THE WEEK ON WALL STREET
Stocks extended their August declines last week as higher yields and weak economic data out of China soured investor sentiment. The Dow Jones Industrial Average lost 2.21%, while the S&P 500 retreated 2.11%. The Nasdaq Composite index backtracked 2.59% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 2.83%.
FACT OF THE WEEK
While salmon fishing near the Klondike River in Canada’s Yukon Territory on August 16, 1896, George Carmack reportedly spots nuggets of gold in a creek bed. His lucky discovery sparks the last great gold rush in the American West.
Hoping to cash in on reported gold strikes in Alaska, Carmack had traveled there from California in 1881. After running into a dead end, he headed north into the isolated Yukon Territory, just across the Canadian border. In 1896, another prospector, Robert Henderson, told Carmack of finding gold in a tributary of the Klondike River. Carmack headed to the region with two Native American companions, known as Skookum Jim and Tagish Charlie. On August 16, while camping near Rabbit Creek, Carmack reportedly spotted a nugget of gold jutting out from the creek bank. His two companions later agreed that Skookum Jim–Carmack’s brother-in-law—actually made the discovery.
Regardless of who spotted the gold first, the three men soon found that the rock near the creek bed was thick with gold deposits. They staked their claim the following day. News of the gold strike spread fast across Canada and the United States, and over the next two years, as many as 50,000 would-be miners arrived in the region. Rabbit Creek was renamed Bonanza, and even more gold was discovered in another Klondike tributary, dubbed Eldorado.
“Klondike Fever” reached its height in the United States in mid-July 1897 when two steamships arrived from the Yukon in San Francisco and Seattle, bringing a total of more than two tons of gold. Thousands of eager young men bought elaborate “Yukon outfits” (kits assembled by clever marketers containing food, clothing, tools and other necessary equipment) and set out on their way north. Few of these would find what they were looking for, as most of the land in the region had already been claimed. One of the unsuccessful gold-seekers was 21-year-old Jack London, whose short stories based on his Klondike experience became his first book, The Son of the Wolf (1900).
For his part, Carmack became rich off his discovery, leaving the Yukon with $1 million worth of gold. Many individual gold miners in the Klondike eventually sold their stakes to mining companies, who had the resources and machinery to access more gold. Large-scale gold mining in the Yukon Territory didn’t end until 1966, and by that time the region had yielded some $250 million in gold. Today, some 200 small gold mines still operate in the region.
Rising bond yields, driven primarily by strong economic data and the release of the minutes from July’s Federal Open Market Committee (FOMC) meeting that pointed toward Fed officials’ potential need to raise rates further, weighed on stocks throughout the week.
In a week of light trading typical of August, stocks were additionally buffeted by a string of economic data that painted a flailing economic recovery in China and warnings of potential downgrades of dozens of U.S. banks by Fitch, a credit-rating agency. After the 10-year Treasury yield rose to its highest level since October 2022 on Thursday, yields eased on Friday, helping to arrest the week’s downward trend.
Retail Sales Surprise
Retail sales jumped 0.7% in July, the fourth-consecutive month of increasing consumer spending on goods. The report supported the growing narrative that the U.S. may be able to avoid a recession in the near term. The strong spending data, supported by a robust labor market, also may have placed the Fed in a more difficult position in trying to bring inflation down to its target rate without more rate hikes. Consumer spending was higher in most categories, including bars and restaurants, grocery and hardware stores, and back-to-school items like books and clothing. Sales of autos and electronics fell, a possible consequence of higher borrowing costs.
FINANCIAL STRATEGY OF THE WEEK
Conquering Retirement Challenges for Women
When it comes to retirement, women may face unique obstacles that can make saving for retirement more challenging. Given that women typically live longer than men, retirement money for women may need to stretch even further.
Despite these challenges, a wise strategy can give women reasons to be hopeful.
Get clear on your vision.
Do you want to spend your retired years traveling, or do you envision staying closer to home? Are you seeing yourself moving to a retirement community, or do you want to live as independently as you can? If you’re married, sit down with your spouse to discuss your visions for retirement. You can't see if you're on track for your goals if you haven't defined them. If you do find you’re falling short of where you want to be, a financial professional can help you strategize about how you can either get to where you want to go or adjust your strategy to fit your situation.
Get creative with your strategy.
If you expect to or have taken time off from the workforce, you may want to increase your contributions to your retirement accounts while you are working. If you’re staying home while your spouse works, you may be able to contribute to an individual retirement account. Once you reach age 73, you must begin taking required minimum distributions (RMDs) from a Traditional Individual Retirement Account and other retirement plans in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Traditional IRA contributions may be fully or partially deductible, depending on your adjusted gross income.
Keep the conversation open.
One of the best things you can do is to make sure you are having regular conversations about finances and hearing from well-informed sources. There are more resources than ever at your disposal, and working with a trusted financial professional can help ensure that you always know where things stand.
While women can face many challenges as they save for retirement, careful preparation and a creative approach can help you rise to the occasion and pursue the fulfillment of your goals.