Shalom to you, our partners in ministry. It is an honor to share with you the latest news from Washington, Savvy Living, Personal Planning, gift stories, finance news, and timely articles.
There are no "asks" in this eNewsletter as it is designed totally to be a helpful service to you. Feel free to share it with others in your family or your friends. If you would like me to send it directly to them please send me their email address.
This information is put together in a way to be a help in understanding what is happening in our economy so you can use it to your best advantage. I hope this information is useful to you.
If you have any questions or I can be of assistance to you please contact me.
David Stone
Director of Donor Relations
PERSONAL PLANNER
Bypass the Estate Tax
The American Taxpayer Relief Act of 2012 created permanent rules for federal estate planning. These principles are helpful in creating estate plans, since there now is reasonable certainty.
Estate Exemption – There is an applicable exclusion amount of $5 million plus indexed increases. For 2016, the exclusion amount is $5.45 million. This amount also applies to gifts and to generation skipping transfer taxes.
Estate Tax Rate – Those estates over the exclusion amount will be taxed at 40%. Estate tax equals $345,800 on the first $1,000,000 and 40% of the excess over that amount, reduced by the applicable exclusion amount. This amount for 2016 is calculated based on a $5.45 million estate and will be $2,125,800. The $5.45 million number will be adjusted for inflation in future years.
Marital Portability – Under "marital portability," a surviving spouse may have both exclusion amounts available. The applicable exclusion amount for a surviving spouse will be the basic exclusion amount of $5 million with cost of living increment plus the "deceased spousal unused exclusion amount." The unused exclusion will be the exclusion amount of the deceased spouse in excess of the basic exclusion amount used in the estate of that spouse. The unused exclusion amount will not be adjusted further for inflation. In order to benefit from this provision, the deceased spouse must die after 2010 and the executor must make an irrevocable election on the federal estate tax return.
If the deceased spouse transfers all assets to the surviving spouse using the unlimited marital deduction, then the surviving spouse should have available the full value of both exclusions. The amount of exclusion cannot exceed twice the basic exclusion amount and only the remaining exclusion of the last deceased spouse may be utilized.
Gift Taxes – There are two exclusions for gifts during life. Present interest gifts qualify for a $14,000 (in 2016) annual exclusion. This gift exclusion is intended to cover birthday, holiday and other gifts. There is one exclusion for each donor and each donee. For example, a couple with two children may give up to $56,000 to their children in 2016 by using four gift exclusions.
Each person also has a lifetime gift exclusion amount equal to the estate exclusion amount for that year. If the gifts exceed annual exclusion amounts, the balance will be reported on the IRS Gift Tax Return Form 709. The amount of gifts reported on Form 709 will reduce the available estate exemption. Gifts in excess of both the annual exclusions and the lifetime gift applicable exclusion amount will be subject to a 40% gift tax.
Generation Skipping Tax – If a donor transfers property to a grandchild during life or through an estate, there is potentially another transfer tax. The generation skipping tax (GST) is 40% on transfers to grandchildren or great-grandchildren that exceed the GST applicable exclusion amount. This GST exclusion is the same as the estate exclusion for the year of the transfer.
Bypass Trusts
Because there is an estate tax with an exemption of $5.45 million in 2016, it will continue to be important for individuals with large estates to create "bypass trusts." The bypass trust is a trust created in the estate of the first spouse to die. It typically will benefit the surviving spouse and the trust principal may then be transferred to children without further estate taxation.
There are two general types of bypass trusts. The conventional bypass trust pays income to the surviving spouse. When he or she passes away, the trust is distributed to children. For individuals who have large IRAs, 401Ks or other qualified pension plans, another option is a "bypass charitable remainder trust."
