The Week on Wall Street
Optimism over the economic reopening and renewed enthusiasm for technology and other high-growth companies powered the stock market higher last week.
The Dow Jones Industrial Average rose 0.94%, while the S&P 500 climbed 1.16%. The Nasdaq Composite index led, picking up 2.06%. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.46%.
FACT OF THE WEEK
On June 3, 1965, 120 miles above the Earth, Major Edward H. White II opens the hatch of the Gemini 4 and steps out of the capsule, becoming the first American astronaut to walk in space. Attached to the craft by a 25-foot tether and controlling his movements with a hand-held oxygen jet-propulsion gun, White remained outside the capsule for just over 20 minutes.
MARKET MINUTE
Solid Gains
Stocks rallied on renewed confidence in the economic recovery, lower inflation worries, and rising comfort with Fed officials talking about the potential for easing of its monthly bond purchases. Technology, communication services, and reopening stocks were among the market leaders.
Investor sentiment was buoyed late in the week by an encouraging jobless claims number and the unveiling of a Republican infrastructure proposal. A somewhat hotter-than-expected inflation indicator on Friday did nothing to dampen optimism as stocks added to their gains ahead of the three-day Memorial Day weekend.
Jobless Claims Reach Pandemic Lows
In a sign of further recovery in the labor market, the number of initial jobless claims fell to a pandemic low, continuing the downward trend in worker layoffs. New jobless claims totaled 406,000 for the week, well below the pandemic high of nearly 1.5 million, though still above the 2019 weekly average of 218,000.
FINANCIAL STRATEGY OF THE WEEK
Employee vs Independent Contractor: Classifying Those Who Work for You Appropriately
Classifying workers as independent contractors or employees is important for several tax reasons. The classification comes down to two main considerations: control and relationship.
Control refers to how much of the person's work you control. This includes what work is done and how it's done, as well as if you control the financial aspects of the person's job. In this way, "control" means both behavioral and financial control.
Another important factor is the relationship between the employer and the worker. How both parties perceive this relationship can help you determine worker status. Some factors that influence relationship include:
Written contracts describing the relationship the parties intended to create.
Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation, or sick pay.
The permanency of the relationship.
The extent to which services performed by the worker are a key aspect of the regular business of the company.
The extent to which the worker has unreimbursed business expenses.
Knowing how to classify your workers is important because independent contractors and employees face different tax needs and implications.
As always, please let us know if there is anything we can help with along the way or any financial concerns you may have.
Have a great week!