THE WEEK ON WALL STREET
Stocks notched a slight gain over the holiday week. A tech-driven rally in the first half of the week was clawed back in the second half as investors took profits following the market holiday. The Standard & Poor’s 500 Index advanced 0.67 percent, while the Nasdaq Composite Index rose 0.76 percent. The Dow Jones Industrial Average added 0.35 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.54 percent.
FACT OF THE WEEK
Tomorrow is December 31, 2024. December 31 is the 365th day of the year (366th in leap years) in the Gregorian calendar. It is known by a collection of names including: Saint Sylvester's Day, New Year's Eve or Old Year's Day/Night, as the following day is New Year's Day. It is the last day of the year; the following day is January 1, the first day of the following year.
MARKET MINUTE
Ho-Ho, Then No-Go
Stocks rallied during the first half of a shortened holiday trading week. Holiday cheer won out despite news of declining consumer confidence in December, a drop in durable goods, and new home sales reporting below expectations. The “Santa rally” lost its ho-ho-go after the midweek holiday. Megacap technology stocks led markets down on Friday, giving back most of the gains from the first half of the week.
The Real Santa
While Santa got the headlines, the consumer drove the holiday shopping sleigh this year.
Holiday spending—defined by the period from November 1 through December 24—rose 3.8 percent in 2024, compared with 3.1 percent in 2023. Economists closely follow consumer activity since consumer spending makes up roughly two-thirds of total gross domestic product. Market watchers attributed the strong job market and growth in household wealth as the primary drivers of consumer strength.
FINANCIAL STRATEGY OF THE WEEK
The Internal Revenue Service has released new limits for the coming year.
Individual Retirement Accounts (IRAs)
IRA contribution limits remain unchanged in 2025 at $7,000. Catch-up contributions for those over age 50 also remain at $1,000, for a total limit of $8,000.
Roth IRAs
The income phase-out range for Roth IRA contributions increases to $150,000-$165,000 for single filers and heads of household, a $4,000 increase. For married couples filing jointly, the phase-out will be $236,000 to $246,000, a $6,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.
Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2025, the limit rising to $23,500. Those aged 50 and older will still be able to contribute an extra $7,500, bringing their total limit to $31,000.
SIMPLE Accounts
A $500 increase in limits for 2025 gives individuals contributing to this incentive match plan a $16,500 stoplight.
Keep in mind that we provide updates for informational purposes only, so consult with your tax professional before making any changes to your tax strategy. You can also contact our offices, and we can provide you with information about the pending changes.