Northern Star Newsletter 07/17/2017
Our summer cookout was a hit once again! We had beautiful weather to accompany us throughout the day! Friends and family joined in the festivities and got to use plenty of the poolside activities.
Sorry if you could not make it, we had a blast!
Congratulations to Lisa Hatke for the longest Drive! That hole, we used every one of her shots in the best ball round.
Congratulations to David Norcross for the closest to the pin! If you saw the others try their best, you know he why he was the winner!
Now on to planning the winter gala happening in November. The theme will be “A White Christmas,” and I cannot wait!
Till we speak again, enjoy your week!
Special Quarterly Update:
Q2 Coming into Focus
WEEKLY UPDATE - JULY 17, 2017
Last Friday, stocks closed on more record highs. The S&P 500 rose 1.41% and the Dow climbed 1.04% - both closing at new peaks. The NASDAQ reported a 2.58% gain and the MSCI EAFE posted a 2.38% increase. Despite continuing headlines from Washington, the markets remain productive and strong. New Q2 numbers also rolled in last week, giving us a clearer picture of what happened from April through June.
Over the second quarter, the S&P 500 rose 2.57%, the Dow gained 3.32%, and the NASDAQ jumped 3.87%. Meanwhile, the MSCI EAFE improved by 5.0%. Analysts are now predicting that Q2 Gross Domestic Product (GDP) will grow to 2.4% - stronger than Q1's soft 1.4% increase.
While we wait for more numbers and reports, here are some highlights so far:
- Corporate Earnings: Corporate Earnings should remain strong for Q2, with an expected S&P 500 earnings growth of 6.5%. As of July 14, only 6% of S&P 500 companies have reported earnings.
- Core Consumer Pricing: Core Consumer Pricing, which measures the price of consumer goods excluding food and energy, remained at 60-year historically low levels. June's numbers increased by only 0.1% - the third month in a row for low rates.
- Retail Sales: Retail sales were soft, declining unexpectedly by 0.2% following May's 0.1% drop and April's 0.3% rise.
- Labor Market: Employers hired at a record increase of 8.3% in May, filling 5.5 million jobs. Consequently, job openings fell in May to 5.66 million from April's strong 6.0 million. The strong labor market further reflected in June's low unemployment rate of 4.4%.
On the international front, global economic growth is set to post a predicted 3.0% increase for Q2. Emerging and advanced economies both should record positive results based on strong global trade growth and favorable economic indicators. Both China and Japan are expected to post strong economic growth.
News from Last Week and Looking Ahead
For Q3 and Q4, the economy should continue to produce strong job data and decent housing markets - along with growing investments in businesses. For the year, the economy is expected to expand at an estimated 2.2% in 2017.With that said, consumer sentiment fell to 93.1 in July - much lower than expected. Because consumer spending makes up more than two-thirds of the economy, the markets will continue to follow consumer attitudes and spending. Given current global economic trends, some analysts expect the global economy to grow by 3.0% for 2017.
Finally, Fed Chair Janet Yellen testified before Congress last week. She confirmed that the Fed's reduction in its $4.5 trillion balance sheet - known as "tapering" - will start later this year. She also suggested that interest rate hikes might continue for a couple of more years. With inflation hovering at 1.4%, however, the Fed may be losing confidence in reaching its targeted goal of an annual 2% increase. Meanwhile, The Bank of Canada has followed the Fed's lead by raising its interest rates 25 basis points to 0.75% - its first raise since 2010.
As always, we are here to help you navigate the often complex economic environment. Contact us if you have any questions about how this information may impact your financial life.
Monday: Empire State Manufacturing Survey
Tuesday: Import and Export Prices, Housing Market Index
Wednesday: Housing Starts
Thursday: Jobless Claims, Philadelphia Fed Business Survey Outlook, Fed Balance Sheet
Reporting Income from Vacation Property*
Taxpayers who own summer rental properties have specific responsibilities when reporting income. They also have certain expenses they may deduct from their tax returns. Here are some tips for reporting income from rental properties.
Report Income and Expenses
If you rent your home, you may have to file multiple forms.
- Schedule E: File Schedule E with your tax return when you report rental income.
- Net Investment Income Tax: Determine whether your claims fall under the Net Investment Income Tax liability.
- Schedule A: File Schedule A to report deductible expenses for personal use on the rental property.
When to File
If you rent your dwelling for fewer than 15 days a year, you do not need to claim the income on your tax return. For rentals that exceed this timeframe, you need to report all income and expenses to the IRS.
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov
Use Words and Rhythm to Drop the Ball in the Cup
Sometimes, golfers just can't find the right rhythm when putting. Without smooth rhythm, jerky and abrupt movements affect the putter face's orientation at impact, and ultimately, the ball's speed. When the putt is longer, the challenges compound and require extra effort to drop the ball in the hole.
Fortunately, you can fix your putt by practicing your swing to the rhythm of three syllables: "perfect pace."
- Take putter back: As you swing back, say the word per-fect in your mind, and align your swing to its two-syllable rhythm.
- Swing putter through: When you swing forward, think the word pace in your mind. Align your swing to its one-syllable rhythm.
No matter if you're practicing a short or long stroke, this exercise will help your swing support the right rhythm to drop your ball in the cup. Always remember: Focus on the process, not the outcome.
Tip courtesy of GolfDigest
Improve Your Sleep Quality
As people age, sleeping soundly can become more challenging, and interrupted sleep can be common. Waking up multiple times a night may be the result of physical discomforts, such as needing to use the bathroom or having joint pain. Fortunately, you can take some steps to help you enjoy a better night's sleep. Here are ways to improve your sleep quality, so you can slumber soundly all night.
- Review your medications with your doctor: Sometimes, medications can affect our sleeping habits. If you are taking prescription drugs, you may want to talk with your doctor about any side effects that may affect your sleep patterns.
- Limit drinking fluids before bedtime: Going to bed with a full bladder is a recipe for disrupted sleep. You can help avoid midnight bathroom trips by not drinking anything at least 2 hours before bedtime.
- Shorten daytime napping: We can control our sleep cycles by better managing how long we nap during the day. Aim for naps that are 10 - 15 minutes, and stop napping altogether if you find they keep you alert in the later evening.
Tip courtesy of MayoClinic
Cloth or Paper Towels?
For those who want to choose the best eco-friendly towel for the cleaning job, a common conundrum is whether to use cloth or paper towels. Well, the answer isn't cut and dry. While you can reuse cloth towels rather than throw each one away, cleaning them does require energy consumption (electricity, water, etc.). In addition, if you don't properly store them, they can harbor bacteria. Meanwhile, paper towels require cutting down trees. Because they are disposable, the United States wastes 3,000 tons of paper towels each year.
Support your green living with a hybrid cleaning approach that also uses recycled paper towels.
When to Use Cloth Towels
- Wiping dry clean dishes
- Cleaning up spilled water
- Clearing crumbs and dust from counters and shelves
- Drying washed hands
When to Use Recycled Paper Towels
- Cleaning up spilled messes that could spread germs or disease, such as raw eggs (salmonella)
- Soaking up cooking greases from foods, such as bacon
- Wiping surfaces that could carry germs, such as diaper-changing stations
- Cleaning items that could be toxic, such as used paintbrushes
Tip courtesy of Care2.com
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
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 https://insight.factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/ EarningsInsight_070717.pdf
 https://www.bloomberg.com/news/articles/2017-07-12/yellen-s-take-on-inflation-shifts-subtly-in-remarks-to-congress?cmpid=BBD071217_BIZ&utm_medium=email&utm_source=newsletter&utm_term=170712&utm_campaign =bloombergdaily