THE WEEK ON WALL STREET
Stocks rose over the shortened trading week as investors digested developments in the Middle East while the Fed held short-term rates steady.
The S&P 500 Index rose 0.93 percent through Thursday’s close, while the Nasdaq Composite Index gained 2.43 percent. The Dow Jones Industrial Average climbed 0.71 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 0.96 percent over the same four-day period.
FACT OF THE WEEK
On June 22, 1953, after a Brooklyn newsboy receives an unusual nickel in payment, he drops it on the ground only to find it hollowed out, with a tiny photo of coded numbers inside. The discovery led the FBI to a Soviet spy named Rudolf Abel.
MARKET MINUTE
Dow Hits 52,000
The week began with stocks rising and oil prices falling after the White House announced that the U.S. and Iran had reached an agreement over the weekend.
All three major averages climbed on Monday, ranging from 1 to 3 percent gains, while crude prices declined by roughly 5 percent.
Tuesday was a split-screen performance. The Dow Jones Industrials rose to a record intraday high as oil prices fell, while the S&P 500 and Nasdaq slipped as investors rotated out of tech and into cyclical stocks such as banks and industrials. The Dow Industrials crossed the 52,000 threshold for the first time.
The S&P and Nasdaq opened higher midweek as tech stocks recovered, and amid news that consumer spending unexpectedly rose in May. Investors also appeared to be in a risk-on mood as they awaited the Fed decision, confident that the Federal Open Market Committee (FOMC) would hold rates steady.
Then, on Thursday, stocks rebounded, led by chipmakers and the AI trade. The S&P 500 capped its 11th winning week of the past 12.
Fed Holds, Hints at Future Hike
As expected, the Fed held rates steady at its June meeting, keeping the Fed Funds Rate at a 3.5 to 3.75 percent target range.
This was the first FOMC meeting with newly minted Fed Chair Kevin Warsh. The Fed acknowledged the tick up in inflation this year, and Warsh reemphasized the Fed’s goal of a 2 percent inflation rate at the post-meeting press conference.
FINANCIAL STRATEGY OF THE WEEK
The Lowdown on Those Free Credit Scores
The Fair and Accurate Credit Transaction Act of 2003 provided individuals with valuable rights to the credit information companies keep on them, but did you know that the credit score provided to you may be different than the one provided to lenders?
The first thing you should know is that you have a right to see your credit report once annually without cost. You can find free credit reports online. The report will contain important information that may affect your credit score.
While your credit report can be obtained for free, your credit score will cost you money, except in the case where you have been denied a loan on the basis of your credit score, in which case you may obtain your credit score for free. However, many banks and lenders are now providing their customers with free monthly credit score updates.
Your credit score is a numerical representation of your creditworthiness, which takes into account past and current credit activities, including any late payments, judgments, liens, bankruptcies, and foreclosures.
When you see an offer for getting your free credit score, it may be a marketing-driven incentive to get you to sign up for a fee-based credit monitoring service. The score may be only available at no cost if you agree to sign up for a trial subscription and don’t cancel prior to the end of that trial period.
The Dirty Little Secret of Credit Scores
Before you purchase your credit score, understand that the methodology used to calculate the score you buy is different from that used to determine the credit score lenders receive.
While the correlation between the scores is high (90%), correlations vary among different consumer subsets. For instance, the correlation is strongest among consumers with scores below the median than for consumers with scores above the median. In fact, up to 27% of the scores received by individuals could be placed in a different credit score category from what the lender receives.
While knowing your credit score may be important, it may be more vital to review your credit report to correct any errors that may be hurting your score. After that, you can take any necessary steps to improve your credit profile.