Mon - Fri : 08:00 - 4:30

Single Blog Title

This is a single blog caption

HI Financial Services Commentary 11-07-2017

Posted By

HI Financial Services Commentary 11-07-2017

You tube link: 

What do you want to talk about today?

The market is stretched

What do I want to be in to close out the year, and to protect for a usually stagnant to down quarter in 2018

Banks to take advantage of a rate hike – BAC, C,  Region ZION

Technology – AAPL, NVDA, SWKS

International exposure in BIDU


Why we do what we do @ Hurley INvestments!!!


What happening this week and why?

Not to many economic events so earning rules the roost

Consumer credit 20.8B vs est 18.3B


Where will our markets end this week?



DJIA – Overbought bullish


SPX –  Bullish



COMP – Bullish overbought



Where Will the SPX end November 2017?

10-31-2017           +2.0%

11-07-2017           +2.0%


What is on tap for the rest of the week?=


Tues:          DF, EMR, JELD, RCL, VG, WB, FOSL, LC, MAR, SNAP, ZG, ZNGA

Wed:          MGM, WEN, CTL, ROKU

Thur:          DDS, DISH, JCI, KSS, M, DHI, DIS

Fri:             JCP


Econ Reports:

Tues:           JOLTS, Consumer Credit

Wed:           MBA,

Thur:          Initial, Continuing Claims, Wholesale Inventories

Fri:             Michigan Sentiment, Treasury Budget



Tues –        

Wed –        

Thursday –   


Sunday –     


How I am looking to trade?

Protective puts on last two stocks I have for earnings


Earnings List:

DHI 11/09 BMO

DIS 11/9 AMC



Why am I using only protective puts for earnings = Blogsite = Email

How the tax bill could change how you save for retirement

  • The Tax Cuts and Jobs Act was unveiled on Thursday, leaving rules on pre-tax contributions to 401(k)s unchanged.
  • Several other proposed changes could affect the way you invest your retirement funds.

Lorie Konish@LorieKonish

Published 7:02 AM ET Sun, 5 Nov

Americans may face new rules to how they save for retirement, if a tax bill released by Congress on Thursday goes through.

The Tax Cuts and Jobs Act left pre-tax contribution limits to 401(k) retirement plans alone, but other changes could affect the way savers invest in these and individual retirement accounts.

The bill goes to “markup” next week, so any changes may not stick, said Jennifer Brown, manager of research at the National Institute on Retirement Security, a research organization.

“They could come in and do other things with retirement that would also raise revenue,” namely lowering pre-tax contribution limits for 401(k)s, which currently stand at $18,000, and $24,000 for individuals 50 and over, even though President Donald Trump has nixed that idea.

Following are some of the proposed changes that will affect retirement savers.

No more undoing IRA conversions

Currently, savers can undo, or “recharacterize,” their Roth, or post tax, individual retirement account contributions to traditional IRAs, or pretax contributions, and vice versa. Savers usually have until Oct. 15 of the year following the conversion to undo the transaction.

But the tax bill includes a repeal of the rule that allows for those transactions.

The change could potentially hurt some investors because it will give them less flexibility, said James Lange, president of Lange Financial Group, which provides services to investors in IRAs and retirement plans.

For example, an investor could make a $30,000 conversion to a Roth IRA. But if the market subsequently fell dramatically and the account dropped to $20,000, the investor would still face a tax bill for the $30,000. Before the change proposed in the tax bill, investors could undo the transaction, according to Lange.

“Now, boom, you have all this additional income and maybe the Roth conversion is pushing you into too high of a tax bracket, and you will not be able to undo it,” Lange said.

Relaxed rules following hardship distributions

Under current rules, employees younger than 59½ cannot take distributions on their retirement accounts while they are still working. But there is an exception for when participants face a significant financial need. Rules currently prohibit those individuals from contributing to their plans for six months following the distribution.

The bill proposes changing that so that individuals who take hardship withdrawals can still continue to save during that time.

Hardship withdrawals beyond employee contributions

Current rules only allow savers to take hardship withdrawals on funds that they have invested in their plans, and not on money the account earned or received from the employer.

