THE WEEK ON WALL STREET
Amid a busy week of corporate earnings reports, stocks slumped on cautious earnings guidance, fears of higher interest rates, and growing anxiety over the increasing amount of Treasury bonds and notes coming to market. The Dow Jones Industrial Average dropped 1.88%, while the S&P 500 declined 3.29%. But the Nasdaq Composite index gave up 4.48% for the five trading days. The MSCI EAFE index, which tracks developed overseas stock markets, retreated 1.82%.
FACT OF THE WEEK
“The War of the Worlds”—Orson Welles's realistic radio dramatization of a Martian invasion of Earth—is broadcast on the radio on October 30, 1938.
Welles was only 23 years old when his Mercury Theater company decided to update H.G. Wells’s 19th-century science fiction novel The War of the Worlds for national radio. Despite his age, Welles had been in radio for several years, most notably as the voice of “The Shadow” in the hit mystery program of the same name. “War of the Worlds” was not planned as a radio hoax, and Welles had little idea of how legendary it would eventually become.
The show began on Sunday, October 30, at 8 p.m. A voice announced: “The Columbia Broadcasting System and its affiliated stations present Orson Welles and the Mercury Theater on the air in ‘War of the Worlds’ by H.G. Wells.”
Sunday evening in 1938 was prime time in the golden age of radio, and millions of Americans had their radios turned on. But most of these Americans were listening to ventriloquist Edgar Bergen and his dummy “Charlie McCarthy” on NBC and only turned to CBS at 8:12 p.m. after the comedy sketch ended and a little-known singer went on. By then, the story of the Martian invasion was well underway.
Welles introduced his radio play with a spoken introduction, followed by an announcer reading a weather report. Then, seemingly abandoning the storyline, the announcer took listeners to “the Meridian Room in the Hotel Park Plaza in downtown New York, where you will be entertained by the music of Ramon Raquello and his orchestra.” Putrid dance music played for some time, and then the scare began. An announcer broke in to report that “Professor Farrell of the Mount Jenning Observatory” had detected explosions on the planet Mars. Then the dance music came back on, followed by another interruption in which listeners were informed that a large meteor had crashed into a farmer’s field in Grovers Mills, New Jersey.
Soon, an announcer was at the crash site describing a Martian emerging from a large metallic cylinder. “Good heavens,” he declared, “something’s wriggling out of the shadow like a gray snake. Now, here’s another and another one and another one. They look like tentacles to me … I can see the thing’s body now. It’s large, large as a bear. It glistens like wet leather. But that face, it… it … ladies and gentlemen, it’s indescribable. I can hardly force myself to keep looking at it; it’s so awful. The eyes are black and gleam like a serpent. The mouth is kind of V-shaped with saliva dripping from its rimless lips that seem to quiver and pulsate.”
The Martians mounted walking war machines and fired “heat-ray” weapons at the puny humans gathered around the crash site. They annihilated a force of 7,000 National Guardsmen, and after being attacked by artillery and bombers, the Martians released a poisonous gas into the air. Soon, “Martian cylinders” landed in Chicago and St. Louis. The radio play was extremely realistic, with Welles employing sophisticated sound effects and his actors doing an excellent job portraying terrified announcers and other characters. An announcer reported that widespread panic had broken out in the vicinity of the landing sites, with thousands desperately trying to flee.
The Federal Communications Commission investigated the unorthodox program but found no law was broken. Networks did agree to be more cautious in their programming in the future. The broadcast helped Orson Welles land a contract with a Hollywood studio, and in 1941, he directed, wrote, produced, and starred in Citizen Kane—a movie that many have called the greatest American film ever made.
MARKET MINUTE
October Slide Continues
Stocks continued their slide last week despite mostly better-than-expected earnings results. While earnings surprises were generally positive, investors were troubled by declines in year-over-year net profit margins and tepid earnings guidance. Particularly hard hit were technology companies, following mixed earnings results. Economic data released on Thursday showed remarkable economic strength, with above-consensus forecast growth in third-quarter Gross Domestic Product (GDP) and September’s durable goods orders, with only a minor uptick in initial jobless claims. The results fanned worries that the Fed might need to hike rates further or, at least, maintain high rates for longer.
Strong Economic Data
The first read of third-quarter economic growth was a blowout, with GDP increasing at an annualized rate of 4.9%. This pace was well ahead of the prior quarter’s 2.1% expansion and above consensus forecasts. Powering the third quarter’s economic performance was strong consumer spending and inventory build-up. Durable goods orders jumped 4.7% in September, confirming the nation’s continued good economic health, easily outpacing the 0.1% rise in August and economists’ forecast of two percent. Meanwhile, initial jobless claims slightly increased, suggesting that the labor market remains healthy.
FINANCIAL STRATEGY OF THE WEEK
When it comes to Medicare, age 65 is when you are eligible to enroll and begin receiving benefits. That’s not the only date to keep in mind, especially if you still carry alternative insurance through an employer and don’t plan to enroll right away.
Initial Enrollment Period: This is a 7-month period that includes the three months before your 65th birthday month, the month of your 65th birthday, and the three months after. It is within this period that you can enroll in Medicare for the first time.
If you miss the Initial Enrollment Period, you can still sign up, but failure to enroll at age 65 will result in a permanent penalty of 10% for every 12 months you could have enrolled but did not.
Open Enrollment: Between the dates of October 15th - December 7th, is when individuals can purchase Part C Medicare Advantage Plans and Part D Prescription Drug Plans for the upcoming year. New plans go into effect on January 1st of the following year.
General Enrollment: Between the dates of January 1st- March 31st, allows individuals not enrolled in Medicare to sign up for Part B. However, individuals will be forced to pay a Part B premium penalty for not signing up during their Initial Enrollment Period. There are exceptions to this rule for those who were covered under an employer’s or spouse’s employer health plan during their Initial Enrollment Period.
Medicare Advantage Disenrollment Period: Between the dates January 1st - February 14th, Part C policyholders are allowed to make changes, switch, or drop their plan to Original Medicare. This period is only for Part C policyholders, not those who carry Original Medicare.
If you’d like help building a timeline that aligns your financial needs with your Medicare enrollment schedule, we’d be happy to help you evaluate your options. Please let us know if you have questions!