Week of April 7, 2025

Key Points for the Week

• The S&P 500 started the week with three positive days, but it ended the week with one of the largest two-day selloffs in history.
• Sparking the record weakness was a negative reaction to the announced tariffs, along with retaliation from China on Friday.
• The Trump administration went with bigger tariffs than most expected.
• The best defense remains a diversified portfolio, which can help investors avoid making some of the costly mistakes often seen during periods of market volatility.

Current Trends & News is a weekly financial recap curated by SPC Financial®’s team of wealth management and tax-integrated advisors.* We monitor and explore the intricacies of the financial world and share insights into market developments.

Economic Update

A sharp escalation in trade tensions sparked a stock market downturn despite news that the United States economy created far more jobs in March than economists had expected, reported Lucia Mutikani of Reuters.

Late Wednesday, President Trump announced tariffs on countries around the world. The tariffs were significantly larger than anticipated, and stock markets immediately moved lower. Over two days, the Standard & Poor’s (S&P) 500 Index lost about $5 trillion in market capitalization, reported Lynn Thomasson of Bloomberg.

“It was the largest decline for stocks listed on major U.S. exchanges since March 16, 2020 (March 2020 was when the COVID-19 outbreak officially became a pandemic), when $3.5 trillion in value was wiped out, according to Dow Jones Market Data,”

Connor Smith, Barron’s

In contrast, government bonds rallied as yields fell. Investors preference for lower risk assets “resulted in rising demand for government debt in the U.S., U.K., Germany, Japan and Australia — which sent yields down across all those countries.”

Vivien Lou Chen, MarketWatch

Three reasons for the stock market downturn

While tariffs were the catalyst for the market downturn, they were not the only reason for the decline. Other contributing factors included:

1. A tsunami of uncertainty. Markets hate uncertainty. The new administration’s tariffs brought a tsunami of uncertainty. Some investors opted for safe havens as they awaited greater clarity around key questions, including:

• Are the tariffs a negotiating tool or a permanent tax?
• How will tariffs affect the outlook for economic growth?
• How will tariffs affect corporate profitability?
• How will other countries respond?

“The scope, speed and magnitude of the Trump administration’s tariff blitz left investors with a lot of questions. But one point came through crystal clear: The post–World War II global world economic order is no longer. That is forcing a reassessment by countries on how to respond and pushing investors to reassess long-held assumptions about profit margins, investments, and inflation.”

Reshma Kapadia, Barron’s

2. High market valuations. Over the past two-plus years, excitement about artificial intelligence, an economic soft landing, pro-business policies, and other factors have helped lift stock prices to extraordinary levels. By many measures, U.S. stocks were expensive, which made them vulnerable to decline, reported Jacob Sonenshine of Barron’s. The imposition of extraordinary tariffs forced investors to reassess expectations for U.S. economic growth, corporate earnings, inflation, and share prices.

“Over the medium to longer term, Trump’s tariff and trade policy will likely accelerate the move to diversify supply chains, emphasize regionalization over globalization, and invest in becoming more self-reliant… But given the uncertainty and increasing costs of inputs, companies may rethink where they allocate long-term capital, tariffs plus associated uncertainties provide more incentives to build around the U.S., not in the U.S.”

Reshma Kapadia, Barron’s

3. The tariff narrative. Narrative economics is a theory developed by Nobel-prize winning economist Robert Shiller. Its premise is that viral stories influence economic behavior.9 As a result, viral narratives can influence markets.

“Whether it is the belief that tech stocks can only go up, that housing prices never fall, or that some firms are too big to fail. Whether true or false, stories like these—transmitted by word of mouth, by the news media, and increasingly by social media—drive the economy by driving our decisions about how and where to invest, how much to spend and save, and more.”

Robert Shiller, Nobel-Prize Winning Economist

Last week, a dominant narrative was that tariffs may cause a trade war, which could have unfavorable and long-lasting effects on the U.S. economy.

