Broker Check

The Weekly Wealth Report

June 07, 2021

The Week on Wall Street

A strong, but not too strong, employment report sparked a rally on the final day of trading, propelling stocks to a modest gain for the week.

The Dow Jones Industrial Average climbed by 0.66%, while the S&P 500 added 0.61%. The Nasdaq Composite index increased by 0.48%. The MSCI EAFE index, which tracks developed overseas stock markets, edged up 0.10%.


Graceland, once owned by singer and actor Elvis Presley, was opened to the public as a museum on June 7, 1982. The site was listed in the National Register of Historic Places on November 7, 1991, becoming the first site related to rock and roll to be entered therein. Graceland was declared a National Historic Landmark on March 27, 2006, also a first for such a site. Graceland is the third most-visited house in the U.S. after the Biltmore Estate and the White House, with over 650,000 visitors a year, making it the most-visited privately owned home in America.


Rotation Continues

Markets have traded sideways since mid-April, though beneath the surface has been ongoing sector rotation. Last week continued that trend.

While stocks ended on a strong note, the performance of industry sectors varied widely. Energy, real estate, utilities, and a number of reopening stocks performed well, while consumer discretionary, communication services, healthcare, and technology stocks lagged.

The Fed announced on Wednesday that it will soon begin selling the corporate bonds and exchange-traded funds it had accumulated during the pandemic, an action that some observers interpreted as a harbinger of an approaching change in its easy-money policies. But the below-consensus May job figure on Friday buoyed investors who believe the Fed will not change course soon.

Labor Market Recovery

It was a good week for the labor market. Initial jobless claims fell to pre-pandemic levels (385,000), ADP (Automated Data Processing) reported a big jump in private-sector hiring (978,000), and the monthly employment report saw nonfarm payrolls increase by 559,000 in May – a healthy increase even though it fell short of some expectations. The unemployment rate declined to 5.8% from April’s 6.1% level.

Friday’s report showed that total employment numbers still remain about seven million jobs below their pre-pandemic levels. It also showed an acceleration in wage gains, which rose 2% year-over-year following the 0.4% gain in April.


Plan Ahead for Vacation Home Rentals

With summer just around the corner, many homeowners who own vacation rentals are preparing for the busy season. There's a lot to consider when looking at the tax situation of vacation home rentals.

If you receive money for the use of your primary residence, you may have to report this rental income on your tax return. This means that the "vacation home rental" classification can apply to you, even if you don't own multiple short-term rental properties. If the property is used as a home, the rental expense deduction is limited. In the case of a property used as a home, the rental expenses can't be more than the rent received on the property itself. If the home is rented out for less than 15 days during the year, the rental income may not need to be reported.

A vacation home is a house, apartment, condominium or other dwelling that you use to generate income, but you can also use as a residence during the year. For tax purposes, it's critical to divide the expenses of a property into personal and business purposes.

To report rental income and rental expenses, use Schedule E. In addition, rental income may also be subject to Net Investment Income Tax.

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!