THE WEEK ON WALL STREET
Stocks ended mixed last week amid the outbreak of hostilities in the Middle East and higher-than-expected inflation data. The Dow Jones Industrial Average gained 0.20%, while the S&P 500 rose 0.45%. But the Nasdaq Composite index slipped 0.18% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.37%.
FACT OF THE WEEK
On October 17, 1931, gangster Al Capone was sentenced to 11 years in prison for tax evasion and fined $80,000, signaling the downfall of one of the most notorious criminals of the 1920s and 1930s.
Alphonse Gabriel Capone was born in Brooklyn, New York, in 1899 to Italian immigrants. He was expelled from school at 14, joined a gang, and earned his nickname “Scarface” after being sliced across the cheek during a fight. By 1920, Capone had moved to Chicago, where he was soon helping to run crime boss Johnny Torrio’s illegal enterprises, which included alcohol smuggling, gambling, and prostitution. Torrio retired in 1925 after an attempt on his life, and Capone, known for his cunning and brutality, was put in charge of the organization.
Prohibition, which outlawed the brewing and distribution of alcohol and lasted from 1920 to 1933, proved extremely lucrative for bootleggers and gangsters like Capone, who raked in millions from his underworld activities. Capone was at the top of the F.B.I.’s “Most Wanted” list by 1930, but he avoided long stints in jail until 1931 by bribing city officials, intimidating witnesses, and maintaining various hideouts. He became Chicago’s crime kingpin by wiping out his competitors through a series of gangland battles and slayings, including the infamous St. Valentine’s Day Massacre in 1929, when Capone’s men gunned down seven rivals. This event helped raise Capone’s notoriety to a national level.
Among Capone’s enemies was federal agent Elliot Ness, who led a team of officers known as “The Untouchables” because they couldn’t be corrupted. Ness and his men routinely broke up Capone’s bootlegging businesses, but it was tax evasion charges that finally stuck and landed Capone in prison in 1931. Capone began serving his time at the U.S. Penitentiary in Atlanta, but amid accusations that he was manipulating the system and receiving cushy treatment, he was transferred to the maximum-security lockup at Alcatraz Island, in California’s San Francisco Bay. He got out early in 1939 for good behavior, after spending his final year in prison in a hospital, suffering from syphilis.
Plagued by health problems for the rest of his life, Capone died in 1947 at age 48 at his home on Palm Island, Florida.
MARKET MINUTE
Inflation Hurts Sentiment
Stocks exhibited remarkable resilience in the face of a surprise attack on Israel and hotter inflation data than investors expected. Stock prices initially buckled on the breakout of hostilities in the Middle East. Still, they rallied in afternoon trading as investors gained optimism that the war may not spread to other countries. Oil and defense stocks rose sharply, while airlines fell.
Stocks continued to advance into Wednesday as falling bond yields and a retreat in oil prices overcame the disappointment of an elevated wholesale inflation report. When consumer prices also came in higher than anticipated by Wall Street, stocks moved lower in response to higher bond yields. The weakness continued into Friday on a bump in consumer inflation expectations despite a solid start to a new earnings season.
PPI, CPI Updates
The disinflationary trend appears to be stalling if the inflation numbers are any indication. September’s producer price index (PPI) came in higher than expected, rising 0.5% versus a forecast of a 0.3% increase, while the year-over-year increase of 2.2% was the most significant jump since April. The driver of last month’s hop was in goods, which surged 0.9%.
Consumer inflation data followed, which also came in hotter than forecast. The Consumer Price Index (CPI) rose 0.4% in September and 3.7% year-over-year above the forecast of 0.3% and 3.6%, respectively. The news on core inflation was a bit more comforting, rising in line with expectations.
FINANCIAL STRATEGY OF THE WEEK
October is CyberSecurity Awareness Month
Some of the most widespread cyber-attacks that compromise your personal and financial information are done through phishing. Phishing is when someone reaches out to you using deceptive emails and websites in an attempt to gather personal information, money, or both. The attackers’ abilities to masquerade themselves as a reputable company or person have gotten so good that many clients have fallen for them and shared their stories.
Here are some tips to help keep yourself safe from these creative phishing scams.
- Stay informed through the news about the latest phishing techniques. Share your knowledge with friends and family.
- Whenever a company sends an email claiming to need personal information from you or encouraging you to click on a link or open an attachment, go directly to the company’s secure website and log into your account from there, or call them directly instead.
- On social media websites, don’t post personal information such as your home address, phone number, or date of birth. These are key pieces of information needed to open accounts in your name and can be used by scammers to create and send phishing emails to you.
- Verify a site’s security and legitimacy before inputting your username and password by checking to make sure the web address begins with “https” and has a padlock symbol to the left of the website’s URL. You can even click on the padlock to validate that it’s secure.
- Be aware of URL redirects that subtly send you to a different website designed similarly to the one you expect. Ensure the site name, capitalization, and punctuation are exactly as they should be. You can install an anti-phishing toolbar that will automatically run quick checks on the sites you visit.
- Ignore any emails or websites with bad grammar. Misspelled words and awkward phrasing are always red flags and should be considered illegitimate.
By following these tips, we hope you can significantly reduce your chances of falling victim to phishing and keep your online accounts secure.