Bypass Trust Potential Tax Savings
For a couple with larger assets, a bypass trust is created in the estate of the first spouse to pass away. It is typically funded at the amount of the estate exemption. The bypass trust saves future estate tax because the tax in the first estate is offset by the exemption of the first spouse. Because the bypass trust is subject to tax in the first estate (but covered by the estate exemption), it is not taxable in the second estate. While the portability of the marital deduction permits the first spouse to use a simple will and transfer assets to the surviving spouse, a bypass trust permits the appreciation of trust assets during the lifetime of surviving spouse to escape taxation. The savings on this appreciation could be quite substantial in a larger estate.
Assume that there is a $5.45 million exemption per person and Joe and Jane have a $10.9 million estate. They have a simple will with all to the survivor. Joe passes away and transfers his half of the estate to Jane. She then owns all $10.9 million in assets. There is no tax because of the unlimited marital deduction. Joe's executor elects to pass to Jane the $5.45 million "deceased spouse unused exemption amount (DSUEA)."
In the ten years before Jane's death, the estate grows to $14.45 million and Jane's exemption is increased by indexing from $5.45 million to $6 million. When Jane passes away ten years later, her exemption plus the DSUEA total $11.45 million. However, the estate is $14.45 million and $3 million of her estate is taxable. The estate tax at 40% is $1.2 million.
Bill and Betty also have a $10.9 million estate. However, both of them create plans with a bypass trust. Bill passes away in 2016 and his entire $5.45 million estate is transferred to a bypass trust. The trust is exempt because of the $5.45 million estate exemption. Therefore, Bill's estate pays no estate tax. Betty receives income from the bypass trust for her lifetime. When she passes away, the bypass trust and her estate are each $7.17 million. Only her estate is subject to tax. With a $7.17 million estate and a $6 million exemption, the tax is $468,000. The bypass trust saved $732,000 in estate tax.
Bypass Trust Powers
The bypass trust is designed to use the exemption in the first estate and to avoid any tax in the second estate. In order to do this, the trustee must have limited powers to transfer assets to the surviving spouse. If the trustee, who may also be the surviving spouse, can simply transfer the property from the trust for his or her comfort or well-being, there is not an "ascertainable standard" and the trust will be included in his or her estate.
Therefore, the bypass trust typically has a requirement to pay income to the surviving spouse and a permission to transfer principal to the surviving spouse under a "health, education, maintenance and support" standard. In essence, there is an "ascertainable standard" that governs the circumstances in which assets may be transferred to the surviving spouse.
It is also permissible to give the trustee a power to invade the trust to the extent of the greater of $5,000 or 5% of trust assets each year. This power is used fairly infrequently because the assets transferred from the bypass trust to the surviving spouse will be subject to estate tax when he or she passes away.
Bypass Trust Pitfalls
There are many benefits of a bypass trust, but there are also some cautions. First, if the family residence is transferred into the bypass trust, it will usually receive a stepped-up basis to the value when the first spouse passes away. If the home does not appreciate, the bypass trust could sell it without paying capital gains tax. However, if the house is held for a period of years and appreciates, the bypass trust does not qualify for the $250,000 capital gain exclusion for sale of a principal residence. Therefore, there could be substantial capital gains tax payable on that residence if sold by the bypass trust.
Second, if there is a blended family that is going to receive the bypass trust remainder, the spouse may attempt to use the "health, education, maintenance and support" standard to invade the trust. For example, if the surviving spouse is the second husband or wife and the remainder of the bypass trust is going to children of the first marriage, he or she may attempt to invade the trust and then transfer it to his or her own children.
Finally, there could be conflict between the surviving spouse and a child. If the surviving spouse becomes ill and a child takes over as trustee, the child may be reluctant to provide high quality and expensive care for surviving spouse. This expensive care would deplete the trust and reduce the inheritance of the child. Therefore, this conflict of interest could cause problems.
Rights of the Surviving Spouse
In most cases, the surviving spouse will be trustee and will receive all income from the bypass trust. The surviving spouse will have the right to control the property. If there is a family residence in the trust, he or she will be able to live in the home.
Following the standards set up under the health, education, maintenance and support rule for invasion of principal, a surviving spouse may (with appropriate justification) invade principal. Finally, some trusts permit the surviving spouse the greater of $5,000 or 5% invasion power to take principal from the trust.
