concerns that goods may not be available during the holiday shopping season.
Selling Your Car or Buying From a Private Seller? Here Are the Tax Tips You Should Know
The first is that if you’re selling your car for less than what you paid for it, you likely won’t need to pay any sales tax on the sale because the IRS considers selling a used car for less than what you paid a capital loss. However, if you’re selling your car for more than what you paid (like if it’s a classic car you’ve restored and it’s increased in value), you may need to pay sales tax.
* 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 CarGurus5
Footnotes and Sources
2. The Wall Street Journal, November 19, 2021
3. The Wall Street Journal, November 19, 2021
4. CNBC, November 16, 2021
5. cargurus.com, June 24, 2021
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Weekly Market Insights: Stocks Mixed on COVID-19, Powell
November 22, 2021