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In 26 months, some families who pay no inheritance tax now will face sizeable federal taxes unless Congress intervenes. New families affected would include those with far less wealth.
Consider these moves now to avoid a hit to estates later on.
Making changes to estate plans can be time-consuming, so it’s critical for benefactors to start considering changes as soon as possible.

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The federal estate-tax exemption helps wealthy families avoid or reduce inheritance tax, but the clock is ticking on the size of this advantage.
In 26 months, some families that pay no inheritance tax today face the potential for sizeable federal taxes unless benefactors act. Though few families have enough wealth to be affected, the percentage likely to pay inheritance tax as a result of the lower exemption may more than double.

The current exemption limit is $12.92 million for estates of individuals and $25.84 million for the combined estates of married couples. Congress set this limit, adjusted for inflation, in 2017, doubling the existing exemption.

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However, this legislation included a sunset provision calling for the exemption to revert to pre-2018 exemption amounts on Jan. 1, 2026. Unless Congress intervenes, the exemption will then halve — to less than $7 million for individuals and about $13 million for married couples.
This reduction would expose some estates to federal taxation for the first time in years and others, for the first time ever. About 0.1 to 0.2% of estates of people who died in recent years have been subject to federal tax. Under the scheduled lower exemption, this range could increase to 0.3 to 0.4%.
New families affected would include those with far less wealth.
For example, heirs of estates containing no more than a large home, a vacation home and a few million in liquid assets could owe inheritance tax that they wouldn’t face today. Non-exempt portions of estates are currently subject to a progressive tax that tops out at about 40% on values of $1 million or more.

Do this as soon as possible

Making changes to estate plans can be time-consuming, so it’s critical for benefactors to start considering changes as soon as possible. A common strategy is to trim your estate’s value before Dec. 31, 2025, and then keep it below the exemption limit, if feasible, or as low as possible to minimize tax exposure.
One way to accomplish this is to gift heirs cash or other items of value annually — investment securities, art collections, jewelry, etc.
There’s no tax on annual gifts valued at less than $17,000 per recipient from individuals and $34,000 from married couples. And there’s no limit on the number of recipients.

As this is an annual limit, benefactors can take advantage by making gifts in 2023, 2024 and 2025. This annual gift-tax exclusion limit isn’t changing, so you can continue making these gifts after 2025.
Though gifts above the limit may trigger no tax directly, this additional value would count toward what’s known as your lifetime estate and gift tax exemption — the sum of all non-excluded value that you’ve gifted over your entire life plus the value of your estate when you die.
This running personal total is the IRS’s way of limiting how much taxpayers can legally gift to shield their estates from taxation. As making gifts above the exclusion limit adds to your lifetime exemption total, doing so to reduce the size of your estate may be self-defeating.
Unless you have substantial room in your lifetime exemption, a best practice may be to keep gifts below the $17,000 exclusion limit.

Consider these other moves, too

There are various other ways to pass pieces of your estate along to heirs while you’re still alive, before the current exemption halves. Among them are:

Creating and funding 529 college savings plans for young relatives like grandchildren, grand nephews and nieces. Funds withdrawn from these plans are tax-free when used to pay education expenses for grades K-12 and college. Current rules allow upfront funding with five years of the gift exclusion amount of $17,000 for individuals and $34,000 for married couples. For example, a married couple with 10 grandchildren could start a 529 plan for each grandchild and fund each account initially with up to $170,000. This would assure substantial resources for their grandkids’ educations while reducing the couple’s combined estate by $1.7 million. These gifts wouldn’t count toward the couple’s lifetime exemption because they’re within the exclusion limit.

Creating and funding a spousal lifetime access trust (SLAT) to transfer substantial amounts out of your marital estate to your spouse, who would then have sole control of these assets. Such trusts are irrevocable, which means the terms of the trust, including the beneficiary, can’t be reversed in the event of divorce or separation. So undertaking a SLAT requires a confidence in a marriage. Some couples arrange a SLAT for each spouse, essentially sharing control of their joint assets after moving them out of their combined estate.

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Creating a QTIP—qualified terminable interest property trust. These trusts involve giving away your home to an heir but continuing to live in it for the term of the trust. The value of the home comes out of the estate immediately. At the end of the trust’s term, the house becomes the property of the heir, usually an adult child, so entering into these trusts requires confidence in filial relationships. To get the intended advantage, you must outlive the term of the trust. If you don’t, the house comes back into your estate, defeating the purpose of the QTIP, so your age and health may be considerations.