Bypass Formula Clause
The bypass trust normally is funded with a formula clause in the estate of the first person to pass away. Within that estate, there will be a fractional share or fixed dollar clause that is designed to allocate the maximum amount to the trust that will avoid federal estate tax. If the exemption equivalent is $5.45 million, that amount is generally allocated to the bypass trust.
The spouses and their counsel should also consider the impact of potential state inheritance or estate taxes. For most states, there will be tax that may be levied even on the first estate. Because the state inheritance and estate tax rates are lower than the federal tax, it may still be appropriate to fully fund the bypass trust. However, counsel and the two spouses should review the state tax impact on their plan.
Retirement Funds to Bypass Trust
If the first spouse to pass away has a majority of his or her estate in taxable retirement funds, it may be necessary to use those assets to fund the bypass trust. It is quite easy to do so through a beneficiary designation for the IRA, 401K or other qualified plan. For a 401K or in a community property state, it is necessary to have a spousal consent to fund the trust. In most cases, counsel will require a spousal consent if a trust is to be funded with an IRA, 401K or other qualified retirement plan.
The potential disadvantage of funding the bypass trust with a taxable retirement plan is that it is a wasting asset. That is, as the qualified plan is paid out to the bypass trust, it is subject to income tax. The federal and state income tax may exceed 40% on the plan payouts.
For example, with a $2 million IRA paid to the bypass trust over a 12 year expectancy of a surviving spouse, there could be $800,000 in federal and state income tax. The $2 million IRA could be reduced to $1.2 million after tax.
Bypass Charitable Remainder Unitrust
If the estate is fairly substantial, it may be preferable to transfer the IRA, 401K or other qualified plan into a bypass charitable reminder unitrust (CRT).
The bypass CRT is usually a 5% payout unitrust. It may exist for the life of spouse and lives of children, or it may exist for the life of surviving spouse plus a term of up to 20 years for children.
Because the bypass CRT qualifies for the use of the estate exemption and there is a charitable estate deduction for the value of the remainder interest, it may be larger than the typical bypass trust. For example, with a $5.45 million exemption and a $750,000 present value of the remainder interest, it may be possible to fund the bypass CRT with $6 million and still have zero estate tax.
The CRT has the benefit of tax-exempt status. It may receive the full distribution from an IRA, 401K or other qualified plan tax free. The full value of the plan may then be invested for the benefit of the surviving spouse and children. The value of the total income distributed over a long period of time may actually be similar to the value of income plus principal in a regular bypass trust. With a regular bypass trust, the IRA or 401K will be depleted by payment of a very high income tax rate.
$3 Million IRA to Bypass Trust or to Bypass CRT?
Mary has a $3 million IRA and $3 million in other assets. She passes away and transfers those assets into her $6 million bypass trust for the benefit of husband Joe. The IRA is paid out over the 12 year expectancy of her surviving spouse, Joe. There is $1.2 million in income tax paid on the $3 million IRA, leaving $4.8 million in the bypass trust. Husband Joe and the children receive income from $4.8 million for their lifetimes.
Martha also has a $3 million IRA and $3 million in other assets. She transfers both assets into a bypass charitable remainder trust. The $6 million trust receives a $3 million IRA distribution, but it is tax-exempt. All $6 million is invested to earn income for family for the duration of the lives of surviving spouse Mitchell and their children. This trust will eventually be transferred to charity, but the increased life income to family makes up for the future gift to charity.
SAVVY LIVING
How to Replace Vital Documents that are Lost or Stolen
Can you tell me how to go about replacing important lost documents? My wife and I recently downsized to a retirement community, and somewhere in the move we lost our Social Security and Medicare cards, birth certificates, marriage license and passports.
Replacing important documents that are lost, stolen or damaged is pretty easy if you know where to turn. Here are the replacement resources for each document you mentioned, along with some tips to protect you from identity theft, which can happen if your documents end up in the wrong hands.
