Some taxpayers who tie the knot still face the ‘marriage penalty’

an antique store with old furniture, mirrors

Frank Rothe | Photonica | Getty Images

Whether you’d like to give away several thousand bushels of soybeans or a prehistoric fossil, there just might be a charity that’s willing to receive it.

Year-end tends to be a busy time for individuals who are in a giving mood. Donors seeking a break on their 2018 taxes must make their charitable contributions before Dec. 31.

Keep in mind that it’s also harder to take the deduction for charitable giving, as the Tax Cuts and Jobs Act has roughly doubled the standard deduction to $12,000 for singles and $24,000 for married couples who file jointly and limited certain itemized deductions, including a break for state and local taxes.

As a result, fewer people are expected to itemize in 2018 and fewer individuals will qualify to claim their charitable donations on their taxes.

For those who can itemize, cash donations and highly appreciated stocks often are the items generous filers want to give away. However, these aren’t the only things charitable organizations are willing to take.

For instance, Fidelity Charitable received close to $1 billion in so-called complex assets in 2017.

“Complex assets are basically what isn’t traded publicly, including private shares, bitcoin, real estate and bags of corn,” said Amy Pirozzolo, vice president at Fidelity Charitable.

“If you have stuff in your house you can’t wait to get rid of, you think it’s the most valuable thing in the world.” -Tim Steffen, CPA, director of advanced planning at Robert W. Baird & Co.

This year, a farmer had a bumper crop of soybeans and made a gift of 3,400 bushels to his Fidelity donor-advised fund — a tax-advantaged account donors can use to deposit charitable contributions and make grants to their favorite causes.

The firm helped monetize the soybeans and fund the farmer’s account, Pirozzolo said.

Just like cash donations, donors can also claim a deduction on their taxes for their gifts. In 2016, 22.9 million income tax returns claimed a deduction for noncash charitable contributions, the IRS found.

Here’s what you need to know if you have an offbeat donation you’d like to make.


Cramer on Monday’s stock surge: ‘Talk about classic bear market behavior’


Jim Cramer says its a bear market

Cramer: This looks like a ‘bear market rally’   21 Hours Ago | 02:39

CNBC’s Jim Cramer said early Monday the market is displaying “classic bear market behavior” with U.S. stock futures pointing to a rise of more than 200 points for the Dow Jones Industrial Average after last week’s drubbing.

“Talk about classic bear market behavior,” Cramer said in a tweet before the opening bell. “We crater all week and then we open up huge on nothing, but because we are so oversold it is hard to let things go.”

Explaining his tweet further, Cramer said on CNBC’s “Squawk Box,” “It’s a bear market rally. You go down really hard last week. And then you come in on Monday and it’s up a lot. People come in. They buy it and lose money.”

He added, “I have tremendous contempt for this market, because every time you try to make money with it, it cuts your heart out.”

Shortly after Monday’s open on Wall Street, the Dow bounced about 300 points higher, pushing the blue-chip average further away from correction territory. The rally also lifted the S&P 500 out of a correction, which is defined as a downward move of 10 percent or greater from recent highs. A bear market is measured by a decline of 20 percent or more from recent highs.

Cramer has repeatedly blamed the Federal Reserve under Chairman Jerome Powell for spooking the markets, saying central bankers need to recognize that the economy is slowing and they can’t move rates to a preconceived notion of so-called neutral.

Cramer warned last week that investors should sell their stocks if they expect the Fed to hike interest rates next month.

Wall Street expects a move in December and so does Cramer. The Fed already hiked rates three times this year.


Here’s one way to give your kids a jump-start on their future

Parents often open savings accounts for their children. Few think of starting a retirement account for a 10-year-old.

The idea isn’t so farfetched.

Any parent, grandparent, aunt, uncle or family friend can open a Roth individual retirement account to help a child invest for the future.

Think money from tutoring, babysitting, mowing lawns or even raking leaves and shoveling snow.

