THE WEEK ON WALL STREET
Stocks were mixed during the holiday-shortened trading week as uncertainty over conflict in the Middle East weighed on investors. The S&P 500 Index slipped by 0.15 percent, while the Nasdaq Composite Index rose by 0.21 percent. The Dow Jones Industrial Average was flat (+0.02 percent). The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.54 percent.
FACT OF THE WEEK
Margaret Mitchell’s Gone With the Wind, one of the best-selling novels of all time and the basis for a blockbuster 1939 movie, is published on June 30, 1936.
In 1926, Mitchell was forced to quit her job as a reporter at the Atlanta Journal to recover from a series of physical injuries. With too much time on her hands, Mitchell soon grew restless. Working on a Remington typewriter, a gift from her second husband, John R. Marsh, in their cramped one-bedroom apartment, Mitchell began telling the story of an Atlanta belle named Pansy O’Hara.
Published in 1936, Gone With the Wind caused a sensation in Atlanta and went on to sell millions of copies in the United States and throughout the world. The book drew criticism for its whitewashed depictions of slavery. Mitchell nonetheless won the Pulitzer Prize for Fiction in 1937, and by that time a movie project was already in the works. The film was produced by Hollywood giant David O. Selznick, who paid Mitchell a record-high $50,000 for the film rights to her book.
Though she didn’t take part in the film adaptation of her book, Mitchell did attend its premiere in December 1939 in Atlanta. She died just 10 years later, after she was struck by a speeding car while crossing Atlanta’s Peachtree Street.
MARKET MINUTE
Stocks Rise, Then Slump
Stocks opened higher, and oil prices fell at the start of the week as investors hoped Middle Eastern tensions would ease. However, as investors parsed through updates on the conflict, stocks fell over ongoing uncertainty. Conflicting statements from those involved, as well as from world leaders, contributed to the uncertainty. Midweek, stocks rallied ahead of the Fed's interest rate decision. Markets seemed to dismiss news that housing starts dropped unexpectedly to their lowest level in five years.
The Fed held short-term rates steady. Stocks moved up and down during the Fed Chair’s press conference before ending the trading session slightly down ahead of Thursday’s stock market holiday. Following the holiday, anxious investors refocused on geopolitical tensions and developments. As the week closed out, investors appeared to take a risk-off approach heading into the weekend.
The Fed Holds Rates Steady
As expected, the Federal Reserve kept the Fed funds rate at its target range of 4.25 percent and 4.5 percent. However, the central bank did suggest it may adjust rates later this year, and policymakers expressed concerns about inflation and the outlook for gross domestic product.
Following the decision, Fed Chair Powell said policymakers are “well positioned to wait” before moving on short-term rates. Powell indicated that trade policy has clouded the inflation outlook, making policymakers concerned about consumer prices.
FINANCIAL STRATEGY OF THE WEEK
With the first half of the year in the rearview mirror, summertime is a great chance to touch base. A mid-year financial review can help to take stock of your accomplishments thus far and uncover any needs for adjustments. It’s important to regularly evaluate your financial situation, and a small investment of review time can help ensure you’re on track for both short and long-term objectives. Here are a few areas to examine:
Review financial goals. Take stock of your overall financial resolutions and long-term goals to determine whether you are making appropriate progress or if there’s a need for adjustments.
Revisit your budget. Assess any significant life changes that may impact your financial needs such as marriage, the birth of a child, divorce, or job change. Determine if any recurring costs could be eliminated or any spending habits tightened up.
Tackle taxes. Do you only focus on taxes right before tax time, when it may be too late to implement effective tax-saving strategies? Review your investments and tax withholdings to make sure you’re incurring the smallest tax burden possible. Also, look for opportunities to maximize charitable deductions, use an FSA account, or make adjustments that could lighten your tax load.
Assess savings. You should have at least three months of living expenses in your emergency fund. If you’re not there yet, don’t worry! Look to see how you can start building it up and consider setting up automatic deposits. Also, check on your progress toward other savings goals.
Review retirement. Check on retirement savings to assess progress and determine if you need to increase contributions or not. Consider account types, contribution sources, and tax implications.
Check on credit. It’s a good practice to pull a free credit report every year and examine for any discrepancies or suspicious activity and review your score. The three major bureaus offer a free report every 12-months. If needed, adjust where possible to improve your credit score.
Evaluate debt. Debt can be a major expense and a hindrance to making progress on goals. Review outstanding debt and what progress has been made toward eliminating it, adjust any habits to prevent you from incurring more.
The year is still young! Even if your review reveals a diversion from your goals, there is still time to modify and put things back on track. Identify the areas that require a bit of extra attention and make needed changes to improve them by the end of the year.
If you have questions about this or anything else related to your finances, please give us a call and let's set up some time to talk. We are here for you.