Transferring life insurance policies out your estate. Owning a policy in your name can automatically make it part of your estate, and a substantial policy can vastly increase your estate’s total value. The solution is to transfer ownership to an heir or, to reduce the heir’s tax liability, to an appropriate form of trust, with that heir as the trust’s beneficiary.

Are you close to the limit?

While getting organized to reduce your estate’s value by making gifts, it’s a good idea to get updated real estate appraisals. Significant increases in property values, common in many parts of the country over the last couple years, may bring your estate’s value closer to the scheduled exemption limit than you might think.
These appraisals would come in handy when selling property to raise cash for gifts, or for funding trusts and 529 plans.

Such moves can involve various complexities, so it’s a good idea to consult an estate planner, financial advisor or tax professional knowledgeable about federal tax rules and estate taxes in your state.
By planning carefully and working with expert advisors, you’ll be able to make informed choices about how to navigate the scheduled exemption reduction and assure that more of your wealth goes to your loved ones.  
— By Trey Smith, CFP, registered representative, Truist Investment Services, and investment advisor representative, Truist Advisory Services More

Year-end Planning

If you’re itching to save more into your 401(k) for 2023, your plan may have a feature that allows you to bypass the yearly deferral limit.
Only 10% of employees with after-tax 401(k) contributions took advantage of the feature in 2022, according to Vanguard.
But experts say it’s better to max out employee deferrals first to claim your 401(k) match.

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If you’re itching to save more into your 401(k) for 2023, your plan may have a feature that allows you to bypass the yearly deferral limit.
For 2023, you can funnel $22,500 into your 401(k), plus an extra $7,500 if you’re 50 or older. But so-called after-tax contributions can exceed those limits. The max 401(k) limit for 2023 is $66,000, including employee deferrals, after-tax contributions, company matches, profit sharing and other deposits.  

After-tax contributions are a “no-brainer” if you make enough to comfortably save beyond the 401(k) employee deferral limit, said certified financial planner Dan Galli, owner of Daniel J. Galli & Associates in Norwell, Massachusetts.

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However, only 10% of employees with after-tax deferrals took advantage of the feature in 2022, and those who contributed typically had higher incomes and longer job tenure, according to Vanguard’s 2023 How America Saves report.
“There are many advantages — unless you need the money between now and retirement,” Galli said.
Still, many 401(k) plans don’t offer after-tax contributions due to plan design restrictions, he said. Indeed, only 22% of plans provided the option in 2022, according to the same Vanguard report.

Max out 401(k) deferrals first

Before taking advantage of after-tax contributions, you’ll want to max out pretax or Roth deferrals to capture your employer match, said CFP Ashton Lawrence, director at Mariner Wealth Advisors in Greenville, South Carolina.

“Then we can have a conversation about where your next contribution dollars will go,” he said. “For some people, after-tax contributions may not be appropriate.”  
Typically, advisors use a “holistic approach” when deciding where to allocate funds, including the client’s goals, timeline and other factors, Lawrence said.

Move the funds to ‘avoid taxation’ on growth

After-tax and Roth contributions are similar because both start with after-tax deposits. However, while Roth contributions grow tax-free, after-tax deposits grow tax-deferred, meaning you’ll owe income taxes upon withdrawal.
With that in mind, once you make after-tax 401(k) contributions, it’s important to periodically convert those funds to a Roth account to kickstart tax-free growth.
“It’s widely assumed that Roth conversions are always done in Roth individual retirement accounts,” Galli said. But you might use in-plan conversions to move the funds to your Roth 401(k) rather than an IRA, which may provide cheaper investment options and certain protections. 

By doing this right, you can essentially avoid taxation on all growth, and that’s where the magic is.

owner of Daniel J. Galli & Associates

Upon conversion, you’ll owe levies on after-tax contribution growth, which is why Galli suggests converting the funds to Roth accounts at least quarterly. “By doing this right, you can essentially avoid taxation on all growth,” he said. “And that’s where the magic is.”Don’t miss these CNBC PRO stories: More

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Whether you’re at a restaurant, coffee shop or are using an app on your iPhone, you’re being asked to tip just about everywhere these days and for just about everything.
It’s one thing to choose not to tip the worker at the cash register of a toy shop or clothing store, places where workers aren’t typically considered tipped workers, but when you’re dining at a restaurant, tipping isn’t really optional.