Birth certificate: If you were born in the United States, contact the vital records office in the state where you were born (see cdc.gov/nchs/w2w.htm for contact information). This office will give you specific instructions that will explain how to order a certified copy and what it will cost you. Birth certificate fees range between $9 and $30.
Social Security card: You can replace a lost or stolen Social Security card for free. If you live in the District of Columbia, Michigan, Nebraska, Washington or Wisconsin, you can do it online at ssa.gov/ssnumber. If you live outside these areas, you'll need to fill out Form SS-5 (see ssa.gov/forms/ss-5.pdf to print a copy) and take it in or mail it to your nearby Social Security office, along with either your U.S. driver's license, a state-issued non-driver ID card or a U.S. passport (photocopies are not accepted). Any documents you mail will be returned to you. To find the Social Security office that serves your area, call 800-772-1213 or see ssa.gov/locator.
You also need to be aware that losing your Social Security card puts you at risk for identity theft. If you find that someone uses your Social Security number to obtain credit, loans, telephone accounts, or other goods and services, report it immediately to the Federal Trade Commission at IdentityTheft.gov (or 877-438-4338). This website also provides specific steps that you'll need to take in order to handle this problem.
Medicare card: To replace your Medicare card for free, just call the Social Security Administration at 800-772-1213 or contact your local Social Security office. You can also request one online at ssa.gov/myaccount. Your card will arrive in the mail in about 30 days.
Since you lost your Medicare card, you also need to watch out for Medicare fraud. Check your Medicare Summary Notice for services you did not receive and, if you spot any, call the Inspector General's fraud hotline at 800-447-8477 to report them.
Marriage certificate: Contact your state's vital records office to order a copy (see cdc.gov/nchs/w2w.htm). You'll need to provide your full names for you and your spouse, the date of your wedding, and the city or town where the wedding was performed. Fees range from $10 to $30.
Note: Divorce certificates can also be ordered from your state's vital records office (fees range from $5 to $30), and divorce decree documents can be obtained from the county clerk's office in the city or county where the divorce was granted.
Passport: A lost passport also puts you at risk for identity theft, so you need to report this as soon as possible to the U.S. State Department. Go to travel.state.gov/content/passports/en/passports/lost-stolen.html and fill out Form DS-64. You'll receive an e-mail acknowledging that your report was received. Within a couple of days, you'll receive another e-mail (or letter, if you request that option) confirming that your passport has been entered into the Consular Lost or Stolen Database.
You can apply for a replacement passport at a Passport Application Acceptance Facility. Many post offices, public libraries and local government offices serve as such facilities. You can search for the nearest authorized facility atiafdb.travel.state.gov. The fee for a replacement passport is $135.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
How to Replace Vital Documents that are Lost or Stolen
Can you tell me how to go about replacing important lost documents? My wife and I recently downsized to a retirement community, and somewhere in the move we lost our Social Security and Medicare cards, birth certificates, marriage license and passports.
Replacing important documents that are lost, stolen or damaged is pretty easy if you know where to turn. Here are the replacement resources for each document you mentioned, along with some tips to protect you from identity theft, which can happen if your documents end up in the wrong hands.
Birth certificate: If you were born in the United States, contact the vital records office in the state where you were born (see cdc.gov/nchs/w2w.htm for contact information). This office will give you specific instructions that will explain how to order a certified copy and what it will cost you. Birth certificate fees range between $9 and $30.
Social Security card: You can replace a lost or stolen Social Security card for free. If you live in the District of Columbia, Michigan, Nebraska, Washington or Wisconsin, you can do it online at ssa.gov/ssnumber. If you live outside these areas, you'll need to fill out Form SS-5 (see ssa.gov/forms/ss-5.pdf to print a copy) and take it in or mail it to your nearby Social Security office, along with either your U.S. driver's license, a state-issued non-driver ID card or a U.S. passport (photocopies are not accepted). Any documents you mail will be returned to you. To find the Social Security office that serves your area, call 800-772-1213 or see ssa.gov/locator.