“While trade wars do not involve armies and bloodshed, some of the same rules apply—especially when it is a war of choice. Strengths need to be assessed, allies cajoled, goals set, and preparations made. When done right, victory can be reached with relative ease and results in an increase in standing. When poorly planned, strengths turn into weakness, quick victories become battles of attrition, and unintended consequences can last for years.”

Ben Levisohn, Barron’s

By the end of the week, the technology-heavy Nasdaq Composite Index was in bear market territory, down more than 20 percent from its previous high. The Dow Jones Industrial Average had moved into correction territory, and the S&P 500 Index had experienced its worst week since 2020, reported Amalya Dubrovsky, Karen Friar, and Ines Ferré of Yahoo! Finance. Yields on longer maturities of U.S. Treasuries moved lower, pushing the value of previously issued Treasuries higher.

Stock market volatility is likely to continue as the tariff story plays out. While the tariff story plays out, it is a good idea to stay calm and focus on your plan. Your portfolio allocation and diversification strategies were put in place to help you achieve your financial goals. Taking drastic action in response to a short-term market upheaval could affect your ability to reach those goals. If you have questions or would like to discuss recent events, please contact us.

This Week in the Markets

Wednesday afternoon was President Trump’s much-anticipated tariff announcement, branded “Liberation Day.” There is a lot to sort out on the potential impact, but the short-term market reaction has been decidedly negative. It brings up a lot of emotion and a lot of legitimate concerns, but these are also times when it is easy to make costly investing mistakes.

The S&P 500 fell more than 10% on Thursday and Friday, something that last happened in March 2020 and the Great Financial Crisis (GFC) before that. If there is any silver lining to what happened late last week, it is that after previous 10% drops in two days, stocks have done quite well going forward to the tune of never lower one, six, or twelve months later. This brings up an important point. We do not know for certain how far stocks may fall. What we do know is that with every decline, more risk has already been priced in and stock valuations have become cheaper compared to their longer-term earnings potential. That is part of why stocks have usually done well historically after such sharp declines. Could stocks have a more negative forward-looking result than what we have seen historically? Yes, of course, but as stocks fall it becomes less and less likely.

As we have said before, stocks can rally on good news, and even bad news; it is uncertainty they hate. Even though the official tariff rates were announced, it came in higher than anyone expected and added another layer of policy confusion to sort out. That sparked the 4.8% drop on Thursday, followed by a 6.0% collapse on Friday in part due to China retaliating with 34% tariffs on the US. Lost in the shuffle to that news was that China’s new tariffs do not have to be paid for a month (even though they are effective as of April 10), leaving room for negotiations, and China did not devalue the yuan, another clue Beijing is willing to negotiate.

In addition, long-term interest rates declined, lowering the cost of borrowing to home buyers and businesses; and, oil prices fell to below $60 a barrel, lowering energy costs to individuals and businesses. In a sea of negatives, there is some potential good news.

In the end, no one has much clarity over what the future could hold. Howard Marks, Founder of Oaktree Capital, said it best in a Bloomberg interview on Friday, “The world economy and the world order beyond the economy — meaning geopolitics and international relationships — has been shook up like a snow globe by the events of the last days, and nobody knows what it is going to look like. Today, whatever your forecast may be, you have to say the probability that I am right is lower than ever, because the probability that we know what the future is going to look like is lower than ever.”

It is important not to panic. When uncertainty spikes, being diversified can help you sleep at night and although sleeping might not be as easy as it was last year, it sure helps.

As for April so far, markets have definitively passed their judgment on tariffs. From the perspective of tariffs’ potential impact on the earnings outlook and overall economic risk, the Trump administration’s current policy path is not market friendly. That does not mean it is necessarily a bad policy, but it does mean it is a negative policy choice for investors. There are still opportunities to fine tune the policy, and any good news is likely to get a positive market reaction.

Tariffs

Tariffs are here and in a big, big way, much bigger than anyone expected. Part of the reason is that the country-by-country tariff levels shared by President Trump on Wednesday evening were not really “reciprocal tariffs.” That is, they were not trying to level the playing field to create free but fair trade. The calculation of new tariff rates was based on the trade deficit the US has with each country, whatever the actual tariffs other countries charged on US goods. And there are many reasons the US can run a trade deficit with another country when there is, in fact, a level playing field. In fact, this outcome would be expected among capitalist economies.

