The Week on Wall Street
Daily headlines about the coronavirus had little impact on stock market averages last week. Earnings and mergers had more influence.
FACT OF THE WEEK
The Random Acts of Kindness (RAK) Foundation, located in Denver, CO, established the first community Random Acts of Kindness awareness day on February 17, 1995.
After twenty successful years, the RAK Foundation outreach has transformed into a global awareness movement. With over 87 countries represented and over 30,000 members, it is a day to celebrate kindness and the opportunity to do something nice for a family member, coworker, or stranger just because you chose to.
All three Wall Street benchmarks improved. The Nasdaq Composite rose 2.21%, outpacing the S&P 500, up 1.58%, and the Dow Jones Industrial Average, up 1.02%. The MSCI EAFE index, which tracks developed overseas equity markets, added 0.17%.
Jerome Powell Testifies on Capitol Hill
Commenting that the economy is in a “very good place,” Federal Reserve Chairman Jerome Powell told congressional legislators that he did not currently see a significant recession risk.
“There’s nothing about this expansion that is unstable or unsustainable,” Powell remarked during his semi-annual report to the House Financial Services Committee. He did reiterate that the central bank was “carefully” watching the coronavirus outbreak and that it could “very likely” have a residual economic impact on the U.S.
Yearly Inflation Reaches 2.5%
Consumer prices have not advanced to this degree since the 12-month period ending in October 2018. Underneath this January headline inflation number, core inflation (minus food and energy prices, which are often volatile) was up 2.3% year-over-year.
These numbers are from the Consumer Price Index, maintained by the Bureau of Labor Statistics. The Federal Reserve monitors inflation using its core personal consumption expenditures (PCE) index, which remains below the central bank’s 2% yearly inflation target.
Gains in Retail Sales, Sentiment
The Census Bureau said retail sales were up 0.3% in the first month of the year, matching the consensus forecast of analysts polled by MarketWatch. Additionally, the University of Michigan’s preliminary February consumer sentiment index monitoring consumer confidence factors went back above 100 last week (100.9).
The S&P 500 has risen more than 1% since the coronavirus surfaced. During the SARS epidemic of 2003, the MERS outbreak of 2013, and the 2015-16 Zika virus breakout, the index declined.
FINANCIAL STRATEGY OF THE WEEK
PREVENT A RIFT: MONEY TIPS FOR NEWLYWEDS
In a recent study, 88% of millennials admitted that financial decisions are a source of tension in their relationship with a spouse or partner, which could help explain why some experts say financial problems are the most common reason that marriages fail.
Fortunately, couples may be able to head off many of the problems money can cause in a marriage.
10 Tips for Newly Married Couples
• Communication—Couples should consider talking about their financial goals, memories, and habits because each may come into the marriage with fundamental differences in experiences and perspectives that will drive their behaviors.
• Set Goals—Setting goals establishes a common objective that both become committed to pursuing.
• Create a Budget—A budget is an exercise for developing a spending and savings plan designed to reflect mutually agreed-upon priorities.
• Set the Foundation for Your Financial House—Identify assets and debts. Look to begin reducing debts while building your emergency fund.
• Work Together—By sharing financial decision making, both spouses are vested in all choices, reducing the friction that can come from a single decision-maker.
• Set a Minimum Threshold for Big Expenses—While possessing a level of individual spending latitude is reasonable, large expenditures need both spouses’ consent. Agree to what purchase amount should require a mutual decision.
• Set Up Regular Meetings—Set aside a predetermined time either every two weeks or once a month to discuss finances. Talk about your budgeting, upcoming expenses, and any changes in circumstances.
• Update and Revise—As a newly married couple, you may need to update the beneficiaries on your accounts, reevaluate your insurance coverage, and revise (or create) your will.
• Love, Trust, and Honesty—Approach contentious subjects with care and understanding, be honest about money decisions you know your spouse might be upset with, and trust your spouse to be responsible when handling finances.
• Consider Speaking with a Financial Advisor—A financial advisor may offer insights to help you work through the critical financial decisions that all married couples face.
As always, please contact my office with any questions or financial concerns you may have.