The Perils of Government Over Spending

This week, CEO Eric Boyce, CFA discusses: 1. estimates heading into 2026 call for 8.7% stock growth off 12-14% earnings growth - estimates are a guide but a by no means an absolute 2. Fed cuts rates for the last time in 2025, what are the implications 3. the nuts and bolts behind the K-shaped economy for consumers, investors, businesses etc. 4. reasons behind recent improvement in trade; downtrend in employment costs 5. international equity outlook positive for 2026, risk appetite higher in all global markets 6. Mag 7 not uniformly beating the broader index; some improvements in breadth 7. yield curve positive, but longer term rates are higher than when the Fed began cutting short term rates. May see more volatility in bonds in 2026 8. commodity trends mixed; crude/distillate stocks lower, implying higher prices ahead

This week, CEO Eric Boyce, CFA discusses: 1. So-called "hard" economic data looking much better than "soft" data, fueling increased confidence, optimism, earnings estimate increases and market outlook for 2026 2. earnings and economic growth expected across global markets, as output remains mostly steady and public market valuations not too far from historical averages 3. US service sector remains in growth territory; production slightly positive, although capacity utilization remains depressed 4. apartment rents down, helping to hold inflation lower; multi-family vacancies rising. Single family transaction cancellations are on the rise. 5. labor market softness illustrated, highlighted by small business contraction 6. investor sentiment higher, leading to more of a "risk-on" environment 7. credit defaults looking better, leading to recompression of credit spreads in the market 8. treasury issuance spiking, which is helping to hold interest rates higher then they would otherwise likely be

This week, CEO Eric Boyce, CFA discusses: 1. 3rd quarter GDP looking close to 4% annualized; retails sales setting up positive 4th quarter 2025 growth scenario 2. probability of rate cut this next month increased based on recent Fed speakers and weaker labor data; regional data is mixed, but overall data has a positive bias 3. sentiment lower overall, and dragged down by lower incomes; creates some ambiguity over first quarter 2026 economic growth prospects 4. house price growth stalling; pending home sales showing some signs of life 5. market breadth discussion - Mag 7 versus the rest of the index; growth versus value, large versus small could be at an inflection point(?) 6. Potential signals from increased insider selling; however, increased foreign investment in US markets 7. yield curve discussion; some of the reason behind gold's rise 8. commodity markets settling down; crude oil futures lower

As 2025 winds down, it’s a great time to review your financial strategy. Many tax-advantaged opportunities expire on December 31, so acting now can put you in a stronger position for 2025. Always consult your CPA or financial advisor before making any changes. 1. Max Out IRA Contributions (Including Backdoor Roths) For 2025, the IRA contribution limit is $7,000 (under 50) or $8,000 (50+). Roth contributions phase out for singles with MAGI $150,000–$165,000 and joint filers $236,000–$246,000. If your income exceeds these limits, a backdoor Roth contribution may be an option. Pre-tax IRA balances can trigger partial taxation under the pro-rata rule. 2. Roth Conversions Move money from a Traditional IRA or pre-tax retirement account into a Roth IRA. Taxes are paid now, but future growth and withdrawals are tax-free. Year-end is ideal if your income is lower, you experienced job changes, or you want to reduce taxes for heirs. Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IR A. 3. Required Minimum Distributions (RMDs) If you are 73 or older, you must take RMDs from most retirement accounts, including Traditional IRAs and 401(k)s. Failing to take an RMD in 2025 results in a 25% excise tax. RMDs are calculated using your prior year-end balance, age, and IRS Life Expectancy Factor. Inherited IRAs also require RMDs, which can be complex—consult an advisor. 4. Tax-Loss Harvesting Selling investments at a loss in taxable accounts can offset gains and reduce taxable income, with up to $3,000 deductible against ordinary income. Current clients: We routinely implement tax-loss harvesting at year-end. Tax-loss harvesting is a strategy of selling securities at a loss to offset a capital gains tax liability. It is typically used to limit the recognition of short-term capital gains, which are normally taxed at higher federal income tax rates than long-term capital gains, though it is also used for long-term capital gains. 5. Charitable Giving, QCDs & DAFs Donations made by December 31 may be deductible if you itemize. If you’re 70½+, a Qualified Charitable Distribution (QCD) can satisfy all or part of an RMD and reduce taxable income. A Donor-Advised Fund (DAF) allows contributions this year with an immediate tax deduction, while you recommend grants over time. Funds grow in the account, offering flexibility for strategic giving. With thoughtful planning, year-end is a chance to reduce taxes, meet retirement obligations, and start 2026 financially prepared. We are available to answer any questions. Happy holidays from all of us at Boyce & Associates Wealth Consulting!

AI-driven gains, a November pullback, and two Fed cuts with core inflation near 3%. 2026 outlook: cautious growth, quality bonds for ballast, tariff/Fed risks.

This week, CEO Eric Boyce, CFA discusses: 1. sales growth heading into holiday shopping season; economic indicators looking at +4% annual economic growth coming out of the 3rd quarter 2. factory orders positive but not "strong"; labor market weakness outside of leisure, hospitality, education and healthcare 3. new home prices now below existing home prices due to inventory shortages, high % of mortgages still below 4%, builder incentives 4. financial conditions "looser"; Philly Fed/Kansas City Fed report softer new orders, but perhaps some optimism on the margin 5. delinquency rates picking up in commercial office, as vacancies continue to rise 6. consumer credit indicators holding somewhat steady, except for credit card delinquencies 7. market correction underway in tech stocks; overall volatility is back on the table (especially for many of the Mag 7 and bitcoin) 8. consumer discretionary outperforming staples; equal weighted S&P 500 at a historic lag to capitalization weights 9. cattle, cotton, cocoa prices in decline. offset by corn, soybeans

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This week, CEO Eric Boyce, CFA discusses: 1. small business and corporate sentiment appears favorable; capital spending trends and expected pricing power looking better 2. some stress in the credit markets, especially student loans; bankruptcies higher 3. evidence of K-shaped economy - healthcare premiums, groceries, lower wage growth 4. global and US valuations are indeed stretched, although this is not your father's S&P 500 - concentration of technology makes some historical comparisons difficult. Most consecutive days of the S&P 500 trading above its 50 day moving average since 2008 5. stocks fueled by liquidity, better than expected earnings performance and higher sustained profit margins 6. volatility still relatively low, but risk of increased volatility is prevalent 7. growth stocks outperforming value, large outperforming small; international returns expected be higher than US looking out 10 years, per Goldman

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