Earlier this year, Twitter started putting some of its users in “time-out” as one of the company’s new measures designed to curb abusive behavior. As spelled out in an email sent to those placed in time- out, Twitter said that “creating a safer environment for people to freely express themselves is critical to the Twitter community.” The email then went on to explain the infraction and the duration of the time-out.

Recently, Twitter gave InforWars’ Alex Jones a weeklong time-out and suggested that additional restrictions to combat the “spread of fake news, misinformation and hate speech” might be on the way. As a publicly traded company, a good question is “what might this mean for Twitter shareholders?”

History of Twitter

Twitter was created in March of 2006 and launched in July of that year. Current CEO Jack Dorsey published the first Twitter message at 9:50 p.m. Pacific Time that read: “just setting up my twttr.”

Dorsey has explained the origin of the “Twitter” title: as follows:

“we came across the word ‘twitter’, and it was just perfect. The definition was ‘a short burst of inconsequential information,’ and ‘chirps from birds’. And that’s exactly what the product was.”

In September of 2013, Twitter announced that it had filed papers in advance of an Initial Public Offering and less than two months later, Twitter shares opened at $26.00/share and closed at $44.90, giving Twitter a valuation of approximately $31 billion.

Fast forward to the summer of 2018, Twitter is trading in the $32 range with a valuation of approximately $24 billion.

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Stocks prices continued moving higher last week as if to say a somewhat disappointing July jobs report and ongoing trade-related tensions between the U.S. and China are not a serious threat, yet. The Dow Jones Industrial Average and the S&P 500 both climbed 0.5%, while the Nasdaq Composite inched up 0.1%. Second-quarter earnings were mostly above expectations and provided much of the direction for the week. The biggest market story, however, was the sharp rebound in tech stocks following a selloff the prior week. The momentum pushed Apple’s market capitalization to an unprecedented $1 trillion.

Friday’s jobs (non-farm) report showed that the U.S. economy generated 157,000 positions in July, well below the consensus forecast of 190,000. Moreover, the latest numbers are significantly lower than the six-month average of 219,000. The unemployment rate also ticked lower, to 3.9%, while wage growth held steady at a 2.7% annual rate. Looking under the hood, jobs were most plentiful in manufacturing, healthcare, and professional and business services. Overall, the headline jobs number, while weaker than in recent months, appears reasonable at this stage of the economic cycle. As the Federal Reserve meets this week in Jackson Hole, we are anticipating plenty of discussion about the economy’s potential for employment growth. We also expect two more rate hikes in 2018.

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The Tax Cuts and Jobs Act, characterized as the first major reform of the Internal Revenue Code in 31 years, brings a lot of changes to individuals and businesses alike.

The legislation slashes the top corporate tax rate to 21 percent, lowers the top marginal rate for individual taxpayers to 37 percent, eliminates or scales back several popular deductions, reduces taxes on business income earned by pass-through businesses, doubles the estate tax exemption, and substantially enhances immediate expensing of capital investments.

It also impacts how families save for college—especially with respect to 529 plans. But there are some details still being worked out. Let’s explore.

529 Plans
Designed to promote saving for future college costs, a 529 plan is a tax-advantaged savings plan authorized by Section 529 of the Internal Revenue Code. Sponsored by every state and the District of Columbia, there are two types of 529 plans: Prepaid Tuition Plans and College Savings Plans.

In simple terms, a Prepaid Tuition Plan allows you to effectively lock-in tuition costs to avoid tuition inflation; whereas, a College Savings Plan is a tax-advantaged investment account.

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Last week brought modest gains for stocks and volume was underwhelming.  The Dow Jones Industrial Average rose 0.4% and the S&P 500 increased 0.1%, while the Nasdaq Composite was flat. Trade-war concerns surfaced again mid-week, as the Trump administration issued a new list of tariffs on $200 billion of Chinese goods, but the market was largely in rally mode ahead of second-quarter earnings. The Dow climbed 2.3%, the Nasdaq was up 1.8%, and the S&P 500 increased 1.5%.  Year-to-date, the S&P 500 is up 4.8% and the Dow has also turned positive with a 1.2% rise.

The 10-year Treasury yield ended Friday at 2.83% and remains range bound.  Last week’s economic news was mixed and included a modest decline in the small business confidence index for June from May’s strong reading.  Finding qualified workers appears to be the culprit for lower optimism.  The consumer price index moved higher by 0.1% in June and is now at 2.9% over the past year.  Medical care and autos were among the largest gainers while housing costs were flat and energy prices moved lower.  The takeaway, however, is that the inflation is running warmer than the Fed would like and it has justification to pursue its continuing rate hike campaign.

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On July 4, 1776, the Second Continental Congress formally adopted the United States Declaration of Independence. The American Revolutionary War, which began in 1775, continued until 1783 when the British Empire abandoned their claim to the United States. Like the war, the American flag took many years to become what flies so proudly today. Here are some parts of that journey:

  • During the Second Continental Congress in Philadelphia on June 14, 1777, the following resolution was adopted:

Resolved, that the flag of the United States be thirteen stripes, alternate red and white; that the union be thirteen stars, white in a blue field representing a new constellation.

The resolution was vague on instructions such as how the stars should be arranged and how many points the stars should have. This caused flags to be created differently across the 13 states with some flags scattering the stars without any specific design and others arranging the stars in rows or circles. The stars were also not consistent as some had six points and others had eight.

