MarketMinder Daily Commentary

Providing succinct, entertaining and savvy thinking on global capital markets. Our goal is to provide discerning investors the most essential information and commentary to stay in tune with what's happening in the markets, while providing unique perspectives on essential financial issues. And just as important, Fisher Investments MarketMinder aims to help investors discern between useful information and potentially misleading hype.

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Tory Leadership Hopefuls ‘Already Lobbying’ to Replace Sunak

By Kiran Stacey and Rowena Mason, The Guardian, 6/14/2024

MarketMinder’s View: Here we bring you the latest twist in the UK’s general election campaign, which suggests the Conservatives are in a bit of a struggle ahead of the July 4 vote. Before going further, we remind you MarketMinder favors no party nor any politician, assessing politics solely for their impact on markets and the economy. The latest news? After a poll emerged showing the current majority Conservative party polling third—behind not only Labour, but the upstart Reform UK party—the cracks that have long hampered the Tories re-emerged. This article documents those twists, as it appears some Tory candidates have already started to jockey for party leadership … three weeks before the vote! Now, this doesn’t appear to be a major vote of confidence, and it is looking likely Labour will win. But, as we have written, UK stocks have performed well (and poorly) under both parties. So whether you fear or cheer Labour’s possible victory—which still isn’t set in stone, mind you—there is little reason to see it as a gamechanger for markets.


A Surging IRS Penalty Is Costing Americans Billions. Here’s How to Avoid It.

By Laura Saunders, The Wall Street Journal, 6/14/2024

MarketMinder’s View: This is an important reminder for the many retirees who pay quarterly estimated taxes: Make sure you document income well throughout the year and file quarterly taxes appropriately based on when you received it. Not doing so can mean exposing yourself to late-payment penalties, which have surged in the last two years. “Filers who don’t pay in enough tax throughout the year owe a penalty in the form of an interest charge on their underpayment that’s set quarterly. In 2021, the year that prompted most of the 2022 assessments, the IRS’s rate on underpayments was a rock-bottom 3%. The penalty is based on the short-term Treasury rate plus three points, and it climbed to 6% as rates rose in 2022. That pushed up charges on underpayments assessed the next year. In 2023 the rate rose to 8% for the fourth quarter. It’s still there–so underpayment penalties will continue to sting taxpayers who owe them.” If this applies to you, make sure you consult your tax professional, and you might consider using withholding on things like IRA withdrawals, as the article details. Such tactics can help prevent you from receiving an unpleasant surprise in the form of a higher tax bill.


First a Victim of Tax Return Identity Theft, Then a 2-Year Wait for a Refund

By Ann Carrns, The New York Times, 6/14/2024

MarketMinder’s View: The beginning of this details the fact that victims of tax-return fraud have to go through a lengthy and painful process to get the refund they are due, which averages 22 months. To us, this is basically non-news. We mean, if you expected fast service from the IRS, we don’t know what to tell you. But the latter part—on how to prevent tax-return fraud—has some useful tips! “Both [IRS Taxpayer Advocate Service head Erin M.] Collins and [National Association of Tax Professionals Director of Tax Content tom] O’Saben recommended applying to the I.R.S. for an ‘identity protection pin,’ or IP pin, a six-digit number that blocks someone from filing a tax return using your Social Security number. (If the return doesn’t have the filer’s pin number on it, the I.R.S. won’t accept it.) Originally, the pins were reserved for victims of identity theft, but anyone can now request one as a preventive step. Once you have a number, the I.R.S. issues you a new one each year.” It goes on to counsel you to file early in the season, as this reduces the odds a fraudster files first. (If they file second, it would get rejected by the IRS.) You can also freeze your credit report, which we think is a wise counter-fraud measure. That won’t necessarily help with tax-filing fraud directly, but it can limit access to the information a fraudster needs to do so later.


Tory Leadership Hopefuls ‘Already Lobbying’ to Replace Sunak

By Kiran Stacey and Rowena Mason, The Guardian, 6/14/2024

MarketMinder’s View: Here we bring you the latest twist in the UK’s general election campaign, which suggests the Conservatives are in a bit of a struggle ahead of the July 4 vote. Before going further, we remind you MarketMinder favors no party nor any politician, assessing politics solely for their impact on markets and the economy. The latest news? After a poll emerged showing the current majority Conservative party polling third—behind not only Labour, but the upstart Reform UK party—the cracks that have long hampered the Tories re-emerged. This article documents those twists, as it appears some Tory candidates have already started to jockey for party leadership … three weeks before the vote! Now, this doesn’t appear to be a major vote of confidence, and it is looking likely Labour will win. But, as we have written, UK stocks have performed well (and poorly) under both parties. So whether you fear or cheer Labour’s possible victory—which still isn’t set in stone, mind you—there is little reason to see it as a gamechanger for markets.


A Surging IRS Penalty Is Costing Americans Billions. Here’s How to Avoid It.

By Laura Saunders, The Wall Street Journal, 6/14/2024

MarketMinder’s View: This is an important reminder for the many retirees who pay quarterly estimated taxes: Make sure you document income well throughout the year and file quarterly taxes appropriately based on when you received it. Not doing so can mean exposing yourself to late-payment penalties, which have surged in the last two years. “Filers who don’t pay in enough tax throughout the year owe a penalty in the form of an interest charge on their underpayment that’s set quarterly. In 2021, the year that prompted most of the 2022 assessments, the IRS’s rate on underpayments was a rock-bottom 3%. The penalty is based on the short-term Treasury rate plus three points, and it climbed to 6% as rates rose in 2022. That pushed up charges on underpayments assessed the next year. In 2023 the rate rose to 8% for the fourth quarter. It’s still there–so underpayment penalties will continue to sting taxpayers who owe them.” If this applies to you, make sure you consult your tax professional, and you might consider using withholding on things like IRA withdrawals, as the article details. Such tactics can help prevent you from receiving an unpleasant surprise in the form of a higher tax bill.


First a Victim of Tax Return Identity Theft, Then a 2-Year Wait for a Refund

By Ann Carrns, The New York Times, 6/14/2024

MarketMinder’s View: The beginning of this details the fact that victims of tax-return fraud have to go through a lengthy and painful process to get the refund they are due, which averages 22 months. To us, this is basically non-news. We mean, if you expected fast service from the IRS, we don’t know what to tell you. But the latter part—on how to prevent tax-return fraud—has some useful tips! “Both [IRS Taxpayer Advocate Service head Erin M.] Collins and [National Association of Tax Professionals Director of Tax Content tom] O’Saben recommended applying to the I.R.S. for an ‘identity protection pin,’ or IP pin, a six-digit number that blocks someone from filing a tax return using your Social Security number. (If the return doesn’t have the filer’s pin number on it, the I.R.S. won’t accept it.) Originally, the pins were reserved for victims of identity theft, but anyone can now request one as a preventive step. Once you have a number, the I.R.S. issues you a new one each year.” It goes on to counsel you to file early in the season, as this reduces the odds a fraudster files first. (If they file second, it would get rejected by the IRS.) You can also freeze your credit report, which we think is a wise counter-fraud measure. That won’t necessarily help with tax-filing fraud directly, but it can limit access to the information a fraudster needs to do so later.