“It’s a great way to give kids a big head start on saving for retirement — and an opportunity for them to learn valuable lessons about saving and investing” said Stuart Ritter, a senior financial planner at T. Rowe Price.

Like a regular Roth IRA, the minor must have earned income to be eligible, and the contribution amount cannot exceed the earnings in a given year. For example, if your child earned $1,000 as a camp counselor last summer and that’s the only job they held for the year, then that $1,000 is the most that can be contributed to the account.

The maximum contribution for 2018 is $5,500 but that will rise to $6,000 in 2019. It doesn’t have to be in the form of a paycheck, either. Cash is fine as long as it’s been documented.

Consider this: If an 18-year-old contributed the maximum 2018 amount of $5,500 for one year, then the 2019 maximum amount of $6,000 for the next three years, they could have more than $500,000 when they reach age 65 (assuming a 7 percent annual growth rate and no additional contributions after age 21).

If they continued to contribute every year, your teen could have a nest egg of over $2.4 million by the time they’re at retirement, according to an analysis by Fidelity.

At Fidelity, the average Roth IRA for Kids account size was $3,801 as of the end of June. The investment firm said the number of new accounts jumped nearly 500 percent since they were introduced in 2016.

Now, Fidelity, Charles Schwab and TD Ameritrade offer custodial Roth IRAs with no minimum investment and no maintenance fees. Others, such as T. Rowe Price and Vanguard, have a minimum investment of $1,000.

The adult is the “custodian” and maintains control of the account and invests on the child’s behalf until they meet the required age, which varies by state but is generally age 18. And unlike a traditional savings account, a Roth IRA lets you and your child pick and choose investments, which can make a substantial difference on your rate of return.

The minor can then use those funds for college costs or other expenses, like a down payment on a first home.


Wall Street bull Tony Dwyer lists 3 reasons why it’s the wrong time to get bearish

One of Wall Street’s biggest bulls: Stick with stocksEven if the market sell-off worsens, one of Wall Street’s biggest bulls says now is not the time to turn negative.

Canaccord Genuity’s Tony Dwyer considers it his most important investment advice in this wild market.

“I’ve been one of the biggest bulls during throughout this entire cycle,” he said last week on CNBC’s “Trading Nation,” “I’m going to remain that way until you invert the yield curve, shut down credit and the Fed takes us into recession. We are still just not there yet.”

Yet, he did see trouble ahead earlier this year. Dwyer began warning investors in July that market conditions were pointing to a correction. It’s a prediction he intensified this fall as the market was surging to all-time highs.

By early October, Dwyer saw signs the rally was cracking, and he became one of the Street’s first strategists to warn investors that a correction was underway.

“Corrections happen when there’s excessive optimism and low volatility,” he said Oct. 4 on CNBC’s “Fast Money.” “Bullish newsletter writers again have been over 60 percent. That’s just too much. There’s too many people that are saying pro-U.S.”

Those comments were made on a day when the S&P 500 closed at 2,901.61. Since then, the index has dropped 9.7 percent. The S&P is now down 1.54 percent this year and more than 10 percent from its intraday record high hit on Sept. 21.

“This has been one of the nastiest corrections that we’ve seen just in terms of how sharp the decline has been,” he said. “We’re in the process of retesting those lows.”

His S&P year-end target was 3,200 until Oct. 26, when he downgraded it to a range of 2,900 to 2,950. Now, he believes the index will hit 3,200 early next year. That’s still roughly a 20 percent leap from current levels.

However, that doesn’t mean there won’t be any more setbacks.

“I’m not saying that every tick from here is going to be higher,” Dwyer said, adding that historical trends indicate investors should be able to recapture their losses relatively quickly.


3 sectors that offer investors solid returns as the bull market loses steam

A fighting bull goes around Estafeta corner on the sixth day of the San Fermin running-of-the-bulls on July 11, 2011 in Pamplona, Spain.