Tipped workers who are behind those payment tablets are feeling the brunt of tip fatigue. In the second quarter of 2023, tipping at full-service restaurants fell to the lowest level since the start of the Covid-19 pandemic. 

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That’s particularly painful for workers in the 16 states that adhere to the federal minimum wage for tipped workers. 
Here’s how it works: The federal minimum wage is $7.25 per hour. But if you’re a tipped worker, it’s $2.13 per hour, also referred to as the subminimum wage. The difference between the two, $5.12, is called a tip credit. If a worker doesn’t receive $5.12 an hour in tips, the employer is responsible for paying them that difference — that’s the law.
“Most consumers have no idea that every time you tip in a restaurant in most states, it cuts against the worker’s wage rather than being something on top of the wage,” said Saru Jayaraman, president of advocacy group One Fair Wage.
Watch the video above to learn more. More

Life Changes

Younger workers are more optimistic that they’re on track with retirement goals, according to a recent report.
However, their long-term savings may be falling short.
There is often a disconnect between what people think they need for retirement and how much they are setting aside, according to Douglas Boneparth, a certified financial planner and member of CNBC’s Financial Advisor Council.
Some simple rules of thumb can take too broad of an approach, he says.

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Saving for retirement is one thing, meeting your goals in the golden years is another.
That’s where worry creeps in.

Among older workers, just 34% of baby boomers and 26% of Gen Xers feel like they’re on the right track with their retirement savings, according to a recent Bankrate survey.
Younger workers are more likely to say they are where they need to be. In fact, 45% of Gen Z and millennial workers feel somewhat optimistic.  

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And yet, Gen Z workers are the biggest cohort of non-savers, Bankrate also found. 
The average 401(k) balance among boomers is $220,900, according to the latest data from Fidelity Investments, the nation’s largest provider of 401(k) plans.
Gen Xers have saved $153,300, on average, while millennials have $48,300 in a 401(k). For Gen Z, the average balance is $8,100.

There is often a disconnect between what people think they need for retirement and how much they are setting aside, said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York. 

“There’s a conundrum with expectations versus reality,” he said.

How much Americans think they need for retirement

Overall, Americans expect they will need $1.25 million to retire comfortably, a separate study from Northwestern Mutual found.
However, what $1 million means to one household versus anther comes down to lifestyle expenses, tolerance for risk and other factors, such as social security payments and homeownership, said Boneparth, who is also a member of the CNBC Advisor Council.
Those who feel on track to reach their retirement goals are most likely to working with a financial advisor and have a diversified mix of assets, including stocks and bonds, according to another report from Country Financial.

They are also significantly more likely to have at least $100,000 in a retirement savings account, the report found.

How to figure out your retirement number

There are a few simple rules of thumb, such as saving 10 times your income by retirement age and the so-called 4% rule for retirement income, which suggests that retirees should be able to safely withdraw 4% of their investments (adjusted for inflation) each year in retirement.
However, these guidelines have their flaws, according to Chelsie Moore, director of wealth management at Country Financial.
To get an accurate picture of where you stand, “it’s important to work with a financial advisor to discuss your unique situation and goals to determine the amount you need to save,” Moore said.
“In a world where there are a lot of retirement calculators, we are often taking too broad of an approach,” Boneparth added. More

Year-end Planning

Medicare annual open enrollment lets you shop around for health and prescription drug coverage for the coming year.
Experts say there’s even more reason this year to check whether your current plans provide the best coverage for you.

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Medicare beneficiaries have until Dec. 7 to change their Medicare health and prescription drug coverage for the coming year through annual open enrollment.
This year, there’s even more reason to pay attention, as financial assistance for prescription drug coverage is set to expand starting Jan. 1, according to Meena Seshamani, director of the Center for Medicare at the Centers for Medicare and Medicaid Services.

“It is important for people to check and see if they could be eligible for financial assistance to help pay for premiums, to pay for co-pays,” Seshamani said.

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Starting in 2024, people who face high prescription drug costs will not have to pay anything out of pocket once they hit the catastrophic phase of their benefits, she noted, thanks to new prescription drug legislation.
Notably, Medicare beneficiaries who take insulin currently do not have to pay more than $35 per month for covered prescriptions. They can also access recommended vaccines at no out-of-pocket cost, Seshamani noted.
There are other reasons Medicare beneficiaries should pay attention to the annual enrollment period this year.

