Stock Market Today 9/25/20: Stocks Win the Session but Lose the Week on Growth Fears

All three major indexes closed a choppy week of trading with gains on Friday, but the Dow Jones Industrial Average and S&P 500 still logged a weekly loss for the fourth consecutive week.

SEE MORE 13 Best Warren Buffett Growth Stocks

Friday's session was defined, in part, by more mixed economic data. Core capital orders increased by more than forecast, but growth in durable goods orders rose less than expected. Altogether the data did nothing to reassure a market that's concerned about a slowing recovery amid waning federal financial help for businesses and the unemployed.

"Risk assets remained stable following the economic releases as last month’s readings were revised upwards, but cyclical assets continue to experience bouts of selling due to the growing global economic worries," Gorilla Trades notes. 

Against that backdrop, tech stocks once again took center stage as investors scramble for growth in a recessionary environment, with Microsoft (MSFT), Apple (AAPL) and (CRM) being among the Dow's top gainers. For the record, the blue-chip average rose 359 points, or 1.3%, to finish at 27,174.

The usual anxieties surrounding the imminent end of fiscal stimulus, a mixed economic picture and rising COVID-19 cases will likely take center stage next week, as the corporate earnings calendar is pretty light. Highlights include a report from Micron Technology (MU) on Tuesday, and results from Pepsico (PEP) Thursday.

Other action in the market today:

The Nasdaq Composite gained 2.3% to close at 10,913.The S&P 500 added 1.6% to finish at 3,298. The small-cap Russell 2000 closed up 1.6% at 1,474. Boeing (BA) shares rose 6.9% on news that the European regulatory ban on the 737 MAX jet could be lifted in November.  Keep an Open Mind About Under-the-Radar Tech Stocks

At the risk of sounding like a broken record, tech stocks have been a safe haven in an otherwise tough market and look poised for more outperformance ahead.

Indeed, tech is one of the few sectors expected to report revenue growth for the third quarter. When inve

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Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check

Seniors and veterans otherwise eligible for a stimulus check who receive Social Security retirement benefits, Supplemental Security Income (SSI), Railroad Retirement (RR) benefits, or Veterans Affairs (VA) compensation and pension benefits have until September 30, 2020, to claim an additional $500-per-child payment if they didn't already receive the amount as part of their original stimulus check.

SEE MORE Trump Promises $200 Prescription Drug Card for Seniors

Americans who receive these federal benefits, but didn't file a 2018 or 2019 tax return, should have automatically received a $1,200 stimulus payment earlier this year. However, if they have (or care for) dependent children 16 years old or younger, they were instructed to go online and use the IRS's "Non-Filers: Enter Your Payment Info Here" tool to get the extra $500 per child that's allowed under the CARES Act.

The catch was that they originally had to use the tool by a certain time and with little notice. People receiving Social Security, SSI, or RR benefits initially had until noon Eastern time on April 22 to have the additional amount included in their stimulus check payment – and the IRS gave them less than 48 hours' notice of the deadline! Veterans receiving VA benefits had until May 5 to use the IRS's online tool. Unfortunately, many seniors and veterans with dependent children didn't act in time and didn't get the extra $500.

The Revised Deadline

In August, the IRS reopened the registration period for Social Security, SSI, RR, and VA beneficiaries who didn't receive the additional $500 payment for a dependent child. They now have until September 30 to use the Non-Filers tool to provide information about their child. If you miss the September 30 deadline, you'll need to wait until next year and claim the $500 as a credit on your 2020 federal income tax return.

The IRS says the extra $500 payments will be issued in October. If you received your original $1,200 payment by direct deposit, the additional payment for your dependent children will also be directly deposited to the same account. Otherwise, you'll receive a paper check in the mail.

SEE MORE The 10 Least Tax-Friendly States for Military Retirees


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Trump Promises $200 Prescription Drug Card for Seniors

As part of his America First Healthcare Plan, President Trump announced that "33 million Medicare beneficiaries will soon receive a card in the mail containing $200 that they can use to help pay for prescription drugs." The cards are expected to be mailed in the "coming weeks."

SEE MORE Medicare Basics: 11 Things You Need to Know

The cards will be partially paid for with savings from the Trump administration's policy that Medicare shouldn't pay more for prescription drugs than the "most-favored-nation price," which is generally the lowest price that a pharmaceutical company charges for drugs sold in other developed countries.

The administration has not released additional information about the prescription drug cards at this point. However, we will provide additional details when they become available.