Getty Images

Is the bull run finally coming to an end? Many investors think so, including Steve Cohen, the billionaire hedge fund manager who said last week that we’re in a late market cycle and returns over the next two years won’t look so good. With the benefits of tax reform in the rearview mirror and with labor productivity slowing, others think that America’s GDP, which expanded by 3.5 percent in the third quarter, will grow more slowly in 2019.

For Jeff Mills, co-chief investment strategist at PNC Financial, that means adjusting his company’s portfolios to take advantage of late-cycle opportunities — and to give more thought to what might happen when the bull becomes a bear. “I don’t think it’s going to come to an abrupt end,” he said, “but growth will absolutely slow next year.”

Investors may already be anticipating a turn of events despite strong third-quarter growth. Since January the S&P 500 has fallen by 2.35 percent, its worst performance since the 2008 recession, while the Dow Jones Industrial Index is also down 2.17 percent on the year.

The SPDR S&P 500 ETF Trust, which tracks the S&P 500 and is the world’s largest exchange-traded fund, with $256 billion in assets under management; and the SPDR Dow Jones Industrial Average ETF, which has $22 billion in AUM, have dropped by 2.05 percent and 2.10 percent, respectively, year-to-date, according to S&P Capital IQ.

U.S. markets have struggled — the S&P 500 and the DJIA fell on Friday by 0.66 percent and 0.73 percent, respectively, largely because of worries over trade wars and rising interest rates, said Kristina Hooper, Invesco’s chief global market strategist. “Tightening can potentially asphyxiate economic growth, and there’s potential for trade wars to get worse,” she said. “Those two factors have impacted markets this fall.”

Going forward, it’s going to be harder for companies to generate the same kind of earnings as they have been, while these two risk factors could cause the economic cycle, which she said is in the midst of moving from a mid- to late-cycle, to end faster than expected. “I still think the business cycle has some legs, but overtightening by central banks and trade wars could hasten the demise of the economic expansion,” she said.

Stay in tech

Historically, investors have gravitated toward more defensive- and commodity-focused sectors in late cycles. The best-performing industries in 2007, for instance, were energy, materials and utilities, while consumer discretionary and real estate were two of the worst. However, Hooper said that because this cycle is so different from previous ones — it’s going on nine years, and it was started by unprecedented monetary easing — old playbooks don’t apply.

Technology, which typically doesn’t do as well later in the cycle, will keep outperforming, she said. Why? Because investors will be desperate for growth, and tech is one of the only sectors that’s continuing to innovate and expand.

However, it may not be the FAANGs — Facebook, Amazon, Apple, Netflix and Google — that lead the way. Some of these high-growth companies have tumbled recently, partly because of slowing user growth, privacy concerns and worries around possible regulation. All five stocks have fallen between 28 percent and 16 percent over the last three months. (Netflix has dropped the most, Google the least.)

FAANG fears in focus

FAANG fears in focus   7:28 AM ET Tue, 20 Nov 2018 | 02:29

Still, there are opportunities as the cycle nears its end, she said, especially in cloud computing, AI and other innovative areas that continue to grow. “You can’t paint all of tech with the same brush,” she said. “Investors should be cautious with the FAANGS, but there are selective buying opportunities … in areas like AI, cloud computing and fintech as valuations look more attractive given the sell-off, and growth potential is high.”

PNC Financials’ Mills is more partial to companies like Microsoft, Visa and Apple, even with the latter’s underperformance. These companies have no debt and strong cash flows — net operating cash flow was $43 billion, $12 billion and $77 billion, respectively, at the end of their last fiscal years, according to NASDAQ — and should continue to do well as long as consumers continue to spend. (Investors can also take comfort in knowing that Warren Buffett still owns about $50 billion worth of Apple stock.)


How to avoid getting hacked on Cyber Monday

How to outsmart the holiday shopping season

Nothing will kill your holiday cheer like good ol’ identity theft.