“Medicare open enrollment is so important because options change every year, and people’s health needs and their financial situation changes every year,” Seshamani said.

For beneficiaries, this is an opportunity to save.
“You’re never locked in for longer than 12 months,” said Darren Hotton, associate director for community health and benefits at the National Council on Aging, an advocacy group for older Americans.
Here are answers to some top questions to help you navigate Medicare annual open enrollment this year.

What is Medicare annual open enrollment?

Medicare open enrollment is when beneficiaries can shop around for health plans and prescription drug coverage that better meet their needs.
Notably, health and drug plans make changes every year, so experts say it’s wise to revisit your selections to see which plans match your needs when it comes to cost and coverage, as well as the providers and pharmacies that are in network.
Beneficiaries may be able to switch from original Medicare, which is managed by the federal government, to a Medicare Advantage plan that is privately managed, or vice versa. Alternatively, they may switch Medicare Advantage plans, Hotton noted.
Original Medicare includes Medicare Parts A and B. Medicare Part A covers care provided by hospitals, skilled nursing facilities and hospice, as well as some home health care. Medicare Part B covers doctors’ services, outpatient care, medical supplies and preventive services.

You just can’t ever come into Medicare anymore and say, ‘I’m done. I pick something and I’m done,’ because that’s always the wrong thing to do.

Darren Hotton
associate director for community health and benefits at the National Council on Aging

Beneficiaries on original Medicare may choose to add prescription drug coverage by signing up for a Medicare Part D plan, or additional coverage for out-of-pocket costs through Medicare Supplement Insurance, or Medigap.
Alternatively, beneficiaries may choose a private Medicare Advantage Plan, which provides Medicare Parts A and B, and may also include vision, dental, hearing and prescription drug coverage.
“You just can’t ever come into Medicare anymore and say, ‘I’m done. I pick something and I’m done,’ because that’s always the wrong thing to do,” Hotton said.
“You need to decide which option is best for you,” he said.
Start by asking yourself whether you want Medicare with Medicare supplement coverage like your parents had, or whether you want coverage like what an employer might provide, Hotton said.

What should I consider when assessing options?

Much of the decision comes down to coverage and costs. For example, often people will change plans to save on premiums, according to Hotton.
The decision also depends on what you personally need when it comes to your care — the doctors or care networks you prefer, the prescriptions you want covered and the pharmacy where you typically have those filled.
“Even if you’re happy with the plan that you’re in, there could be a better option for you,” Seshamani said.
There may be new choices for you this year, she noted, particularly as the new drug law goes into effect. Moreover, you may be eligible for financial assistance.
“It is very important for everyone to evaluate their options every year, because options change, your health can change and your financial situation can change,” Seshamani said.

Where should I go for advice?

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For the best advice, experts recommend consulting trusted sources.
Beneficiaries may consult directly with the agency through Medicare.gov and 1-800-MEDICARE, Seshamani said.
There’s also local unbiased help available through the State Health Insurance Assistance Program, or SHIP, via ShipHelp.org.
By making an appointment with your local SHIP office, you can have a counselor help identify the best plans for you for the coming year, said Hotton, a former SHIP director for Utah. This may be done in person, over the phone or virtually. The entire process may take just 30 to 40 minutes, he said.

What are red flags to watch out for?

A lot of advertisements pop up during open enrollment season. Unfortunately, that may also include misleading marketing practices, Seshamani said.
It helps to double-check whether your personal providers and prescriptions may be covered under a certain plan, and how they compare with other offerings, via Medicare.gov or your local SHIP office through ShipHelp.org.

What mistakes should I avoid?

When shopping for Medicare coverage, it helps to make sure you are getting the best advice.
Double-check what any advertisements or sales brochures tell you with your own research through Medicare or SHIP.
Also be wary of who you take advice from, Hotton said.

“What you don’t want to do is just jump into a Medicare Advantage plan because your friend says they like it,” Hotton said.
It also helps to double-check whether the coverage you want may be available for less elsewhere, he said.
“You’re paying the premium, you want to make sure you get really good coverage,” Hotton said.

How soon should I act?

Medicare’s enrollment period began Oct. 15. While open enrollment will last until Dec. 7, it helps to act sooner rather than later.
“People should not wait,” Seshamani said.
“If you miss the Dec. 7 deadline, then you have to wait until next open enrollment and you may miss a chance to save money or get better health care for you,” she said. More

Your Money

Although women have made gains in representation at the senior level, advancements are slower at the manager and director levels.
Rather than hitting a glass ceiling, “the ‘broken rung’ is the biggest barrier,” says Rachel Thomas, Lean In’s CEO and co-founder.

