THE WEEK ON WALL STREET
Stocks continued their upward climb last week as excitement around big tech continued; positive economic reports stoked investors’ belief that the Federal Reserve has pulled off a soft landing.
FACT OF THE WEEK
On January 29, 1936, the U.S. Baseball Hall of Fame elected its first members in Cooperstown, New York: Ty Cobb, Babe Ruth, Honus Wagner, Christy Matthewson, and Walter Johnson. The Hall of Fame actually had its beginnings in 1935, when plans were made to build a museum devoted to baseball and its 100-year history. A private organization based in Cooperstown called the Clark Foundation thought that establishing the Baseball Hall of Fame in their city would help to reinvigorate the area's Depression-ravaged economy by attracting tourists. To help sell the idea, the foundation advanced the idea that U.S. Civil War hero Abner Doubleday invented baseball in Cooperstown. The story proved to be phony, but baseball officials, eager to capitalize on the marketing and publicity potential of a museum to honor the game's greats, gave their support to the project anyway. In preparation for the dedication of the Hall of Fame in 1939--thought by many to be the centennial of baseball--the Baseball Writers' Association of America chose the five greatest superstars of the game as the first class to be inducted: Ty Cobb was the most productive hitter in history; Babe Ruth was both an ace pitcher and the greatest home-run hitter to play the game; Honus Wagner was a versatile star shortstop and batting champion; Christy Matthewson had more wins than any pitcher in National League history; and Walter Johnson was considered one of the most powerful pitchers to ever have taken the mound. Today, with approximately 350,000 visitors per year, the Hall of Fame continues to be the hub of all things baseball. It has elected 278 individuals in all, including 225 players, 17 managers, 8 umpires, and 28 executives and pioneers.
Stocks Power Ahead
Big tech was back last week, pushing the Dow and the S&P 500 to new highs early in the week as markets resumed the late Q4 rally. The so-called “Magnificent Seven” stocks—comprising 28% of the S&P 500 Index—resumed their pole position at the head of the pack as investors maintained their artificial intelligence (AI)-related bullishness and rewarded widespread cost-cutting at many tech giants. While the rally fizzled on Friday, the week’s gains were slow but steady. The big economic news last week was better-than-expected economic growth and inflation news. Real Gross Domestic Product grew at a 3.3% annualized clip in Q4 2023, ahead of Wall Street consensus expectations of 2%.
The Personal Consumption Expenditures (PCE) Index, one of the Fed’s most favored inflation gauges, showed core inflation (excluding food and energy) cooled in December, with an annualized rate of 2.9%, beating consensus expectations. Core inflation was 3.2% on an annualized basis—its lowest level since March 2021. While the inflation update didn’t move markets much, it helped validate investors’ optimism that Fed policy has maintained economic growth while bringing inflation down.
Earnings Season Feeds FOMO
The market digested Q4 earnings news from some of the largest companies, with enthusiasm feeling like FOMO. The “fear of missing out” drove much investor sentiment and seemed to build market momentum.
While the enthusiasm for AI continues to be one driver of technology stock prices, the spotlight last week was on layoffs. Over 23,000 workers at 85 tech companies have lost their jobs this month. The market appears to be rewarding the cost-cutting measures, with many tech giants repositioning themselves with AI in mind, and some analysts inferring that this emphasis on efficiency may encourage investors.
FINANCIAL STRATEGY OF THE WEEK
Only four in ten Americans have a home inventory, despite the fact that 3.4 million Americans were displaced by natural disasters in 2022.
It’s great to have insurance against damage and loss, but if you can't show proof of your possessions, it may result in a protracted settlement process with your insurance company.
Four Tips for Creating an Inventory
Creating an inventory may take a bit of upfront work. Still, it can pay future benefits in smoothing the claims settlement process with your insurer and increase the potential of receiving the maximum payment possible.
Tip #1—Make a Video of Your Possessions
A visual record of your possessions is the best proof of ownership. When videoing your home contents, make sure you are methodical and thorough in going through all your rooms and storage spaces. Speak while you are taping to describe each item, including any relevant information (e.g., This is a signed first edition of "Moby Dick").
Tip #2—Document the Value of Your Items
Scan or video receipts of the items in your home. Indicate the make and model where appropriate. If you have artwork or antiques, consider creating a record of any appraisal you may have received on your collectibles.
Tip #3—Secure Your Inventory
An inventory doesn't help much if you keep it in the house and your home burns to the ground. If your video is digital (highly recommended), consider storing the file in a "cloud" account (such as our Wealth Management Platform Vault) rather than on your computer or on a USB stick stored in a safety deposit box.
Tip #4—Keep Your Inventory Updated
Failure to regularly update your inventory may mean leaving off expensive new purchases.
Get started by asking your insurance agent if they have an inventory checklist, which may help you remember to include items that you might otherwise overlook.
If you are interested in learning more about our secure portal for holding documents within our Wealth Management Platform, please contact Amber at my office for more information.