Shoppers are expected to spend a record $7.8 billion this Cyber Monday, up over 17 percent from last year, according to estimates from Adobe Insights, based on a survey of over 1,000 consumers in October. At the same time, attacks against consumers spike during the busy online shopping holiday, according to OpenVPN, a provider of networking and software technologies.

“Consumers need to be on high alert when shopping during Cyber Monday because scammers and hackers are looking to steal their good cheer and hard-earned cash,” said Adam Levin, the author of “Swiped: How to Protect Yourself in a World Full of Scammers, Phishers and Identity Thieves.”

“Consumers need to be on high alert when shopping during Cyber Monday.” -Adam Levin, founder of CyberScout

And yet, just 15 percent of Americans are concerned about cybersecurity when shopping online, according to separate report by ExpressVPN, another VPN service provider.

About 2 in 3 respondents said the convenience of online shopping during the holidays outweighs the risk of a potential data breach, according to the University of Phoenix’s cybersecurity dangers for holiday shopping study.

Further, more than three-quarters of those surveyed admitted that they have “bad online habits” — including using the same password across multiple accounts, allowing social media and applications to access personal information and storing credit card information online. The University of Phoenix surveyed 2,000 adults in April and May, of which 859 have been hacked in the past three years.

“An enormous number of people are footloose and fancy free when it comes to their interactions with retailers over the holiday season,” Levin said.

But if you are not careful, “you are going to become the gift that keeps on giving,” he added.

Levin and other cybersecurity experts offer these tips to steer clear of online scams on Cyber Monday and everyday:

Use a credit card instead of debit card

For starters, credit cards offer more consumer protections than debit cards, and the money doesn’t come straight out of your checking account. (It can take days for a bank to reimburse stolen funds, putting you at risk of overdrafts and bounced checks.)

Even better: Opt for a virtual credit card for an added layer of protection, according to Steven Andres, a management information systems lecturer at San Diego State University.

Apple Pay is one of the best payment methods since it sends a temporary one-time credit card number to the vendor, he said, making it a highly secure way to fight fraud.

Be on high alert for phishing attacks

Stay away from any online promotions via email, text or social media. “Those deals may look like a steal, but they could be a trap for fraudsters to do just that — steal your data and cash,” Levin said.

It’s always safer to enter the URL of a store yourself than to click on a link or attachment, he advised.

Beware of clone websites

To that end, look for “HTTPS” at the beginning of an official retailer’s URL; for example, https://www. and not http://www.

There should also be a closed padlock icon in the address window on the payment page when you check out, said Elad Shapira, a cybersecurity expert and head of research at Panorays — that indicates that the transaction is secure.

Better yet: Shapira recommends shopping through a retailer’s app since apps are less likely to be compromised, making them safer for consumer purchases.

Don’t browse with public Wi-Fi

Free Wi-Fi seems convenient, but hackers can also use it to intercept your internet communications.

Avoid using a public, unsecured network, such as at a cafe or store, especially for sensitive transactions, advised Davis Park, director of technology outreach program Front Porch Center for Innovation and Wellbeing.

Use your personal Wi-Fi hotspot or the network connection on your smartphone instead.

Don’t overshare

Be particularly wary of any request to provide information such as your date of birth, Social Security number, bank account or even your spouse’s name.

The same goes for the information you make available online through social media. Keeping up with distant friends and family is great but “don’t give hackers a digital key to hijack your life,” Levin said.

Secure your mobile device

Make sure have the most up-to-date anti-virus software and that you are using a PIN to lock your phone. In addition, use long and strong passwords that don’t repeat across accounts.

Park recommends 12 to 15 characters with strategically placed special characters or symbols. To help keep track of them all, use a password manager, such as 1Password, Dashlane or KeePass.

Check your credit

Check your accounts regularly for any suspicious activity or unauthorized charges and set up notifications, through your bank or a banking app, which will track your credit card transactions and alert you of account activity.