Here is how the calculations were done. Say a country exports $10 of goods to the US and imports $6 of goods from the US. That is a trade deficit of $4 the US has with the country, or 40% of their exports. Boom! They get charged a 40% “reciprocal” tariff to make things “fair.” (A 40% tariff on their $10 of exports to the US would be $4, although US importers pay the tax.) BUT the administration wants to be seen as lenient, and so they have halved that rate from 40% to 20%. Still, the minimum rate is 10%.

This calculation is why the island of Norfolk (population 2,188 and 1000 miles of the coast of Australia) got slapped with a 29% tariff—they export about $655,000 of goods to the US (mostly leather footwear). Meanwhile, Australia gets slapped with a 10% tariff.

The highest tariff rate imposed on any country is 50%, on goods from the tiny African nation of Lesotho (also one of the poorest). Lesotho imposes a tariff rate on US-made goods that is like other countries in the Southern African Customs Union (SACU). But Lesotho is charged 50%, whereas other members get hit with a lot less, including 30% for South Africa, 21% for Namibia, and 37% for Botswana. That is because Lesotho exported about $237 million of goods to the US in 2024 (mostly diamonds and Levi’s jeans), while they imported only about $7 million worth of products from the US (they cannot really afford to buy a lot of American products). As calculated, that’s (237-7)/237 = 97%, and halving that gets close to 50%.

South Korea, which has a free trade agreement with the US, and near 0% tariffs on US goods, gets hit with a 25% tariff simply because American’s have high demand for Korean-made goods. Meanwhile, serial tariff user, Brazil, just gets 10%.

China gets hit by a 34% tariff under this calculation, but that is above the already announced 20% tariffs on Chinese goods, which means tariffs on China are now at 54%. Then we also have tariffs on autos, steel and aluminum, and upcoming tariffs on things like lumber and pharmaceuticals.

There’s Not Much Room for Negotiation Given US Goals

This bilateral deficit-based tariff calculation is going to make it hard to negotiate with the US. How do you reduce your tariff to zero if it is practically zero already, as in South Korea’s case? You would have to “promise” that the bilateral trade surplus with the US will fall to zero, but how do you do that without completely retooling your economy towards consumption instead of manufacturing?

This is the problem with focusing on bilateral trade. A country may have a surplus with the US but an overall trade deficit. So how does it go about reducing its trade surplus with the US to zero without simultaneously adjusting trade with everyone else? Meanwhile everyone else is trying to do the same thing.

These tariffs are slated to go into effect on April 9th. The administration has also torn up the USMCA (the trade agreement between the US, Canada, and Mexico). President Trump himself touted the USMCA as a great deal back in 2019 (the USMCA replaced NAFTA). That tells other countries there is no certainty that the US sticks to its end of any negotiated deal, which naturally makes other countries reluctant to negotiate.

It also gets to the point that these tariffs have several incompatible goals. On the one hand, the goal is to bring back manufacturing to the US. Let us be clear, this would happen by import substitution, i.e. making foreign goods much more expensive and forcing Americans to buy slightly less expensive US goods (but still more expensive than current prices). Keep in mind that this has major implications for household consumption, especially durable goods (like cars, furniture, appliances, TVs, etc.). The last 30 years, following NAFTA and China’s entry into the WTO in 1999, saw a steady pullback in durable goods prices (the chart shows the personal consumption expenditures index for durable goods). Covid broke that streak, as supply chains cracked, but over the last two years, it was looking like the downtrend in prices resumed. But now, the goal is to willfully break those same supply chains, which means we could be at the end of an era of durable goods deflation.

On the other hand, another stated goal is to raise 100s of billions of dollars of revenue from tariffs (to perhaps pay for tax cuts), but in that case you do not want import substitution and reshoring of manufacturing. Then you have the tech-adjacent folks close to the administration saying these tariffs are meant to be negotiated down so that globalization can happen on a “level playing field,” i.e. zero tariffs everywhere. But that means accepting trade imbalances.

