Financial and Economic Brief - June 1, 2021

by © Liberty Publishing, Inc.

The Biden 2022 $6 Trillion Budget – Will it Produce Record Inflation?

The Biden Administration has proposed one of the largest Budget spending bills since the WWII economic era. Many economic experts are suggesting that if Congress does not rein it in that inflation may return with a vengeance. The Country is already witnessing rising prices in many sectors of the economy although it is difficult to accurately determine what that percentage rate is. However, fuel, housing, and building supplies are just a few gauges by which we are able to make a calculated guesstimate. Here is a breakdown of how the money will be spent.
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How a Cut in the Gift and Estate Tax Exemption Will Affect You

The current Gift and Estate Tax Exemption is a healthy $11.7 Million per individual and $23.4 Million per couple for 2021. That makes it possible for most Americans to transfer their hard-won assets to their children or other heirs. However, if the exemption were to be cut in half, now we have an entirely different story. Hypothetically, the new tax dragnet will apply to a significantly larger number of taxpayers; and that is basically the idea. It is surely a wise idea to reexamine your estate plan in light of the potential changes to the tax code.
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Is it Possible that the US Federal Government Will Issue its Own Crypto Currency?

Crypto currencies, of which there are presently around 4,000, have an equivalent value of about $2 Trillion (Bitcoin being the largest). Congress is taking notice after realizing there is no stopping the growth of crypto around the world. Several Congressional leaders have proposed a bill to establish a task force to study the efficacy of launching a Federal digital currency as well as other salient issues. There are many challenges that need to be analyzed by a whole host of players before the report is issued. The goal of many is to make certain the we are keeping up with technology or at least we appear to be.
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Financial and Economic Brief - June 1, 2021

• The Biden 2022 $6 Trillion Budget – Will it Produce Record Inflation? – The Biden Administration has proposed one of the largest Budget spending bills since the WWII economic era.

• How a Cut in the Gift and Estate Tax Exemption Will Affect You – The current Gift and Estate Tax Exemption is a healthy $11.7 Million per individual and $23.4 Million per couple for 2021.

• Is it Possible that the US Federal Government Will Issue its Own Crypto Currency? – Crypto currencies have an equivalent value of about $2 Trillion.

Financial and Economic Brief - May 1, 2021

• Top Combined Capital Gains Tax Rates Would Average 48% Under Biden’s Tax Plan - If new Capital Gains tax rates go into effect it will mean a huge tax increase not seen since the 1920’s.

• Crypto Currency is Reaching a Mainstream Audience – For those considering investing or buying Crypto Currencies there is a bit of a learning curve involved in making such a decision.

• Mortgage Rates and Home Purchases Continue to Fluctuate - Over the past few weeks demand for new housing and new mortgages has shown a slight decline.

Economic Environment: Unemployment Still High Despite Improvement

At the end of March, Federal Reserve Chairman Ben Bernanke said that the Fed's low interest rate policy is likely to remain in place a while longer to combat lingering problems in the labor market. The jobs market has been strengthening in recent months, but the unemployment rate is still high and may not fall much lower without stronger, sustainable economic growth.

Market Review: Financials Lead Stocks to Strong Returns

Large-, mid-, and small-cap stocks enjoyed a robust quarter with returns in excess of 12%, and growth stocks outperformed value stocks across all market capitalizations. In the large-cap universe, as measured by the S&P 500, all sectors, save utilities, advanced, led by financials and information technology with returns higher than 20%.

Upbeat earnings continue to outweigh mixed economic data and Europe concerns

Stocks moved higher as good earnings reports prevailed over investors' persistent worries about the European debt crisis, as well as some data suggesting a slowdown in the U.S. economic recovery. Markets started the week on a down note in reaction to a steep drop in European stocks...

U.S. Stocks Gain as U.S. Economy Improves

The S&P 500 Index turned in its best quarterly performance since the third quarter of 2009 as the eurozone backed away from the point of collapse, the U.S. economy showed continued signs of life, and central banks pledged to step in and support global economic growth. Investors diverted assets from relatively safe but low-yielding bonds into riskier investments following last year's turmoil. Strong corporate earnings reports also bolstered U.S. equity returns.

Economic Environment: Unemployment Still High Despite Improvement

At the end of March, Federal Reserve Chairman Ben Bernanke said that the Fed's low interest rate policy is likely to remain in place a while longer to combat lingering problems in the labor market. The jobs market has been strengthening in recent months, but the unemployment rate is still high, and it may not fall much lower without stronger, sustainable economic growth.

U.S. Gains on Improved Economy, Strong Corporate Earnings

Despite stumbling near the end of the month, major U.S. stock indexes rose in March, adding to the gains of the first two months of 2012. The S&P 500 Index reached the 1,400 mark for the first time since May 2008, and the Dow Jones Industrial Average climbed to its best level since the beginning of the financial crisis.

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