These are the most beaten-up stocks right now that are overdue for a bounce, statistics show

Nvidia co-founder and CEO Jensen Huang attends an event during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.

Tyrone Siu | Reuters
Nvidia co-founder and CEO Jensen Huang attends an event during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.

Several large and popular U.S. stocks are due for an “oversold bounce” after falling rapidly to chart levels that in the past have marked a turnaround.

CNBC used hedge fund analytics tool Kensho to determine which large U.S. stocks have fallen the most from their 200-day moving average, one of the most popular technical indicators used by investors to analyze price trends. We then searched that group for stocks that have a history of posting positive gains one month after reaching that statistically oversold position.

Morgan Stanley's downgrade of US stocks is late in the game, says Warren Financial Service CIO

Morgan Stanley’s downgrade of US stocks is late in the game, says Warren Financial Service CIO   17 Hours Ago | 03:40

The metric, the average price of the last 200 days, is often considered a barometer of whether securities are in a healthy long-term trend. But a big swing below the 200-day moving average can also suggest that a bounce is coming.

Swoons in shares of Nvidia, General Electric and Celgene, for instance, have preceded sharp moves higher in the past. With each of those stocks more than 2.5 standard deviations below their 200-day moving average, history predicts them rallying 30.6 percent, 17.3 percent, and 10.4 percent, respectively, over the next 22 trading days, or one month.

Nvidia, General Electric and Celgene are down 48 percent, 32 percent and 25 percent, respectively, since the start of October and the fourth fiscal quarter of 2018. Those stocks have tracked a broader sell-off in the U.S. equity market; the S&P 500 is down 9.6 percent this quarter and negative so far this year


This simple year-end stock-picking strategy tends to beat the market



Dead heat horse race

Getty Images

Investors looking for a year-end strategy may want to consider some beaten-down sectors.

Historically, those that have lagged the broader market in first 11 months of a year tend to turn around in the subsequent trading year, according to analysis from Jefferies.

“Lagging groups in one year do not tend to lag in the next,” Jefferies equity strategist Steven DeSanctis wrote in a note to clients Monday.

Looking back to 1990, the firm found that the six worst-performing industry groups from January through November have tended to outperform by 92 basis points in December through May.

It’s “not a huge number, but at least the bleeding tends to stop,” DeSanctis said.

Individual names in underperforming sector groups that fit that strategy this year include Broadcom, Ford Motors, KeyCorp, NXP, Invesco, General Mills and Commercial Metal, all of which Jefferies has a “buy” rating on.

DeSanctis pointed to a few macro events that set the stage for new leaders in the market — Democrats won control of the House of Representatives, U.S. crude oil is giving up year-to-date gains, 10-year yields are rising, and value stocks have been outperforming.

“All these changes come at a time of year when investors are looking for rotation candidates,” DeSanctis said. “This makes some of the lagging groups that had been on the wrong side of the above trends worthy of further examination.”

High-growth tech stocks had been a favorite for investors during the historic bull market. But in the past month, they have been pouring into defensive groups, which tend to provide a stable dividend regardless of stock market conditions. There also seems to be more interest in cyclicals such as autos, housing, banks and materials stocks as investors “seek value in equities that have been discounting a slowdown, are less crowded, or for which things are arguably getting less bad,” DeSanctis said.

U.S. stocks closed more than 300 points higher on Monday, helped by a rise in those beaten-down tech stocks that saw steep losses last week.


Cramer: ‘I have tremendous contempt for this market’ — it’s a bear market not a correction

Bear market is mauling stocks, says Jim Cramer

U.S. stocks are in a “bear market” not a correction, CNBC’s Jim Cramer argued on Monday.

Cramer said on “Squawk Box” he’s not using the traditional measures of a bear market and a correction to make his case. “Who cares about the S&P? It’s individual stocks that are down 40 or 50 percent.”

