The Week on Wall Street
Traders paid close attention to coronavirus developments and earnings last week while wondering how the former might eventually impact the latter. Concern over updated infection numbers moderated risk appetite.
FACT OF THE WEEK
The word bank comes from the Italian banca, meaning "bench" as merchants did the earliest banking transactions in the public marketplace at a table or bench. If a banker did not uphold trades or financial transactions, they became literally "bankrupt" or Italian term banca rotta - "broken bench."
A pair of crucial stock benchmarks posted similar weekly losses. In New York, the S&P 500 declined 1.25%; the MSCI EAFE index (of developed stock markets away from North America) lost 1.24%. The Dow Jones Industrial Average retreated 1.38% for the four-day trading week, the Nasdaq Composite, 1.59%.
Minutes from the Federal Reserve’s January Meeting
Last month, members of the Federal Open Market Committee felt the near-term outlook for the economy had improved slightly since the last Fed meeting in December. The minutes did note that the COVID-19 coronavirus outbreak “warranted close watching.”
Some analysts have wondered if the coronavirus threat heightens whether the Fed might cut short-term interest rates this year. The FOMC voted 11-0 in January to leave rates alone.
Fewer Home Sales, But More Building Permits
Sales of existing homes weakened 1.3% in January, according to a new National Association of Realtors report. On the new home front, the Census Bureau said that the rate of permits for new residential construction neared a 13-year high last month.
At Friday’s closing bell, gold was worth $1,646.60 on the New York Mercantile Exchange. Gold futures traded at a seven-year peak on Friday morning.
FINANCIAL STRATEGY OF THE WEEK
WHEN DOES YOUR CAR BECOME A COMMERCIAL VEHICLE?
For small business owners, the line between the personal and their business can be a bit hazy at times. Yet, when it comes to a vehicle used for personal and business-related reasons, it’s essential to know how your auto insurance policy defines what constitutes commercial use.
If you own a car and cover it under a personal auto insurance policy, an insurance company may not pay claims for any damages you incur if the insurance company deems it as a commercial vehicle.
Not being on the same page with your insurance carrier may result in financial losses, so it pays to ask yourself important questions about your vehicle’s use to select the right policy for your car.
The crucial distinction for determining if a personally owned car may need commercial auto insurance coverage is whether the vehicle is for any business-related purpose.
Defining Business-Related Purpose
Your auto may be defined as a commercial vehicle if you use it to:
- pick up or deliver any goods,
- provide a service for a fee,
- travel to a remote work location or between work locations, or
- visit client locations.
Additional conditions under a car deemed as a commercial vehicle include:
- the owner named on the vehicle title is a business,
- the vehicle is rented or leased by others,
- the car is equipped with a snowplow, has an altered suspension system or other equipment or modification, or
- is driven by you or your employees for both business and personal use consistently.
If you use your vehicle for business reasons only occasionally, it may be included under your policy, but you may need to indicate that on your application for auto insurance.
The wisest course of action is to describe how you expect to use your vehicle for personal and business purposes and let your insurance agent guide you to the most appropriate policy for your situation.
As always, please contact my office with any questions or financial concerns you may have.