But the bill proposes changing that so that both earnings and employer contributions could also be included.

“It would enable larger distributions for those in need,” said Alison Borland, executive vice president of defined contribution solutions at benefits administrator Alight Solutions.

The changes to the hardship withdrawals are a positive for investors, according to Borland, because existing rules can make a bad financial situation worse for the individuals who are facing them.

Extended time to pay back plan loans

Current rules let savers borrow from their plans. When a loan is outstanding and an employee is either terminated or leaves their job, they currently have just 60 days to repay the balance of the loan. If they don’t make that payment, the loan is treated as a taxable distribution.

New changes proposed in the bill would change it so that those workers would have until the due date for their tax return for that year to pay the loan balance.

The change will give individuals more time to pay the loan back, depending on when they cut ties with their job, according to Borland.

Say an employee leaves in March, 2018. They would not have to pay the loan back until their tax bill for that year is due in April, 2019. “That would give you an extra year and a month of flexibility,” Borland said.

Changes to protect ‘older, longer service’ participants

As employers move away from providing pension plans in favor of 401(k)s, that can pose problems for those who are offering both. Employers may have legacy pension plans that are closed to new participants, while offering new employees the opportunity to participate in a 401(k) plan. But that can cause issues with non-discrimination rules, which require that the plans offered do not favor high earners.

The new provision will provide employers with a greater ability to compare those plans in order to make sure they are providing employees with an equal opportunity to save.

The new rule could benefit employees who are 55 and older who have been with a company for a substantial amount of time, by preventing them from getting shut out from participating in their company’s pension plan, according to Borland.

“It tends to be employees close to retirement who have worked for a company for a long time who are most likely to be impacted,” Borland said.

Bull run could hit ‘bumps,’ but Nuveen’s top market watcher sees stocks rallying as high as 10% between now and year-end 2018

Stephanie Landsman@stephlandsman

Published 5:00 PM ET Sun, 29 Oct

The bull run could soon hit turbulence once the record-breaking earnings season ends, according to Nuveen’s Brian Nick.

“We’ll see in November and December as good news headlines go away – what, if anything – takes over and what kinds of bumps we get between now and the end of the year,” the firm’s chief investment strategist said recently on CNBC’s “Futures Now.”

But Nick, whose firm has over $900 billion in assets under management, notes it wouldn’t permanently harm the rally.

“If you’re looking forward into the end of next year, the light is still green for the U.S. economy and for corporate profits,” he added.

“Between now and then, we see the markets anywhere between 8 percent and 10 percent higher, and that’s basically in-line with our expectations for earnings growth,” the investor said.

A strong earnings season has been one of the main drivers for the fresh market highs. With more than half of S&P 500 Index companies reporting so far, nearly three-fourths of them have exceeded Wall Street estimates, while 17 percent missed and 9 percent came in-line.

Since JPMorgan Chase kicked off earnings season on October 12, the S&P 500 and Dow have closed at intraday highs six times, while the Nasdaq reached the same milestone five times. On Friday, both the Nasdaq and S&P closed at new records.

However, Nick points out that the next couple of months could become bumpy as the markets deal with uncertainty over factors such as tax reform, which is currently advancing through Congress.

“I go back and forth with how much of this tax reform package is priced in. Part of the problem is that we don’t have a bill, and we won’t have one until next week,” said Nick. “There’s about a 50 percent chance that we do end up with nothing. I think there’s only about a one in three chance that looks similar to what we have now.”

He said the markets will also need more clarity surrounding the next two Federal Reserve meetings, and the potential new leadership there. President Donald Trump is expected to name a replacement to current Fed Chair Janet Yellen, but has not made a firm decision on who will ascent to the world’s most powerful central bank.

Despite the possible near-term headwinds, he’s reiterating his bull case for next year.

“I think we are going to see stronger earnings not only in the U.S. but abroad, and that’s going to be good for global equities across the board,” Nick said.

House GOP Tax Plan Explained

The House GOP plan looks a lot like the President’s, with a few producer’s notes.