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These days you’re probably thinking about the beach, the mountains, or a road trip with the family. But summer, when life may be a little slower and your mind a little less cluttered, is actually a good time to do a quick midyear financial reality check.

A midyear checkup can accomplish several things. You can stop and think about your financial goals, such as saving for retirement, a house, a child’s education, or a financial cushion, and then make sure that you are investing appropriately for those goals. And while you are looking at your accounts, take care of “housekeeping” items too, like checking beneficiaries, which isn’t complicated but can have serious consequences if neglected.

Here are 5 things to do in a midyear review:

  1. Review your financial goals
  2. Check your investemnets
  3. Get a tax break
  4. Protect what’s yours
  5. Review important paperwork

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Fidelity Viewpoints

Stocks spent much of Friday in recovery mode following weakness on global trade concerns as President Trump said he would impose tariffs up to $50 billion on goods from China.  According to officials in Washington, China’s theft of intellectual property and technology and other unfair trade practices reignited Trump’s promise to inflict heavy tariffs.  Markets opened deep in the red on Monday amid lingering trade tensions between the two largest economies in the world.

The long-term effect of tariffs is nebulous and full of speculation.  On the other hand, Treasury bond yields are presenting a compelling case as they rose sharply in recent weeks on stronger-than-expected U.S. economic data.  In contrast, corporate bond yields have not risen as fast — so spreads between corporate and Treasury bond yields have narrowed.  The spread between AAA-rated corporate bonds and 10-year government bonds in May was 102 basis points, well below the 35-year average of 123 bps.  The gap between the government 10-year bond yield and a BAA-rated bond in May was 185 basis points, also below the historical average spread of 233 bps.  These spreads help us gauge the bond market’s view of corporate financial strength.  Based on this premise, corporate balance sheets look solid, but corporate bonds are not as favorable to investors.  From an investment standpoint, we are favoring inflation-protected securities and shorter-duration Treasuries.

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See below 3 ways that may help married couples boost their lifetime benefits:

  • A couple with similar incomes and ages may want to consider maximizing lifetime benefits by both delaying their claim.
  • For couples with big differences in earnings, consider claiming the spousal benefit which may be better than claiming your own.
  • A couple with shorter life expectancies may want to consider claiming earlier.

Married couples may have some advantages when deciding how and when to claim Social Security. Even though the basic rules apply to everyone, a couple has more options than a single person because each member of a couple can claim at different dates, and may be eligible for spousal benefits.

Making the most of Social Security requires some strategy to take advantage of the basic benefit rules, however. After you reach age 62, for every year you postpone taking Social Security (up to age 70), you could receive up to 8% more in future monthly payments. (Once you reach age 70, increases stop, so there is no benefit to waiting past age 70.) Members of a couple may also have the option of claiming benefits based on their own work record, or 50% of their spouse’s benefit. For couples with big differences in earnings, claiming the spousal benefit may be better than claiming your own.

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Fidelity Viewpoints

Maybe your charitable donations should stay in your zip code?

For many of us, buying locally matters. We’ve all heard the term and seen the signs: Shop Locally. Eat Locally. But let’s extend that thought for a minute: do you consider giving to your local charities?

The fact is we are bombarded with requests from worthwhile charitable causes. Many of these are well- known national or international organizations with sophisticated fund-raising efforts. Amid their appeals, requests from local charities may be easy to overlook. Yet many small organizations do a great deal of good in their hometowns.

Before you decide whether giving locally or nationally is a better option for your charitable donations, here are a few things to consider:

  1. No matter whether an organization is local or international, always check to see how much of the money it raises goes to administrative costs and how much actually reaches the people or causes the charity serves. Most charities have websites where this information is readily
  2. What kind of giving matters most to you? If you want to support the arts, chances are that a local organization, like your community theater or concert association will make great use of your funds. If you’d rather support agencies that help with natural disasters, an international organization is probably the most effective place for your money.

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Every week brings new developments that grab the attention of investors. Political and economic developments dominated headlines last week, and, in general, most investors focused on the positives. President Trump announced our withdrawal from the Iranian nuclear accord and renewed sanctions on that country’s oil exports, sending oil prices to their highest levels in 3 years. Crude has remained in a solid uptrend, supported by rising global demand, adherence by OPEC countries to production cuts, and trouble with Venezuelan exports.  It is plausible that we have returned to the risk-on trade and volatility has retreated, for now.  The S&P 500 Index jumped 2.5% for the week with energy, financials, technology and industrials all climbing more than 3%.

Interest rates are also making headlines as the 10-year Treasury yield ended Friday at 2.97% and climbed above 3.00% on Monday.  Rising interest rates suggest inflation but Thursday’s consumer price index came in below-consensus for April and likely alleviated fears of inflation concerns.  This was one more catalyst for the recent stock rally.  Markets have been sensitive to inflation readings while looking for direction on whether the Fed is likely to raise interest rates two or three more times in 2018.  In spite of a slower than expected first quarter, we are anticipating a total of three interest rate increases during the current year.  Supporting our thesis, the Atlanta Fed sees real GDP rising to 4% over the next few months.   Inflation moved higher in the first quarter, but remains at a level that should not impede growth.  Finally, Fed balance-sheet tightening is expected to accelerate later this year; unwinding the Fed’s bond supply began at just $10 billion per month in (2017) with plans to reach $50 billion per month by late 2018.

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