Uncertainty Is Going to Hurt, Whether These Tariffs Are Kept in Place

Ultimately, we have no idea whether these tariffs will be permanent, and that is going to be a problem for businesses.

If you are looking to build a plant to manufacture, say leather footwear in the US (perhaps taking away share from the Norfolk Islands), what if the tariffs are removed a few months from now, or three years from now, and the previously calculated return on investment no longer makes sense? That uncertainty is going to reduce capital investment here in the US. Real private nonresidential investment, i.e. business investment, was already slowing in Q4 2024 before this shock. Companies holding back on new investment is going to be a bigger drag on GDP going forward. Now, we did have a trade war in 2018 – 2019 and did not see a big collapse in business investment but that time had two things going for it: 1) a huge corporate tax cut, and 2) a Federal Reserve that started to reverse tight policy. That is not the case today.

There is also the problem of stranded assets for US companies. What do you do with a foreign plant now? Take the example of Nike, which has 500,000 people working in Vietnam across 155 factories, even as high-value design is done here in the US. Does Nike reshore all their manufacturing facilities, and what do they do with the ones abroad? Moreover, who builds these factories here in the US (we likely do not have enough construction workers), and where do we find half a million workers to manufacture sneakers, if low value-add activity is something desirable to be reshored? Companies will be asking a lot of questions, to which there are not any clear answers.

A Shock That Could Leave the Fed on the Sidelines

The Budget Lab at Yale calculates that the US average tariff rate will rise to 22.5% if these tariffs are implemented, the highest since 1909, even higher than the Smoot-Hawley tariffs signed into law by President Hoover in 1930.

To be clear, this is a massive shock to the economy—akin to a big tax increase on consumers and/or businesses (if they do not pass the increased tariff cost to consumers). We just do not know how large and for how long.

For example, Apple runs about 97% gross margins on its products, and 85-90% of production costs are Asia based. Add a 50% tariff on those products and the gross margins collapses to 5%, which likely explains why Apple shares fell more than 8% on the day after Liberation Day. Of course, Apple could charge consumers more for iPhones, iPads, etc., but that runs the risk that they stop buying altogether.

In fact, a lot of companies in the traditional industrial heartland of America and even the Great Plains may be disproportionately impacted by the tariffs, and retaliatory tariffs. These areas still have a lot of manufacturing that rely on capital goods and intermediate inputs (including being a key part of the auto supply chain). They also rely a lot on exports, including agricultural products, commodities, and even aerospace.

Over the last two years, we have talked about the fact that manufacturing construction in the US has soared since the end of 2020 (by over 130% in inflation-adjusted terms). Ordinarily, we would now be expecting companies to purchase (and import) industrial equipment for these factories, but they are going to get big tariffs slapped on them. In other words, it just got more expensive to build in the United States. The massive tariffs may also paralyze the Fed. Investors expect three to four interest rate cuts this year. You would expect rate cuts in the face of a rising unemployment rate, which will occur if the tariff shock pushes hiring even lower and layoffs really surge as companies retrench. This could happen but the Fed may be paralyzed between a rise in inflation (albeit “transitory”) and reacting to a rising unemployment rate. Right now, investors are estimating a near zero chance of no rate cuts this year. Even if the Fed cuts rates, they would be reacting to a rise in unemployment rate as opposed to taking preemptive action. In other words, they are going to fall even further behind the curve on easing policy (and elevated rates are already hurting housing and manufacturing).

Now, long-term Treasury interest rates have been falling for a couple of months now. Normally that would be a tailwind for areas like housing, via lower mortgage rates, but housing is also going to be buffeted by higher tariffs on inputs into the construction process, including lumber, and rates are falling for the wrong reasons, i.e. because investors expect slower economic growth in the future.

