THE WEEK ON WALL STREET
Stock prices pushed higher last week, notching multiple records along the way as employment and inflation data took center stage in anticipation of the Fed’s upcoming meeting. The S&P 500 Index rose 0.31 percent, while the Nasdaq Composite Index picked up 0.91 percent. The Dow Jones Industrial Average gained 0.50 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, added 0.72 percent.
FACT OF THE WEEK
On December 8th, 1985, one of the first personal computer shops opened in Mission Valley, California. The Byte Shop sells the first 50 Apple-1 computers, which retail for $666.66. Collectors now pay hundreds of thousands of dollars for them.
MARKET MINUTE
Fed in Spotlight
Stocks fell to start the week as all three averages snapped a five-day win streak.
Megacap tech stocks then led a recovery rally, which continued its momentum midweek as ADP's November report showed a decline in private-sector payrolls. Investors welcomed the report, believing it might prompt an interest rate adjustment at the Fed’s upcoming meeting. All three major averages posted modest gains over both Tuesday and Wednesday.
Stocks then largely went sideways, with small gains for the S&P and Nasdaq while the Dow fell slightly. Meanwhile, the Russell 2000, which measures the performance of small-cap stocks, has cracked a fresh record high.
Markets rallied on Friday after a delayed inflation report showed that prices rose at a slightly slower annualized rate in September. The S&P closed out a four-day winning streak.
Economy Watch
The Fed’s preferred measure of inflation stayed cool. The Personal Consumption Expenditures (PCE) Price Index rose 2.8 percent in September from a year prior, cooler than the 2.9 percent expected. The annualized core inflation rate of 2.8 percent also came in just under expectations.
The ADP private-sector jobs showed employers cut 32,000 jobs in November. Two things to remember: (1) this report is only based on the first two weeks of November, and (2) small business payrolls declined by 120,000, while employers with 50 or more workers added 90,000 jobs.
An optimistic inflation report but a sluggish jobs update added to growing speculation that the Fed will adjust rates at its next (and last) meeting of the year.
FINANCIAL STRATEGY OF THE WEEK
Understanding Extended Care
Addressing the potential risks of extended-term care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.
Seven in ten people over age 65 can expect to need extended care services at some point in their lives. So understanding the various types of extended care services – and what those services may cost – is critical as you consider your retirement approach.
What Is Extended Care?
Extended care is not a single activity. It refers to a variety of medical and non–medical services needed by those who have a chronic illness or disability – most commonly associated with aging.
Extended care can include everything from assistance with activities of daily living – help dressing, bathing, using the bathroom, or even driving to the store – to more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Extended care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And extended care is not exclusively for the elderly; it is possible to need extended care at any age.
How Much Does Extended Care Cost?
Extended care costs vary state by state and region by region. The 2024 national average for care in a skilled care facility (single occupancy in a nursing home) was $120,304 a year. The national average for care in an assisted living center (single occupancy) was $66,126 a year. Home health aides cost a median of $34 per hour, but that rate may increase when a licensed nurse is required.
What Are the Payment Choices?
Often, extended care is provided by family and friends. Providing care can be a burden, however, and the need for assistance tends to increase with age.
Individuals who would rather not burden their family and friends have two main choices for covering the cost of extended care: they can choose to self-insure or they can purchase extended care insurance.
Many self-insure by default – simply because they haven't made other arrangements. Those who self-insure may depend on personal savings and investments to fund any extended care needs. The other approach is to consider purchasing extended care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
When it comes to addressing your extended care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach to extended care.