Broker Check

The Weekly Wealth Report

November 06, 2023


Stocks ripped higher last week on a dramatic retreat in bond yields triggered by easing inflation and a slowing labor market. The Dow Jones Industrial Average jumped 5.07%, while the S&P 500 surged 5.85%. The Nasdaq Composite index rocketed 6.61% higher for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.12%.


At a remote spot called Craigellachie in the mountains of British Columbia, the last spike was driven into Canada’s first transcontinental railway on November 7, 1885.

In 1880, the Canadian government contracted the Canadian Pacific Railroad to construct the first all-Canadian line to the West Coast. During the next five years, the company laid 4,600 kilometers of single track, uniting various smaller lines across Canada. Despite the logistical difficulties posed by areas such as the muskeg (bogs) region of northwestern Ontario and the high rugged mountains of British Columbia, the railway was completed six years ahead of schedule.

The transcontinental railway was instrumental in populating the vast western lands of Canada with settlers and providing supplies and commerce. Many of western Canada’s great cities and towns grew up around Canadian Pacific Railway stations.


Stocks Rise
Stocks jumped higher right from the start of the week, shaking off the prior week’s sell-off. The combination on Wednesday of the Fed’s decision to keep rates unchanged, which accompanied dovish comments from Fed Chair Powell, and a reassuring Treasury announcement on future bond sales, sparked a third straight day of gains. Slight employment gains and weak manufacturing data provided an additional impetus. The rally continued on Thursday following a sharp drop in bond yields that was driven, in part, by substantial productivity gains and decelerating wage growth. When Friday’s monthly employment report was lighter than forecast, yields pulled back further, and stocks added to their week’s gains.

Signs Of Labor Cooling
Last week’s employment data showed potential for a cooling labor market after many months of confounding economists’ expectations. The first sign was a lower-than-expected growth in new private sector jobs in October, as reported by Automated Data Processing (ADP), which showed a gain of 113,000 new jobs versus a forecast of 130,000, while job openings were little changed. Initial and continuing jobless claims also rose, exceeding consensus estimates. On Friday, the government’s monthly employment report further confirmed a potentially cooling employment picture, showing an October slowdown in hiring (150,000 new jobs versus September’s revised gain of 297,000) and an uptick in the unemployment rate to 3.9%.


During our working years, many of us have access to an employer-sponsored health insurance plan either through our job or our spouse's job. But when it comes to retirement, we typically rely on Medicare and Medicare supplemental coverage to afford the ever-increasing cost of healthcare. Unfortunately, though, Medicare doesn't cover one of the most significant categories of healthcare costs as we age: long-term care.

Long-term care is coverage you need while recovering from injury or illness. As we age, we rarely go from acutely sick to perfectly well in a day or two. While Medicare will cover the acutely sick part, it could take weeks or months to get back to a level of wellness in which self-care is possible. The out-of-pocket cost for this type of care can range dramatically, depending on the level of care you need. That means your retirement nest egg could be gobbled up by just one health crisis requiring long-term care. So, what could you do to protect yourself?

Long-term care insurance is designed to cover the gap between Medicare and your retirement funds. The younger and healthier you are when you apply, the less expensive the coverage will likely be. Some insurance companies offer hybrid long-term care/life insurance policies, or long-term care policies that spouses can share. Even if you're young, healthy, and independent today, it's a great idea to check out long-term care options and see if it's a value that makes good sense for you. Let's connect if you need help evaluating long-term care policies that might support your financial success in retirement.