Economists in the administration have also said that the inflationary impact of the tariffs can be muted by a rising dollar, but that assumes that the US economy will continue to outperform the rest of the world and interest rates in the US will stay much higher than elsewhere (attracting flows into US dollar-based assets). But markets are betting the opposite will happen—that growth will collapse, pushing the Fed to cut rates—and so the dollar has fallen, including after the latest tariffs announcement. That is going to make imports even more expensive.

What About Markets, and Portfolios?

With respect to markets in general, everything we have seen policy-wise over the last two decades has been to lower volatility—whether it is the Fed stepping in with QE or rate cuts, or Congress and the White House sending out stimulus checks. (That does not mean they were successful every time, but the goal was to smooth over cracks that were forming in markets or the economy.) Policy right now is actively volatility-inducing. Administration officials have openly talked about “short-term pain” for “long-term gain,” with President Trump himself admitting that a transition period for the economy is likely, and that “you can’t really watch the stock market.”

The risk of a recession over the next 12 months appears to have increased, but things are still very fluid.

All this has implications for portfolio construction and how different parts of the portfolio complement each other. For example, if inflation surprises to the upside over the next few months, the Fed may not cut, and we could see bonds failing to act as a diversifier to stocks, but you do not want to throw out long-term bonds from a portfolio in case a recession materializes, and interest rates plunge. Low volatility stocks are another way to diversify portfolios¬—these are stocks that tend to outperform when markets are volatile.

Another thing to keep in mind is that the current account deficit for the US (which is mostly the trade deficit) is the other side of the capital account surplus, i.e. net inflows of capital into the US. It exactly balances out. Over the last two decades, those inflows of capital have mostly gone into portfolio investment rather than fixed direct investment (FDI), for example US debt (especially Treasuries) and stocks, mostly thanks to the outperformance of these assets over everything else. If the trade deficit disappears, the capital surplus must also disappear as these things have to balance. The ramifications of the tariff announcement go beyond mere trade. It also has implications for flows of capital into various global assets, which could impact differential returns between all these assets.

Diversification has had a tough decade and half, thanks to the US stock market, led by technology-oriented stocks, outperforming by as much as they have, but now may be the time when a really diversified portfolio is crucial. That includes both within equities and actual diversifiers. You likely do not want to concentrate in any single side of the equity market, including just US equities, instead diversifying globally to take advantage of lower correlations between US and international stocks. If the dollar continues to pull back, as other countries reduce trade with the US, that will be a potential tailwind for international stocks. On the diversifiers side, you may want to diversify your diversifiers, across cash, bonds, commodities, managed futures (a trend following strategy that can provide exposure to different types of assets), and even low volatility stocks. Given all the uncertainty, it is hard to say which way the market will go. The good news is that there are myriad ways to create well-diversified portfolio cheaply right now, much more so than 20 years ago, or even 10 years ago.

First Quarter Review

In late January, as the new administration took office, markets anticipated that proposed tariffs would create economic headwinds that could be offset by the positive effects of deregulation (a productivity boost) and tax cuts (economic stimulus), reported Ben Levisohn of Barron’s. By the end of the quarter, market expectations had changed dramatically.

A market rotation

Financial markets experienced a rotation during the first quarter as market expectations shifted. Rotations occur when a dominant trend fades. Typically, investors sell investments that were in favor and buy assets that they believe are better opportunities, reported Sarah Hansen of Morningstar. During the first quarter of 2025, we saw sector, style, and regional rotations.

U.S. technology stocks lost their luster. In the United States, the information technology, communication services, and consumer discretionary sectors – home to the Magnificent Seven – delivered stellar total returns in 2023 and 2024. However, their dominance faded in the first quarter of 2025, while more defensive sectors of the market delivered positive returns.

__Value stocks came into favor. __

“Worries over historically elevated tech stock valuations, combined with a tariff-induced bout of risk avoidance, have driven the recent rotation from growth into value.”

Esha Dey, Bloomberg

The S&P 500 Value Index was up 0.28 percent during the first quarter, while the S&P 500 Growth Index dropped 8.47 percent.