A bear market is generally defined as an asset or index decline of 20 percent or more from recent highs. The threshold for a correction is measured as a drop of 10 percent or more from recent highs.

“I have tremendous contempt for this market, because every time you try to make money with it, it cuts your heart out. That’s a bear market. People don’t want to call it a bear market. But what do they need?” Cramer asked, rhetorically.

“It’s a bear market rally,” he said. “You go down really hard last week. And then you come in on Monday and it’s up a lot. People come in. They buy it and lose money.”

After tanking nearly 3.8 percent last week, the S&P 500 recovered nearly a third of that decline shortly after Monday’s open on Wall Street, lifting the index out of correction territory. The Dow Jones Industrial Average bounced more than 300 points, or nearly 1.5 percent, distancing blue-chips further away from a correction. The Nasdaq, despite similar gains, remained in a correction by a few percent.

“People come in at 250 [points higher] and get their heads cut off. I just feel ashamed,” said Cramer. “It’s very hard to be very positive about the market unless you’re an idiot. Let it go up for three or four days and then sell some.”

Cramer reiterated that he’s been bearish on stocks since Federal Reserve Chairman Jerome Powell said early last month that interest rates were a long way from neutral. Powell’s remarks touched off a market rout on concerns that central bankers will increase rates aggressively next year. Cramer has been calling on Powell to pause rate hikes, arguing the economy is weakening and inflation is not a problem.

In fact, Cramer warned last week that investors should sell their stocks if they think the Fed, as expected, will raise rates in December. The Fed already increased rates three times this year. After its most recent hike, in September, the Fed projected three rate increases in 2019.


The stock market usually bounces from Thanksgiving to Christmas

Traders on the floor of the New York Stock Exchange.

Brendan McDermid | Reuters
Traders on the floor of the New York Stock Exchange.

Morgan Stanley’s equity strategist who foresaw the recent sell-off in U.S. stocks sees a lackluster year ahead, marred by underwhelming corporate earnings and tougher financial conditions.

Mike Wilson, chief equity strategist at Morgan Stanley, said in a note that he “sees more of the same” stagnant performance from the major indexes in 2019 and forecasts the S&P 500 finishes next year at 2,750, just 3 percent above current levels. His 2019 target is the equivalent to his 2018 target, implying no growth over 12 months.

“After a roller coaster ride in 2018 driven by tighter financial conditions and peaking growth, we expect another range-bound year driven by disappointing earnings and a Fed that pauses,” Wilson wrote in a note to clients Monday. “We think there is a greater than 50 percent chance we experience a modest earnings recession in 2019 defined as two quarters of negative year-over-year growth for S&P 500 EPS.”

Wilson has repeatedly warned of dismal results in equities this year and said the market could be paralyzed in a “rolling bear market” for the next several years with the S&P 500 trading in a range of 2,400 to 3,000. The strategist was the most bullish in 2017, when the market posted a strong rally; he has called for flat performance throughout 2018 and has been validated through Friday’s close.

The S&P 500 finished 2017 at 2,673.61, within 30 points of Wilson’s 2,700 target; the index is down 0.15 percent in 2018.

Wilson said a contraction in earnings growth shapes much of his view on the year ahead.

“The recent strong run of growth we have seen in earnings may have lulled the market into complacency on the forward outlook, but with decelerating topline and building cost pressures, we are highly confident that earnings growth will be below consensus expectations next year and believe there is elevated risk of an outright earnings recession,” he wrote.

Among the several reasons Wilson cited as reasons to expect a slowdown in earnings growth is decelerating gross domestic product growth as the effects of President Donald Trump’s tax cuts wear off and interest rates continue their upward climb. Morgan Stanley’s economists forecast real fourth-quarter GDP growth slowing from 3.1 percent in 2018 to 1.7 percent in 2019 on a year-over-year basis.

Such a large deceleration in U.S. GDP will ripple throughout the economy and weigh on corporate sales growth, the biggest contributor to earnings growth, Wilson said.