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Northern Star Newsletter 04/24/2017

Northern Star Newsletter 04/24/2017
Message from Jon

This week the markets shot up on Monday and Tuesday on speculation of the French elections. Wednesday on the other hand was relatively quiet awaiting Trump's tax plan details. Depending if Wall Street feels those details are acceptable and the likelihood of them being passed and implemented will, I'm sure, dictate the forward movement of the markets in the coming days and weeks ahead.

Again, quite a bit of movement on geopolitical headlines and speculation which while it lasts, is nice but when the tides shift and they always do, we could go from warm to cold pretty quickly.

Will we speak again, enjoy the beginning to summer!


Stocks Gain. Questions Remain.


Domestic stocks posted losses on Friday, April 21, largely due to investor concerns about the French election.[1]

Despite these daily losses, U.S. indexes broke their two-week losing streak, with the S&P 500 adding 0.85%, the Dow gaining 0.46%, and the NASDAQ increasing 1.82%. International stocks in the MSCI EAFE grew by 0.18%.[2]

What Did We Learn Last Week?

The French Election Is Concerning Investors

Uncertainty surrounding France's presidential election contributed to investor caution last week.[3] After Sunday's ballot, National Front candidate Marine Le Pen will advance to the second round of voting on May 7, which decides the new president.[4] Le Pen has promised to remove France from the European Union if she wins, a choice that could affect markets and currencies.[5]

Quarterly Earnings Reports Are Mostly Strong

By Friday morning, 95 companies in the S&P 500 had reported their quarterly earnings; 77% of them beat earnings-per-share estimates.[6]

Existing Home Sales Jumped 4.4% in March

Sales of existing homes hit levels not seen since 2007, and median home prices are up 6.8% over a year ago.[7] Supply levels remain tight, and demand is high, as 48% of homes sold last month were on the market for less than a month.[8]

Housing Starts Declined 6.8% in March

While the headline number for housing starts may seem pretty disappointing, it largely reflects the results of a return to typical March weather after unseasonably mild weather boosted starts in January and February.[9] Overall, housing starts are up 9.2% over this time last year.[10]

The Consumer Price Index Missed Expectations

Declines in gas and other energy prices contributed to the U.S. Consumer Price Index (CPI) falling 0.3% in March - its first monthly decline in more than a year.[11]

Tax-Plan Information May Be on the Horizon

On April 20, Treasury Secretary Steve Mnuchin indicated that tax reform remains important. The next day, President Trump said a tax plan should be coming this week.[12]

Oil Prices Dropped

Crude oil prices fell below $50 a barrel after losing 2.15% on Friday.[13] Investors are showing concern about whether output decreases by OPEC can balance out against increasing U.S. production and prevent oversupply.[14]

What's Ahead

Moving into the last week of April, we will learn both first quarter GDP readings and gain further insight into consumer confidence and housing performance. On Friday, April 28, initial readings for first quarter GDP will help deepen our understanding of where the economy stands right now. Consensus estimates are at a soft 1.1% growth, even lower than last quarter's 2.1% increase.[15] After seeing this week's low CPI numbers, combined with retail and inventory data, Barclays decreased its GDP estimate to only 0.8%.[16]

Last week provided a variety of data and perspectives that are continuing to reveal themselves. As momentum from the French presidential outcomes and our own economic growth unfolds, we will watch these developments closely. Meanwhile, we encourage you to continue a long-term focus on your goals, and we are here to discuss any questions you may have along the way.


Tuesday: S&P CoreLogic Case-Shiller HPI, New Home Sales, Consumer Confidence
Wednesday: EIA Petroleum Status Report
Thursday: Durable Goods Orders, International Trade in Goods, Pending Home Sales Index
Friday: GDP, Employment Cost Index, Consumer Sentiment

Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5- year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

Details About Filing Your Taxes Late*

Sometimes, being able to file your taxes on time can just be plain impossible. Whatever reason may cause you to file late, you have obligations you need to address as a result of your delayed filing status. Here are some important tax items to keep in mind.

If you expect to receive a refund, will the IRS penalize you for filing late?

No. The IRS doesn't penalize taxpayers who expect to receive a refund.

What fees will you get if you file late?

Late filers may be stuck with two penalties:

  • Filing your taxes late: The minimum penalty for filing more than 60 days after the due date or extended due date is $205. You could receive a penalty of 5% of your unpaid taxes each month, and the maximum penalty is 25%. If you owe less than $205 in taxes, then you simply pay 100% of that tax./p>
  • Paying your taxes late: You also receive more fees when you pay your taxes late. Generally, this monthly fee is 0.5% of your unpaid taxes and can grow to become as high as 25% of the unpaid taxes.

You also accrue interest on these fees; the longer you wait, the more fees you may pay. Other filing details may apply, so be sure to check out further guidance 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 advisor.

Tip courtesy of IRS.gov[18]

Get Out of That Ugly Lie

We all have off-days where the ball just seems to land in the most difficult spots. If you're stuck in a spot where you can't address the ball in any normal way, you need to know how to creatively escape these bad breaks. The next time your ball lands next to a tree or bush, you can take specific steps with your stance and approach to help you save your shot.

1. Stand with your back facing the target

When doing so, hold the club in your right hand (opposite for lefties), and point the club face at your target. You should have your club arm out to the side. This stance gives you the motion and space you need for swinging and hinging the club.

2. Hinge the ball up and down by using your wrist

You'll want to pop your ball onto the fairway. With this stance and motion, you have the speed you need to advance the ball back to the position you need for a standard shot.

While this move may seem risky, it can help you get back on track without taking an unplayable lie penalty or missing the shot and not being able to advance the ball. Instead, you'll create an open path to the green for your next shot by making full contact with the ball and pitching it out to the clear.

Tip courtesy of Golf Tips Magazine[19]

Soothe Hand Pain From Arthritis

Living with arthritis can be a debilitating experience. When your cartilage wears away, you have no buffer left between your bones and your joints. If you have arthritic hands, you can experience swelling and inflammation that result in stiffness and pain, making moving and using your hands challenging. Here are a few tips to help you manage hand pain from arthritis.

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