You also need to be aware that losing your Social Security card puts you at risk for identity theft. If you find that someone uses your Social Security number to obtain credit, loans, telephone accounts, or other goods and services, report it immediately to the Federal Trade Commission at IdentityTheft.gov (or 877-438-4338). This website also provides specific steps that you'll need to take in order to handle this problem.
Medicare card: To replace your Medicare card for free, just call the Social Security Administration at 800-772-1213 or contact your local Social Security office. You can also request one online at ssa.gov/myaccount. Your card will arrive in the mail in about 30 days.
Since you lost your Medicare card, you also need to watch out for Medicare fraud. Check your Medicare Summary Notice for services you did not receive and, if you spot any, call the Inspector General's fraud hotline at 800-447-8477 to report them.
Marriage certificate: Contact your state's vital records office to order a copy (see cdc.gov/nchs/w2w.htm). You'll need to provide your full names for you and your spouse, the date of your wedding, and the city or town where the wedding was performed. Fees range from $10 to $30.
Note: Divorce certificates can also be ordered from your state's vital records office (fees range from $5 to $30), and divorce decree documents can be obtained from the county clerk's office in the city or county where the divorce was granted.
Passport: A lost passport also puts you at risk for identity theft, so you need to report this as soon as possible to the U.S. State Department. Go to travel.state.gov/content/passports/en/passports/lost-stolen.html and fill out Form DS-64. You'll receive an e-mail acknowledging that your report was received. Within a couple of days, you'll receive another e-mail (or letter, if you request that option) confirming that your passport has been entered into the Consular Lost or Stolen Database.
You can apply for a replacement passport at a Passport Application Acceptance Facility. Many post offices, public libraries and local government offices serve as such facilities. You can search for the nearest authorized facility atiafdb.travel.state.gov. The fee for a replacement passport is $135.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
YOUR PLAN
Capital Gains Tax Bypassed
Capital Gains Tax Bypassed
Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities and built a sizable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising. Now with retirement on the horizon, they were looking for a way to sell their highly appreciated stock, generate income for their future and avoid paying high capital gains tax.
Peter: For many years we had supported the work of our favorite charity. Through an e-mail we learned that we could make a gift of our appreciated stock to charity and bypass the potential capital gains tax cost we were facing. I was thrilled to learn that after transferring our portfolio to a charitable remainder trust, the trust would sell the stock tax free.
Gail: I liked the fact that the trust would provide us with income for our retirement years. If something happened to Peter, I would still be taken care of for the remainder of my life.
Peter and Gail decided to make a gift of their appreciated stock to establish a charitable remainder unitrust. They were thrilled at the prospect of creating future income while bypassing capital gains tax.
Peter: When I heard that in addition to the other benefits we would receive a charitable deduction for our gift, it was just icing on the cake! I wondered why everyone nearing retirement doesn't set up a charitable trust.
*Please note: The name and image above is representative of a typical donor and may or may not be an actual donor to our organization. Since your unitrust benefits may be different, you may want to click here to view a color example of your benefits.
WASHINGTON NEWS
Member Day on Tax Reform
On May 12 the House Ways and Means Tax Policy Committee held a “Member Day” on potential tax reform ideas. Over 30 members of congress shared suggestions for future tax changes.
Tax Policy Subcommittee Chair Charles Boustany (R-LA) opened the meeting and thanked the 30 members for attending. He noted, “Today the Subcommittee will hold a hearing on Members’ proposals for improvements to the current U.S. tax system. We are honored to have a number of our esteemed colleagues join us today to present legislation that they have all invested in a great deal of time and energy to develop.”
The Ranking Member of the Subcommittee is Richard Neal (D-MA). He expressed a hope that tax reform would increase employment. Neal continued, “Reforming our tax code remains of utmost importance. I look forward to hearing from our witnesses today on how their plans will create jobs, promote economic growth and grow the middle class.”