__International stocks outperformed. __

“As the US stock market lost ground in the quarter, international markets surged amid a global shift. Chinese markets gained 14.17 [percent], while eurozone markets rose 12.24 [percent], thanks in part to major fiscal initiatives designed to stimulate growth and enhance the region’s defense capabilities amid the ongoing conflict between Russia and Ukraine.”

Sarah Hansen of Morningstar

Rotations can be healthy.

“Focus on emerging leadership in other sectors demonstrating relative strength.”

Source cited by Ben Levisohn

Manual Refunds for Deceased Taxpayers Delayed

The Treasury Inspector General for Tax Administration (TIGTA) has found that that the IRS took on average 444 calendar days to issue manual refunds for deceased taxpayers.

When a tax return is filed on behalf of a deceased taxpayer, the IRS will systemically issue the refund to the claimant. However, if the IRS cannot systemically refund a deceased taxpayer's overpayment, a Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, or court certified documentation may be required to have the refund issued.

From January 2021 through July 2024, the agency processed some 610,000 manual refunds for deceased taxpayers. In addition to problems with delays, TIGTA found deficiencies in IRS interest-calculation procedures for deceased taxpayers' refunds. Interest on the 610,000 manual refunds issued over the January 2021-July 2024 period totaled $237 million. 47,542 claimants may have been impacted by erroneous interest calculations and received either too much or too little in interest owed.

A Reminder About Scams

Scams usually start with a phone call, email, text, or another form of communication. The person typically claims to be from an agency or organization you know – or one that sounds like it might benefit you, such as the National Sweepstakes Bureau or a lottery.

The person may know your name and address. They may give you their official title or an identification number. No matter how official they seem, you can be confident it is a scam if the person contacting you:

• Indicates there is a problem with your benefits.
• Asks you to pay to receive a prize.
• Suggests that paying will increase the chance of winning.
• Requests financial information, such as a bank account or credit card number.
• Pressures you to act immediately.
• Tells you to pay using a specific method, such as a gift card or cryptocurrency.

If this happens, remember that the Social Security Administration, the Internal Revenue Service, Medicare, and your bank do not call, email, or text to ask for money or personal information. They do not demand that you pay immediately, and they do not accept payment by gift card, prepaid debit card, cryptocurrency, or another untraceable form of money transfer.

When you suspect a scam:

• Hang up or close the message. Do not respond in any way.
• Remain calm.
• Think back over the call. Write down any personal information you may have inadvertently shared.
• Report the scam. Contact the Federal Trade Commission at ReportFraud.ftc.gov. You may also want to report the incident to your state’s attorney general or your local consumer protection agency.
• Share your knowledge. Talk with family, friends, and neighbors about your experience so they know what to look out for.

When you receive a digital message, no matter how official it seems, do not click on any links. Do not give or confirm any personal information, including your name, birth date, phone number, address, email address, place of birth, driver’s license, passport, or Social Security numbers, bank or other account numbers, and PIN numbers.

Being skeptical can keep you safe. Remove yourself from the situation. Do not share information. If you feel anxious and need to confirm that it was a scam, contact the organization using a method provided on their official website.

IRS Urges Taxpayers to Not Fall Prey to “Ghost Tax Preparers”

A common problem seen during tax season, “ghost preparers” pop up to encourage taxpayers to take advantage of tax credits and benefits for which they do not qualify. These preparers can charge a large percentage fee of the refund or even steal the entire tax refund. After the tax return is prepared, these “ghost preparers” can simply disappear, leaving well-meaning taxpayers to deal with the consequences.

While most tax professionals offer quality service, these ghost preparers and other unscrupulous preparers try to take advantage of people and should be avoided at all costs. The IRS encourages people to use a trusted tax professional, and IRS.gov has important information to help people choose a reputable, accredited practitioner.

Warning Signs to Look Out For

Most tax return preparers provide honest, high-quality service. But some may cause harm through fraud, identity theft and other scams. Paid preparers must sign and include a valid preparer tax identification number (PTIN) on every tax return. A ghost preparer is someone who does not sign tax returns they prepare. These unethical tax return preparers should be avoided, especially if they refuse to sign a complete paper tax return or digital form when filing electronically.