America First Health Care Plan

The prescription drug card was reportedly a last-minute addition to the president's overall America First Health Care Plan. Among other things, the plan lays out the Trump administration's desire to:

Continue health insurance coverage for pre-existing conditions;End "surprise billing" for medical costs that patients had no meaningful ability to plan for in advance; Dedicate significant resources for COVID-19 therapeutics and vaccines, as well as for treatments for other serious illnesses and conditions; Provide access to health coverage tailored to individual needs; Establish transparent pricing for medical procedures and drug prices; Lower prescription drug costs; Improve access to innovative arrangements like direct primary care; Enhance patient control over medical records; Expand telehealth options; and Cut Medicare waste, fraud and abuse. SEE MORE When Elder Care Requires Legal Advice

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With Estate Taxes on Sale Now, You Snooze, You Lose!

As you know, the Trump tax cuts (2017 Tax Cuts and Jobs Act) created unprecedented opportunities for individuals and families to transfer their legacies in a tax-efficient manner. These cuts doubled the estate, gift and generation-skipping transfer tax exemption amounts from previous levels.

While the federal estate and gift tax exemption amount is currently $11.58 million per person (indexed for inflation), the increased exemptions are scheduled to remain in place only until Dec. 31, 2025, after which they are set to decrease to $5 million per person, indexed for inflation.

SEE MORE 5 Unfortunate Estate Planning Myths You Probably Believe

However, depending upon the outcome of the upcoming November 2020 election, the elevated exemption levels may be cut much sooner. This would mean that these once-in-a-lifetime wealth-transfer planning opportunities may soon disappear.  For this reason, it is more crucial than ever for you and your family to consider utilizing your elevated gift tax exemption before year’s end. 

Why Some Folks Have Put Off Their Gifting Assets

Because taking advantage of the elevated gift tax exemption amount generally requires transferring, or “gifting” assets out of one’s taxable estate, there is a practical reluctance to do so. This is due to concerns about not having sufficient income to live on for the remainder of one’s lifetime.

Some may be especially hesitant to gift income-producing property, such as real estate investments or businesses entities that hold real estate, because they feel they may need the income at some point in the future, such as for retirement or a “rainy day.”

Enter the Idea of Transferring Fractional Interest

Thus, the notion of gifting interests in non-income-producing real property, such as a primary or secondary residence, may be especially appealing to such individuals, since these types of gifts do not have as much of an impact on their sense of financial security.  Moreover, transferring only a partial, or “fractional” interest in the residence can provide individuals with an additional degree of economic comfort, because the transferor could continue to own a portion of the property.

With such a plan, property owners could create a trust and gift 50% of the home to

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Keep Politics Out of Your Investing Decisions!

These days, following an election can feel like watching the same slasher film every day for six months straight. But how should our political leanings impact our investing decisions? Specifically, should you sell before, during or after the election? While some might say that depends on who wins, I would take a different approach.

Two Clients Who Immediately Come to Mind

I remember receiving a call the morning after President Trump won in 2016 from a client who wanted to sell out of the market because he was sure President Trump would run stocks into the ground. After some conversation we agreed to look the other way on politics for a while and focus instead on his investing strategy, keeping the two parts of his life divided and keeping his assets in the market. Looking back, he would have kicked himself if he’d allowed his political views to leave him out of an amazing runup in equities following President Trump’s election: After the “Trump rally,” market performance during Trump’s term showed strong annualized returns of 11.1% per year, with data through Aug. 3, 2020.

SEE MORE 5 All-Too-Common Financial ‘Sins’ … and How to Atone for Them

On the other side of the aisle, I recall a client who was an avid supporter for President Trump and spent time standing by the roadside holding a Trump sign up for passing traffic (he was a pretty committed supporter). This client insisted on getting out of the market completely before the election because he believed Hillary Clinton would win and that the markets would be negatively impacted. In this case, the client missed the aforementioned equities runup completely, but for totally different emotional reasons than the first client. Not only was he frustrated that he called the election wrong (even though his preferred candidate won), he was upset about missing out on what ended up being amazing investing results.

During former President Obama’s years in office, numerous folks I came in contact with sat entirely on the sidelines as investors. They were convinced that Obama would lay waste to the stock market and we’d be left in a pile of ashes. On the contrary, Obama’s term saw some of the most impressive stock market returns of any president in history, with cumulative returns of 181.1% and annualized returns of 13.8%.<

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