Here are the key updates that can affect how people invest today:
1. Streaks Broken
The S&P 500 and Nasdaq Composite had their longest winning streaks end on Thursday. The S&P 500 went down by 0.8% after eight days of gains, and the Nasdaq Composite dropped by 0.9% after nine days of gains.
The Dow Jones Industrial Average also decreased, falling by almost 0.7%. For the week, the S&P 500 and the Dow are down by 0.3% and 0.5%, respectively, as we approach the last trading session. On the other hand, the Nasdaq is up by 0.3% for the week.
2. Not Confident
On Thursday, Federal Reserve Chairman Jerome Powell expressed uncertainty about whether the central bank has taken sufficient measures to control inflation. Powell mentioned that despite the Fed’s commitment to achieving a 2% inflation rate, they are “not confident that we have achieved such a stance.”
These remarks followed the Fed’s decision, just over a week ago, to keep interest rates unchanged within a target range of 5.25% to 5.5%. Powell acknowledged progress in consumer price measures but noted that achieving a sustained 2% inflation still has a considerable way to go.
3. New Thresholds
The IRS announced on Thursday that for the tax year 2024 (returns filed in 2025), income tax, brackets and standard deductions will be slightly higher. This adjustment is in response to ongoing inflation in the U.S. economy.
In 2024, individuals with taxable income above $609,350 and married couples earning $731,200 will face the highest tax rate of 37%. The standard deduction will also see an increase to $14,600 for individuals (compared to $13,850 for the 2023 tax year) and $29,200 for married couples (compared to $27,700).
4. Ceding His Seat
Senator Joe Manchin has decided not to seek reelection in 2024, opening the way for the GOP to potentially gain a majority in the upcoming Senate elections. Manchin, a conservative Democrat who has been critical of President Joe Biden’s policies, will be leaving a seat in the predominantly Republican state of West Virginia.
If speculation about Manchin entering the presidential campaign is accurate, this move could further strengthen Republicans’ chances in both the Senate and the presidential race. National Republican Senatorial Committee Chairman Steve Daines expressed confidence, stating, “We like our odds in West Virginia,” in response to Manchin’s announcement, indicating optimism about securing the seat and maintaining an advantage in the Senate.
5. Youthful Interest in Skincare
The youngest generation, Gen Alpha, born in 2010 and later, is showing an early interest in anti-aging efforts, as revealed by their holiday wish lists. According to a report, this interest in skincare is expected to drive end-of-year spending.
The trend is influenced by platforms like TikTok and other social media, where kids (with parental permission) come across toners, serums, and moisturizers promoted by “skinfluencers.” Contrary to concerns, experts suggest that establishing a skincare routine can have positive effects on young kids, especially if it includes sun protection in the morning.
Summary
Key developments impacting investments include the S&P 500 and Nasdaq ending their winning streaks, uncertainty about inflation control from the Federal Reserve, adjusted tax thresholds for 2024, Senator Joe Manchin not seeking reelection, and the youngest generation, Gen Alpha, showing an early interest in skincare and influencing end-of-year spending.