Rep. James Renacci (R-OH) suggested that tax reform is the key to making American businesses competitive. He proposed replacing the corporate income tax with a tax on “business activities” of corporations. Renacci believes his plan will “foster growth, encourage investment and ensure a level playing field” for businesses. The business consumption tax would also enable “middle income households” to enjoy an increase in after-tax income.
Rep. Linda Sanchez (D-CA) highlighted the need to protect American workers in a potential reform bill. She stated, “We cannot fix the tax code for one group and leave another worse off. My biggest fear in this process has always been a final package that puts American workers and the domestic businesses that employ them in an even more unequal footing in our tax code.”
Rep. Vern Buchanan (R-FL) proposed a change in the tax system for businesses operated as partnerships or other similar “pass-through” entities. Buchanan noted, “Many places in the country have state and federal rates combined for 50%; my bill simply says lower those tax rates and level them going forward.”
Editor’s Note: It is very likely that major tax bills will not be enacted until after the Presidential election. While major reform is not likely before 2017, the House Ways and Means Committee Members are appropriately gathering ideas for future tax reform bills.
FINANCES
Stocks - Disney Missing Some Magic This Quarter
The Walt Disney Company (DIS) released its second quarter earnings on Tuesday, May 10. Despite increased revenue and earnings, the report fell below analysts' expectations, causing stocks to fall 5% during Tuesday's trading.Disney announced revenue of $12.97 billion. While this number is up from $12.46 billion in the same quarter last year, it fell below analysts' forecasts of $13.20 billion.
"We're very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS," said Disney CEO Robert A. Iger. "Our Studio's unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value. Looking forward, we are thrilled with the Studio's slate and tremendously excited about the June 16th grand opening of the spectacular Shanghai Disney Resort."
Disney reported net income of $2.14 billion, or $1.30 a share—up from $2.12 billion, or $1.23 per share—in the prior-year quarter. Analysts expected earnings to reach $1.40 a share.
While Disney's film and theme park businesses were strong thanks to movies like "Star Wars: The Force Awakens" and "Zootopia," subscriptions and ad revenue declined at its sports channel, ESPN. Disney attributed the loss to a change in timing of college football playoff games. In order to cut expenses, Disney announced on Tuesday it will be discontinuing "Infinity," its series of live action video games, which were expensive to produce and faced competition from similar video game products. Moving forward, Disney plans to focus on licensing its characters for video games rather than developing them in house.
The Walt Disney Company (DIS) shares ended the week at $100.52, down 5.2% for the week.
Macy's Earnings Continue to Decline
Macy's, Inc. (M) announced its first quarter earnings on Wednesday, May 11. The company reported a 7.4% fall in quarterly sales as consumers continue to tighten their retail purse strings.
Macy's revenue fell to $5.77 billion in the first quarter from $6.23 billion last year. The 7.4% drop sent share prices down more than 15% on Wednesday.
"We are seeing continued weakness in consumer spending levels for apparel and related categories. In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook. Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy's and Bloomingdale's are key destinations," said Terry J. Lundgren, Macy's, Inc. CEO. "[A]s a result of these factors, we believe it is prudent to reduce our sales and earnings guidance for the 2016 fiscal year."
Net income for the first quarter was $115 million, down from $193 million in the first quarter last year. On an earnings per share basis, Macy's reported earnings of $0.37 per share compared to $0.57 per share a year ago.
Macy's is one of many department stores experiencing the painful effects of the current retail slowdown. With revenue declines accelerating, Macy's announced on Wednesday that it will be cutting its fiscal 2016 guidance from $3.80 to $3.90 a share to $3.15 to $3.40 a share. The problem for Macy's isn't that consumers are not spending—it is where they are spending. Analysts explain that instead of dropping cash at department stores, consumers are directing more of their funds toward restaurants, travel and home improvement.
Macy's, Inc. (M) shares ended the week at $31.22, down 16% for the week.
SodaStream's Earnings Pop
SodaStream International, Ltd. (SODA) announced first quarter earnings on Tuesday, May 10. The company reported a big earnings improvement as it shifts away from sugary soda to sparkling water.
