Stocks posted solid gains for the week, buoyed by the release of Fed meeting minutes and upbeat earnings from mid-size and discount retailers.
The Dow Jones Industrial Average jumped 6.24%, while the Standard & Poor’s 500 advanced 6.58%. The Nasdaq Composite index gained 6.84% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.09%.1,2,3
A Good Week
The stock market staged a broad rally last week, ignited by the release of minutes from the May’s Federal Open Market Committee (FOMC) meeting. The meeting notes eased concerns that the Fed might pursue a more aggressive monetary tightening stance than the Street had anticipated.
Investor sentiment rose owing to solid earnings and encouraging guidance from several mid-size and discount retailers, which eased concerns about the health of the American consumer. A smaller rise in the personal consumption expenditures price index, the Fed’s preferred measure of inflation, triggered a strong rally on Friday. The powerful move ended seven straight weeks of stock losses.4
The minutes from May’s FOMC meeting were released last week. They confirmed the likelihood of at least two successive 50 basis point interest rate hikes. The minutes also indicated they might need to raise rates to a level that acts to restrict economic growth, something that Fed Chair Jerome Powell acknowledged might be a painful process.5
Not all Fed members are fully committed to the more aggressive rate hikes. Last week, Atlanta Fed president Raphael Bostic wrote that a pause in rate increases in September might be appropriate. He joined other members in suggesting that economic conditions may warrant reconsideration of additional rate hikes beyond those already signaled by Powell.6
This Week: Key Economic Data
Tuesday: Consumer Confidence.
Wednesday: Institute for Supply Management (ISM) Manufacturing Index. Jobs Openings and Labor Turnover Survey (JOLTS).
Thursday: Automated Data Processing (ADP) Employment Report. Jobless Claims. Factory Orders.
Friday: Employment Situation. Institute for Supply Management (ISM) Services Index.
Source: Econoday, May 27, 2022
This Week: Companies Reporting Earnings
Tuesday: Salesforce, Inc. (CRM), HP, Inc. (HPQ).
Wednesday: MongoDB, Inc. (MDB).
Thursday: Broadcom, Inc. (AVGO), Hormel Foods Corporation (HRL), DocuSign (DOCU), CrowdStrike (CRWD).
Source: Zacks, May 27, 2022
Are Medical and Dental Expenses Tax-Deductible?
If you file your taxes using itemized deductions, you may be able to deduct medical and dental expenses for yourself, your spouse, and your dependents. According to the IRS, you may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income.
Some types of medical care expenses that may be deductible include:
* 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, May 27, 2022
3. The Wall Street Journal, May 27, 2022
4. CNBC, May 27, 2022
5. The Wall Street Journal, May 25, 2022
6. The Wall Street Journal, May 25, 2022
7. IRS.gov, February 17, 2021
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