Taxpayers are also encouraged to check the tax preparer’s credentials and qualifications to make sure they are capable of assisting with the taxpayer’s needs. The IRS offers resources for taxpayers to educate themselves on types of preparers, representation rights, as well as a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to help choose which tax preparer is the best fit.

Some of the warning signs of a bad preparer include:

• Shady fees. Taxpayers should always ask about service fees. Shady tax preparers can ask for a cash-only payment without providing a receipt. They are also known to base their fees on a percentage of the taxpayer’s refund.
• False income. Untrustworthy tax preparers may also invent false income to try to get their clients more tax credits or claim fake deductions to boost the size of the refund.
• Wrong bank account. Taxpayers should also be wary of a tax preparer attempting to convince them to deposit the taxpayer’s refund in their bank account rather than the taxpayer’s account.

Good preparers ask to see all relevant documents like receipts, records, and tax forms. They also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should never hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is also against IRS e-file rules.

Report Fraudulent Activity and Scams

The IRS highly encourages people to report tax return preparers who deliberately prepare improper returns and any activity that promotes improper and abusive tax schemes.

To report an abusive tax scheme or a tax return preparer, people should use the online Form 14242 – Report Suspected Abusive Tax Promotions or Preparers, or mail or fax a completed Form 14242 and any supporting material to the IRS Lead Development Center in the Office of Promoter Investigations.

Mail: Internal Revenue Service Lead Development Center MS7900 1973 N. Rulon White Blvd. Ogden, UT 84404 Fax: 877-477-9135

Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary award.

Did you Know? This Week in History

April 8, 1974: Hank Aaron Breaks Babe Ruth’s All-Time Home Run Record

On April 8, 1974, Hank Aaron of the Atlanta Braves hit his 715th career home run, breaking Babe Ruth’s legendary record of 714 homers. A crowd of 53,775 people, the largest in the history of Atlanta-Fulton County Stadium, was with Aaron that night to cheer when he hit a 4th inning pitch off the Los Angeles Dodgers’ Al Downing.

Henry Louis Aaron Jr., born in Mobile, Alabama, on February 5, 1934, made his Major League debut in 1954 with the Milwaukee Braves, just seven years after Jackie Robinson broke baseball’s color barrier and became the first African American to play in the majors. Aaron, known as hard working and quiet, was the last Negro league player to also compete in the Major Leagues. In 1957, with characteristically little fanfare, Aaron, who primarily played right field, was named the National League’s Most Valuable Player as the Milwaukee Braves won the pennant. A few weeks later, his three home runs in the World Series helped his team triumph over the heavily favored New York Yankees.

Aaron spent his 23-year big league career with two organizations. He was with the Braves from 1954 to 1974—first in Milwaukee and then in Atlanta, when the franchise moved in 1966—and closed it out with two seasons back in Milwaukee for the Brewers.

Aaron hung up his cleats in 1976 with 755 career home runs—a record that stood until 2007, when it was broken by controversial slugger Barry Bonds (Bonds admitted to using steroids in 2011). Aaron's achievements did not end when his career did, though. He went on to become one of baseball’s first African American executives, with the Atlanta Braves, and a leading spokesperson for minority hiring. Hank Aaron was inducted into the Baseball Hall of Fame in 1982. He died on January 22, 2021, at age 86.

Weekly Focus

*“Freedom is a fragile thing, and it is never more than one generation away from extinction.” *

Ronald Reagan, 40th President of the United States

”Not enough of life makes sense for you to be able to survive it without humor.”

Jerry Seinfeld, Comedian

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The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as "The Dow" is an index used to measure the daily stock price movements of 30 large, publicly owned U.S. companies. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of June 2007, the MSCI ACWI consisted of 48 country indices comprising 23 developed and 25 emerging market country indices. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

The Bloomberg Barclays US Aggregate Bond Index is a market capitalization-weighted index, meaning the securities in the index are weighted according to the market size of each bond type. Most U.S. traded investment grade bonds are represented.

Please note, direct investment in any index is not possible. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

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Sources:

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