THE WEEK ON WALL STREET
A Friday rally overcame a shaky week, sending stocks mostly higher.
The Dow Jones Industrial Average slipped 0.30% for the week. Meanwhile, the S&P’s 500 gained 0.48%, and the Nasdaq Composite index added 1.60% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, fell 2.37%.
FACT OF THE WEEK
On October 9, 1936, harnessing the power of the mighty Colorado River, Hoover Dam began sending electricity over transmission lines spanning 266 miles of mountains and deserts to run the lights, radios, and stoves of Los Angeles.
Initially named Boulder Dam, work on the dam was begun under President Herbert Hoover’s administration but completed as a public works project during the Roosevelt administration (which renamed it for Hoover). When it was finished in 1935, the towering concrete and steel plug was the tallest dam in the world and a powerful symbol of the new federal dedication to large-scale reclamation projects designed to water the arid West. In fact, the electricity generated deep in the bowels of Hoover Dam was only a secondary benefit. The central reason for the dam was the collection, preservation, and rational distribution of the most precious of all Western commodities: water.
Under the guidance of the Federal Reclamation Bureau, Hoover Dam became one part of a much larger multipurpose water development project that tamed the wild Colorado River for the use of the growing number of western farmers, ranchers, and city dwellers. Water that had once flowed freely to the ocean now was impounded in the 115-mile-long Lake Mead. Massive aqueducts channeled millions of gallons of Colorado River water to California, where it continues to this day to flow from Los Angeles faucets and irrigate vast stretches of fertile cropland.
With Hoover Dam, the federal government set out to demonstrate that the aridity of a region once called the Great American Desert need be no serious obstacle to its full settlement and development. However, as rapidly growing western cities like Los Angeles, Las Vegas, and Phoenix today face increasing difficulties in obtaining the water they need, it remains to be seen if the Great American Desert might still dictate its own limits to western growth.
Stocks rallied on Friday after a stronger employment report than Wall Street expected. The headline increase in September payrolls initially generated fears of further Fed rate hikes, leading to a spike in bond yields and steep early morning losses. A yield retreat may have triggered the turnaround as investors focused more on the month’s moderate wage growth.
Stocks were shaky for much of last week on rising bond yields. When Treasury yields hit their highest level since 2007 on Tuesday, stock prices dropped, leaving the Dow Industrials in negative territory for the year. The catalyst for the day’s spike in interest rates was a surprisingly strong JOLTS (Job Openings and Labor Turnover Survey) showing nearly one million more open jobs than investors had expected.
All About Jobs
The labor market remains resilient. August JOLTS showed job openings exceeded 9.6 million, above the consensus estimate of 8.8 million. A weak Automated Data Processing (ADP) private payroll job growth (released Wednesday) that showed 89,000 new private sector jobs appeared to be an outlier compared to the other reports.
Friday’s monthly employment report showed a robust gain of 336,000 new jobs, nearly double the consensus forecast of 170,000. At the same time, the previous two months saw significant upward revisions of 119,000 (combined) from initial reports. Wage gains rose modestly, coming in below expectations and striking a hopeful note on inflation.
FINANCIAL STRATEGY OF THE WEEK
October is CyberSecurity Awareness Month
Keeping your PII (personally identifiable information) safe in today’s online environment is more challenging than ever. There may not be one simple solution for protecting your digital identity, but there are steps you can take to help thwart criminals. Freezing your credit, updating software on your devices, staying knowledgeable about the latest scams, making sure your passwords are hyper-secure, and regularly backing up your data will lessen your chances of compromising your personal online information. Sadly, sometimes that is still not enough.
If you have reason to believe you’ve been the victim of a cybercrime or identity theft, here are some crucial steps you should take:
Alert the company where the fraud has occurred.
Immediately change your passwords for all online accounts.
Close any compromised credit or debit cards.
File a police report so you can provide it to banks, creditors, businesses, or credit bureaus as evidence of the crime.
If your data has been compromised by a corporate data breach, look for instructions on what to do next from the business or agency whose data was breached.
- Contact one of the three credit bureaus to put a fraud alert on your credit report to prevent further damage.
Once you’ve taken the actions above, you should also report it to the following agencies:
- Internet Crime Complaint Center (IC3) - They refer each internet-related criminal complaint to the appropriate state, local, federal, or international law enforcement.
- Federal Trade Commission (FTC) - They share complaints with the proper law enforcement partners and provide you with the next steps to take.
- econsumer.gov - They accept complaints regarding any online scams that deal with foreign companies.
- Department of Justice (DOJ) - They help you report to the proper agencies based on the scope of all internet-, intellectual property- and computer-related crimes.
Not only will these steps help you get things squared away, but they can potentially assist authorities in their investigations to stop criminals from taking advantage of others. Good luck, and stay vigilant!