SodaStream's revenue increased 10.4% during the quarter to $100.9 million. This topped estimates for revenue of $89 million.
"Our first quarter results demonstrate that our growth plan, which centers on repositioning the SodaStream brand around sparkling water and building a stronger, more efficient organization, has started to take hold," said SodaStream CEO Daniel Birnbaum. "Sales exceeded our expectations driven by strong gains in Europe as our new messaging fueled increased demand for sparkling water makers, gas refills and our enhanced flavor line in turnaround markets like France and the Nordics, while we experienced continued growth in our established countries of Germany, Austria and Switzerland."
SodaStream reported net income of $6.1 million or $0.29 per share. This beat estimates for earnings per share of $0.11.
SodaStream's first quarter results sent a strong signal to investors that the company is heading in the right direction. The shift away from sugary sodas toward sparkling water has resulted in increased revenue and profits. Evidence of this increase was seen in Western Europe, SodaStream's largest market, where revenue rose 15% during the quarter. Following the earnings announcement, shares of SodaStream rose 21%.
SodaStream International, Ltd. (SODA) shares ended the week at $18.45, up 24% for the week.
The Dow started the week of 5/9 at 17,744 and closed at 17,535 on 5/13. The S&P 500 started the week at 2,058 and closed at 2,047. The NASDAQ started the week at 4,736 and closed at 4,718.
Bonds - Yields Finish Week on Low Note
Treasury yields got a modest boost Friday, May 13 following the release of encouraging economic news regarding U.S. retail sales. However, yields were trading lower than they were previously during the week.On Friday the Commerce Department reported that retail sales rose 1.3% during April. This was the highest monthly gain since March 2015 and better than economists' 0.8% forecast.
Before news of the retail sales increase, the benchmark 10-year note yield was 1.728%, down from a closing yield of 1.758% on Thursday. The 10-year yield then got a boost, rising to 1.741%. This was still lower than last week's closing yield of 1.78%.
While the retail sales increase was welcome news to bond traders after April's disappointing jobs report, many analysts believe the Federal Reserve remains unlikely to raise interest rates anytime soon. Investors are "not confident that the economy is going to produce the type of growth going forward that's going to force [a raise in rates]," said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia.
Hopes of an interest rate hike still remain, however. Comments from voting members on the Federal Reserve's interest-rate policy committee have hinted that a raise in rates may be necessary in the near future. New York Fed President William Dudley even told the New York Times that two rate increases this year remain a possibility.
The 10-year Treasury note yield finished the week of 5/9 at 1.70% while the 30-year Treasury note yield was 2.55%.
Read More
CDs and Mortgages - Interest Rates Continue Decline
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, May 12. The report revealed interest rates reaching their low point for the year in what has been a three-week decline.CDs and Mortgages - Interest Rates Continue Decline
The 30-year fixed rate mortgage averaged 3.57% this week. This represents a decrease from last week when it averaged 3.61%. Last year at this time, the 30-year fixed rate mortgage averaged 3.85%.
This week, the 15-year fixed rate mortgage averaged 2.81%. This was down from last week when it averaged 2.86%. The 15-year fixed rate mortgage averaged 3.07% one year ago.
"Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8% since late March," said Sean Becketti, Chief Economist at Freddie Mac. "As a result, the 30-year mortgage rate fell 4 basis points to 3.57%, a new low for 2016 and the lowest mark in three years. Prospective homebuyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks."
Based on published national averages, the money market account finished the week of 5/9 at 0.52%. The 1-year CD finished at 1.11%.
Thank you for your interest in planned giving. To access any of our resources, please go to our website.
Your Brother in Yeshua (Jesus),
David Stone
Jews for Jesus
Our mailing address is:
Jews for Jesus
60 Haight Street
Your Brother in Yeshua (Jesus),
David Stone
Jews for Jesus
Our mailing address is:
Jews for Jesus
60 Haight Street
San Francisco, California 94102, United States
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