THE WEEK ON WALL STREET
Stocks pushed higher last week, buoyed by strong third-quarter results posted by several money center banks. The S&P 500 Index gained 1.70 percent, while the Nasdaq Composite Index rose 2.14 percent. The Dow Jones Industrial Average advanced 1.56 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.74 percent.
FACT OF THE WEEK
On October 19, 2024, the Kalamazoo Wings hockey team set a world record for the most foam fingers waved simultaneously at a game—3,414 fans waved at once. Giant foam fingers have been a thing since 1971, when a high school teacher in Iowa made a papier-mâché prototype.
MARKET MINUTE
A Bumpy Week
Stocks rose to start the week after the White House shifted tone over the weekend on trade relations with China. Gains were broad-based—4 out of 5 stocks in the S&P 500 rose—with the index posting its best day since May 27.
Overnight, the specter of a revived trade war with China reemerged after the country placed sanctions on U.S. subsidiaries of South Korean shipbuilders in an apparent effort to increase its control over global shipping. Stocks opened sharply lower the next morning, and then quickly staged an impressive rebound—helped by mostly positive quarterly earnings results from a handful of big money center banks.
Stocks rose again midweek as better-than-expected Q3 corporate results from the biggest banks continued to roll in, overpowering negative sentiment around lingering trade concerns. As the week wrapped, bank stocks and all three broad market averages pushed through jitters to end in the green.
Bank Stock Paradox
While trade tensions with China dominated the attention during the week, some bank news also captured investor interest.
Last week, several money center banks reported expectation-beating Q3 results, underscoring the narrative of a healthy economy and robust consumer spending.
But there was a flip side to the banking sector: a smaller regional bank reported a $50 million credit loss from two commercial loans. The loss also hit larger banks with a stake in the loss. The news rattled the markets. For investors, it evoked memories of two regional bank failures in 2023, raised questions about whether this was a broader systemic issue, and put pressure on bank stocks, both big and small.
FINANCIAL STRATEGY OF THE WEEK
3 Estate Challenges for Blended Families
Preparing your estate can be complicated, and if you're a part of a blended family, estate decisions can be even more complex and nuanced. Blended families take on many forms but typically consist of couples with children from previous relationships. Here are a few case studies to help illustrate some of the challenges.
Case Study #1: Children From Previous Marriages
Simple wills often are structured to leave all assets to the surviving spouse. If your estate strategy relies on this type of will, you could risk overlooking children from previous marriages. Also, while it's unsettling to consider, the surviving spouse can end up changing a will without proper measures put in place.1
When new children join a blended family, estate strategies can get even more complicated. But with a well-structured approach, you can direct how to distribute your assets.
Case Study #2: When One Partner Has Significantly More Assets
While the divorce rate has been trending lower, the number of remarriages (2nd or more marriages) has increased. One person entering into a new marriage may have more assets than their spouse, given that 40% of all new marriages are remarriages for one or both spouses. An estate strategy can help ensure that your assets pass down according to your wishes.2
Case Study #3: Traditional Trusts May Not Be Enough
In blended families, a traditional trust is a good start, but it may not go far enough. One possible solution is to create three trusts (one for each spouse, in addition to a joint trust) to help address different scenarios.3
Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional familiar with the rules and regulations.
Starting the Process
Blended families are pretty common these days. If you're in that position, it's important to remember that you can create an estate strategy to address your specific situation. The first step may be an estate document review.
1. Investopedia.com, April 30, 2023
2. Forbes.com, August 8, 2023
3. Investopedia.com, March 31, 2023