Women in corporate America have come a long way in the last decade.
While the overall gender pay gap has not changed much, it has narrowed among top executives. For the first time ever, women CEOs make up more than 10% among Fortune 500 companies.

But CEOs are often recruited from among top leadership and seeing even more women in the C-suite is key to having more women ascend to the highest levels.

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Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

That’s where progress often falls short, according to the annual Women in the Workplace study from Lean In and McKinsey.
“The ‘broken rung’ is the biggest barrier to women’s advancement,” said Rachel Thomas, Lean In’s CEO and co-founder. “Companies are effectively leaving women behind from the very beginning of their careers, and women can never catch up.”

Inequity ‘compounds vastly’ over a career

Although women have made gains in representation at the senior level, advancements are slower at the manager and director levels, the report found.
In fact, the biggest hurdle to advancement begins at the critical first step up to manager, according to Thomas: Only 87 women — and 73 women of color — are promoted for every 100 men.

Largely due to systemic bias, women are prevented from getting the same opportunities to advance, Lean In’s report found.

The glass ceiling is a myth. [Inequity] starts from day one and continues at every juncture.

Stefanie O’Connell Rodriguez
host of the “Money Confidential” podcast

Men end up holding 60% of manager-level positions, while women hold just 40%, and as a result, there are fewer women to promote to director and so on, the report concluded.
“The glass ceiling is a myth,” said Stefanie O’Connell Rodriguez, host of the “Money Confidential” podcast.
There is an inequity that “starts from day one and continues at every juncture — and that compounds vastly over the course of the career,” she added.

Ways to battle gender barriers

Finding people within an organization that will lobby on your behalf is key, according to Laurie Chamberlin, head of LHH Recruitment Solutions, North America, a division of the Adecco Group.
“Women tend to look for mentors and men tend to look for sponsors who will help them negotiate,” she said.  
Mentors play an important role in providing advice and support at work, but they may not influence the person making decisions. That makes a difference, according to Gallup.
A mentor shares knowledge and provides guidance, while a sponsor provides access to opportunities at work and advocates for career advancement.

From a policy standpoint, pay transparency legislation is also important, Rodriguez added.
Overall, salary bands, or the pay ranges organizations establish for specific roles, have already helped level the playing field, according to recent research from job site Ladders.
The idea is that pay transparency will bring about pay equity, or essentially equal pay for work of equal or comparable value, regardless of worker gender, race or other demographic category.
“There’s a long way to go, but it’s still really promising,” Rodriguez said.Don’t miss these CNBC PRO stories: More

Year-end Planning

The annual rate for newly bought Series I bonds could top 5% in November, which is higher than the current 4.3% interest on new purchases through Oct. 31.
With a higher fixed rate possible, I bonds could become more attractive to long-term investors.
But investors with short-term goals have other competitive options for cash, such as high-yield savings, certificates of deposit, Treasury bills and money market funds.

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The annual rate for newly bought Series I bonds could top 5% in November — and there are several things to consider before adding more to your portfolio, experts say.  
November’s rate for new purchases could be higher than the current 4.3% interest on I bonds bought through Oct. 31, leaving some investors wondering about whether to buy more.

“It’s definitely worth it to wait until November” to decide, said Ken Tumin, founder and editor of DepositAccounts.com, which tracks I bonds, among other assets.

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The U.S. Department of the Treasury updates I bond rates every May and November and there are two parts to I bond yields: a variable and fixed portion.
The variable rate adjusts every six months based on inflation and the Treasury can also change the fixed rate or keep it the same. (The fixed rate stays the same for investors after purchase, and the variable rate adjusts every six months based on the investor’s purchase date.)  
Based on inflation, the variable rate in November will likely increase to 3.94% from 3.38%. But the current 0.9% fixed rate could also rise, based on yields from 10-year Treasury inflation-protected securities, or TIPS, according to David Enna, founder of Tipswatch.com, a website that tracks I bond rates and TIPS.

Higher fixed interest could be attractive to longer-term investors, experts say. But they’d need to purchase new I bonds between Nov. 1 and April 30 to score the increased fixed rate.

