THE WEEK ON WALL STREET
Investor optimism and fears of missing out on future gains propelled stocks higher in the last full week of trading before year-end.
The Dow Jones Industrial Average added 0.22%, while the S & P’s 500 gained 0.75%. The Nasdaq Composite index advanced 1.21% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.51%.
FACT OF THE WEEK
“White Christmas,” written by the formidable composer and lyricist Irving Berlin receives its world premiere on December 26, 1941 on Bing Crosby’s weekly NBC radio program, The Kraft Music Hall. It went on to become one of the most commercially successful singles of all time.
“White Christmas” took its first steps toward becoming a bedrock standard in the American songbook when Crosby first performed it publicly on Christmas Day, 1941. The song’s success couldn’t have surprised Berlin, who, despite having already written such songs as “Alexander’s Ragtime Band,” “Cheek To Cheek” and “God Bless America,” had raced into his Manhattan office in January 1940 and asked his musical secretary to transcribe “The best song I ever wrote…the best song anybody ever wrote.” It was nearly two years later, however, that Crosby finally premiered the song on live radio, and a year after that that Crosby’s recording of “White Christmas” became a smash pop hit.
Crosby’s October 1942 recording of “White Christmas” received heavy airplay on Armed Forces Radio as well as on commercial radio during its first Christmas season, becoming an instant #1 pop hit. It also returned to the Hit Parade pop chart in every subsequent Christmas season for the next 20 years. Unlike other perennial holiday hits, however, “White Christmas” strikes a mood that isn’t necessarily jolly. As Jody Rosen, author of the 2002 book White Christmas: The Story of an American Song, told National Public Radio, “It’s very melancholy….And I think this really makes it stand out amongst kind of chirpy seasonal standards [like] ‘Rudolph the Red-Nosed Reindeer’ or ‘Let It Snow.’….I think that’s one of the reasons why people keep responding to it, because our feelings over the holiday season are ambivalent.”
This was certainly true of the immigrant Russian-Jewish songwriter Irving Berlin. Though he did not celebrate Christmas, it was a day that held special meaning to Berlin, who had spent each Christmas Day visiting the grave of his late son, Irving Berlin, Jr., who died at just 3 weeks old on December 25, 1928. As Jody Rosen has suggested about a beloved song of great emotional complexity, “The kind of deep secret of [“White Christmas”] may be that it was Berlin responding in some way to his melancholy about the death of his son.”
Stocks Build On Gains
The current market narrative of declining inflation, easing interest rates, and better earnings ahead continued to fuel stock market gains, with some of the year’s laggards, such as smaller cap stocks and energy names, leading the way.
While the stock market has repeatedly seen gains gather steam in the final trading hours, a late-day sell-off on Wednesday unnerved investors. While it’s difficult to know precisely why, the sharp decline may have resulted from profit-taking and low trading volumes, which can result in unexpected volatility or other technical reasons. Whatever the case, stocks rebounded nicely the following day and Friday.
The housing market struggled this year amid higher mortgage rates and rising home prices. Last week, several housing reports suggested the housing market may be improving.
New home construction rose 14.8% in November, reaching levels not seen since May, while existing home sales rebounded 0.8%, reversing five straight months of declines. Existing home sales have been hurt by low inventory since many homeowners with low-rate mortgages are hesitant to move and take on a higher-rate mortgage. This logjam may loosen as 30-year mortgage rates fell from 7.79% at the end of October to 6.95% in mid-November.
New home sales disappointed, however, falling 12.2%, though they came in 1.4% higher from November a year ago.
FINANCIAL STRATEGY OF THE WEEK
Does Your Credit Score Affect Your Insurance Rates?
While the vast majority of insurance companies use credit-based insurance scores to help determine the price of insurance, it is banned in the states of Massachusetts, Michigan, Hawaii, and California. Some states only allow it as a factor for property insurance like auto and homeowners insurance. Other states allow it to be used with any type of insurance.
Generally, an insurance company will use a credit-based insurance score as just one factor in its underwriting process. Other factors may be considered, depending on the type of insurance. For example, with auto insurance, other factors could include your zip code, the age of the driver, the make, model, and age of the car, and the number of miles you drive annually. The use of credit scores to determine insurance rates is rooted in research that has shown individuals with lower credit scores tend to file more claims. You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy, and in which risk category you were placed.
If you want to improve your credit-based insurance score, you should consider taking the same steps you would to improve your credit rating: make timely debt payments, clear up past disputes, and keep credit card balances low.