David H. Lenok | Nov 02, 2017

The House GOP released an outline of its eagerly anticipated tax plan Thursday morning. The talking points offer a good overview of what the House GOP considers important and where they may break from President Trump’s previously announced plan.

Here are some of the highlights.

Related: Trump’s Tax Plan Explained

Three Income Tax Brackets for Most Americans, with One Caveat. Similar to the President’s plan, this proposal would create three main income tax brackets (there are currently seven) at 12 percent, 25 percent and 35 percent. However, it breaks from the President by acknowledging the need to maintain a fourth bracket for the highest earners, so it would leave the current top 39.6 percent bracket in place as well.

Repeal the Alternative Minimum Tax. This has long been an unpopular tax. For most Americans it’s a frustrating bookkeeping inconvenience, but for the wealthiest sect it’s a major thorn in their sides. It disallows many common big ticket deductions among the richest Americans and those with complicated businesses, such as incentive stock options and depletion and accelerated depreciation on certain leased personal or real property. For instance, this tax alone cost President Trump some $31 million on his 2005 return (suffice it to say, he isn’t a fan).

Corporate Tax Rate Lowered to 20 Percent. This is a big one and is in lockstep with the President’s plan. The current rate is 35 percent, so this would be “the largest reduction in the U.S. corporate tax rate in our nation’s history,” according to the talking points.

Cap Taxes on Pass-Through Income at 25 Percent. This is basically identical to the proposal in Trump’s plan. However, what’s most relevant for advisors is the potential for clients to recharacterize portions of their income as pass-through and take advantage of this potentially lower tax rate as well. The House GOP plan proposes numerous changes to help close the loopholes currently available, but time will tell how successful that effort will be.

Increase the Standard Deduction and Eliminate Many Special Interest Deductions. As part of a further effort to simplify things so that Americans can “file their taxes on a form as simple as a postcard,” the standard deduction will increase from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples. In exchange, many deductions will be eliminated.

But the Charitable Deduction Stays. When the President proposed eliminating deductions in his plan, one of the main concerns among advisors was what impact repealing the charitable deduction would have on philanthropy nationwide. The House looks to share that concern and specifically calls out the charitable deduction as one that will remain.

Provide Immediate Relief from the Death Tax by Doubling the Exemption and Repealing the Death Tax After Six Years. President Trump’s plan called for a simple repeal of the estate tax, but offered very few details. The House GOP plan calls for the doubling of exemptions and sets a six-year sunset period for full repeal of the estate and generation-skipping transfer taxes. The current exemption is already sky high at roughly $5.5 million ($11 million for couples), so doubling that figure would act as an effective repeal, hitting only the largest (or most poorly planned) estates. That said, it wouldn’t be fully repealed for six years, during which a great deal, including at least one presidential election, can happen. Additionally, it appears that the gift tax will remain technically intact, albeit subject to the now $11 million ($22 million for couples) exemption, which should render it largely toothless.

In the talking points, Congress uses the term “death tax,” although there is no “death tax.” What we’re talking about here is the estate tax. Proponents of repeal have long used the term “death tax” interchangeably with estate tax because it drives home the negative connotations they see with it. (The proper terms are used in the bill itself.)

Overhaul the U.S. International Tax System. What we can infer from the bill points to a system similar to that in the President’s plan that would not tax income that businesses earn in other countries and would encourage the return of assets by allowing a one-time tax holiday on past income earned overseas. The enormity of this particular task ensures that there will be many more developments to come, and readers should expect a more in-depth look at this section from our authors shortly.

Carried What Now? Conspicuous missing from both the President’s plan and the House GOP’s plan is any mention of carried interest, which is currently taxed at a mere 15 percent and largely benefits private equity funds. Increasing this tax to show how tough he would be on Wall Street was a major talking point during Trump’s campaign. It seems to have fallen by the wayside.

Though it breaks from Trump’s plan in a few key areas, ultimately, the House GOP’s plan looks a lot like the President’s, with a few producer’s notes. So, although things will inevitably change in the coming months, we should have a good idea of what the bill Republicans eventually put forward will look like.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.