THE WEEK ON WALL STREET
Concerns that the Fed may raise interest rates soured investor sentiment, sending stocks lower in a holiday-shortened trading week. The Dow Jones Industrial Average slipped 0.75%, while the S&P 500 declined 1.29%. The Nasdaq Composite index dropped 1.93% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.28%
FACT OF THE WEEK
On this, the 22nd Anniversary of the tragedy of 9-11, we honor the memories of those lost and celebrate the heroic acts of those who saved lives.
On September 12, 1995, in Vienna, Austria, the Harlem Globetrotters tip off the third game of an 11-game exhibition series in Europe against a team of retired basketball stars led by Kareem Abdul-Jabbar, aptly named "Kareem's All-Stars." Unlike the previous 8,829 games, the Globetrotters lose 91-85—the team’s first loss since 1971. The Globetrotters' games are usually scripted, but this game is not. Despite being 48 years old, Abdul-Jabbar put the team on his back, scoring 34 points. Bo Kimble, a former college standout and New York Knick, scored 13 points and grabbed eight rebounds. Abdul-Jabbar and Kimble were aided by a handful of other old, former NBA standouts such as Artis Gilmore, Jo-Jo White, Nate “Tiny” Archibald, and 40-year-old Cedric “Cornbread” Maxwell. The victory had additional significance for Abdul-Jabbar, who was no stranger to the Globetrotters. In 1969, the Globetrotters—known primarily for their on-court antics—reportedly offered him a $1 million contract to play with them after his historic collegiate career at UCLA. Abdul-Jabbar turned the deal down and went on to become the No. 1 pick of the 1969 NBA Draft by the Milwaukee Bucks. After the win, Abdul-Jabbar complimented the Globetrotters, saying they were “a very good basketball team” and that “they impressed our team with their poise in this loss.”
MARKET MINUTE
Stocks Resume Their Decline Stocks were bedeviled by rising bond yields and higher oil prices last week, with technology shares bearing the brunt of the decline. Hopes that the Fed may not find it necessary to raise interest rates were dented by economic data reflecting higher prices, rising labor costs, and fewer-than-forecast initial jobless claims. The inflationary implications of higher oil prices also contributed to the growing sense that the Fed may implement additional rate hikes. While bond traders generally still expect no rate hike in September, the likelihood of a 0.25% rate hike or higher in November jumped to 43.3% by Friday morning from 35.4% a week ago. Oil Prices SpikeLast week, Saudi Arabia and Russia announced they would extend their oil production cuts to the end of the year. Investors had expected these cuts to be stretched to October, so the three-month extension surprised the markets. The announcement sent oil prices higher on supply shortage worries in the coming winter months, with the West Texas Intermediate (WTI) oil price climbing to a 10-month high. Higher oil prices also sparked concerns that it would make the Fed’s inflation fight more difficult, potentially forcing the Fed to hike rates above market expectations.
FINANCIAL STRATEGY OF THE WEEK
At the height of back-to-school season, I wanted to discuss an important topic that might be on your mind: the cost of education. Whether you have children or grandchildren preparing for college or considering furthering your education, it's important to understand the financial side.
Let's delve into some eye-opening statistics about the cost of college.
• In 2022, the average amount families spent on college reached $25,313.
• Interestingly, family savings and income covered 54 percent of this amount, highlighting the importance of diligent financial preparation.
• Scholarships and grants accounted for 26 percent, while student borrowing constituted 18 percent. In 2023, the projected average household cost for back-to-college shopping is $1,367, while back-to-school shopping may average $890 per household.
Let's proactively address the financial aspects of education and create a strategy so that you and your loved ones can pursue your academic aspirations. We can work together to help you prepare for any upcoming educational expenses.