Other competitive short-term options

While I bonds remain an attractive option for long-term investors, the choice may be harder for shorter-term goals, experts say.
One of the downsides of newly purchased I bonds is you can’t access the money for at least one year and you’ll lose three months’ interest by tapping the money within five years. 
However, there are other competitive options for cash with more liquidity, such as high-yield savings accounts, certificates of deposit, Treasury bills or money market funds.

If you can get the top rate, one-year CDs are a better deal.

Founder and editor of DepositAccounts.com

Currently, the top 1% average for high-yield savings accounts is 4.92%, and the top 1% average for one-year certificates of deposit is 5.72%, as of Oct. 16, according to DepositAccounts.com.
Short-term cash in high-yield savings accounts could outperform I bonds when factoring in the three-month interest penalty, Tumin said. “And if you can get the top rate, one-year CDs are a better deal,” he said.
Meanwhile, one-month to one-year Treasury bills are offering well above 5%, as of Oct. 16, and the biggest money market funds are paying interest in a similar range, according to Crane data. More

Year-end Planning

Early autumn is often the worst time for stocks. The rest of the year can provide a respite, helping investors recover losses. Don’t expect that to happen this year.
The reason why is less about U.S. politics, global strife or high interest rates.
It’s more about what some of the technical data is signaling.

The floor of the New York Stock Exchange.
Spencer Platt | Getty Images

August and September are historically the worst months for stocks. That was the case this year, as the S&P 500 index fell 6.5% over that span.
Much of the time, however, the rest of the year can provide a respite, helping investors to recover losses. Don’t expect that to happen this time around.

This view is not based entirely on restrictive rates, political bickering in Washington, D.C., or a war breaking out in the Middle East — even as none of those things are helpful. It’s more about what some of the technical data is telling us.

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Russell 2000, yield curve spark concerns

For one, the Russell 2000 has been battered since the end of July, having plunged more than 12%. The index is now in the red for the year, a stark contrast to the S&P 500, which remains up by double digits in 2023. (Even that index’s strength is deceiving. More on that later).
The Russell struggling can portend all sorts of bad things for the rest of the market. That’s because its components are small, capital-intensive firms that tend to rely on floating-rate debt to finance their operations.
That makes them ultra-sensitive to changes in interest-rate policy, which, combined with higher labor costs, helps to explain why it has slumped. Eventually, those issues tend to affect businesses of all sizes.
The other concern is the yield curve.

Yes, it’s been inverted for 15 months, and the economy has yet to descend into a recession, prompting some to theorize that this indicator is not the harbinger of doom it once was. But those arguments ignore that, historically, the period from when the yield curve first becomes inverted to when a recession-induced bear market occurs is typically about 19 to 24 months.

Take advantage of cheap stock entry points

This means that investors should plan for the likelihood that the worst is yet to come. Part of that process means keeping some powder dry to take advantage of cheap entry points to deep cyclical stocks sometime near the beginning of 2024.
Possible candidates include Dow, Inc. (NYSE: DOW) and LyondellBasell Industries (NYSE: LYB). Even as much of the market has done well this year, Dow is off by nearly 9%, while LyondellBasell is barely treading water. The rest of 2023 will likely get worse for deep cyclical stocks like this.

Both companies make high volumes of polyethylene. Notably, each enjoys a significant cost advantage over their global competitors in this area, relying on U.S. natural gas for production. The rest of the world uses crude oil, which is far more expensive.
In the past, a good entry point was when their dividend yields reached 6%. After that happened in 2020, Dow gained more than 34% over a four-month period, while LyondellBasell jumped nearly 38% during a roughly 10-month stretch.
Undoubtedly, the severity of the deep-seated technical issues mentioned above has been masked by the resiliency of the S&P 500. However, only a handful of companies have been responsible for the lion’s share of the index’s gains. Indeed, the Invesco S&P 500 Equal Weight ETF is down for the year — by a lot.
Even the recent spike could turn out to be a smokescreen.

On the surface, last week’s labor report supported the soft-landing argument, thanks to solid job gains and weaker-than-anticipated wage growth. But those are lagging indicators.
Bond and equity benchmarks are forward-looking and have, overall, been more bearish recently. If that trend continues, it will be difficult for stocks to hold their current levels until the end of the year.
The good news is that this cycle will end, and another will begin, possibly during the first quarter of 2024. That’s when we could see declines in headline consumer price index data and the potential for some accommodation from the Federal Reserve.
Investors will just have to be patient enough to wait for that time to come.
— By Andrew Graham, founder and managing partner of Jackson Square Capital. More