THE WEEK ON WALL STREET
Stocks were down for the week as investors appeared to take some profits and traders parsed Fed Chair Jerome Powell’s Congressional testimony.
FACT OF THE WEEK
Though today, there is almost nothing as ubiquitous as a bottle of Coca-Cola, this was not always the case. For the first several years of its existence, Coke was only available as a fountain drink, and its producer saw no reason for that to change. It was not until March 12, 1894, that Coke was first sold in bottles.
Originally developed as a non-addictive substitute for morphine, then marketed as a non-alcoholic "temperance drink," Coca-Cola was invented by John Pemberton, a druggist in Columbus, Georgia, in 1886. It was soon popular throughout the region, and the rights to the brand passed to Asa Griggs Candler. Candler's nephew had advised him that selling the drink in bottles could greatly increase sales, but Griggs apparently wasn't interested. The first person to bottle Coke was Joseph A. Biedenharn, owner of a candy store in Vicksburg, Mississippi. Correctly determining that bottles could boost sales, Biedenharn put the drink into Hutchinson bottles, a common and reusable glass bottle that bore no resemblance to the modern Coke bottle. He sent Candler a case, but Candler continued to stick with fountain sales.
Five years later, Candler finally sold the national bottling rights to Coke—excluding the right to bottle it in Vicksburg—to two brothers from Chattanooga. Still convinced that bottling would not be a major source of revenue, Candler sold the bottling rights for a dollar and reportedly never collected even that. The contract stipulated that a bottle of Coke would cost 5 cents and had no end date, a legal oversight that resulted in the price remaining the same until 1959. In 1915, the bottlers put out a call for a new design, one so distinctive that one could recognize it if it were in pieces on the ground or by feeling it in the dark. The winning design, produced by the Root Glass Company of Terre Haute, Indiana, gave the world the iconic contoured bottle we know today.
MARKET MINUTE
Markets Wobble
Stocks had a rough start to the week, with the Dow, S&P 500, and Nasdaq each off more than one percent on Tuesday alone. Mega-cap tech stocks were under pressure as investors appeared to take some profits. Markets clawed back much of their losses on Wednesday and Thursday, with the Fed Chair’s upbeat comments to the Senate Banking Committee boosting stocks. Chair Powell said that once the Fed was confident inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. The S&P 500 and Nasdaq rallied, with the S&P hitting a record close. Friday's employment news threw some uncertainty into the mix. The economy added 275,000 jobs in February—exceeding the 198,000 expected—but wage growth slowed, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.
Fed Watch: Productivity
Productivity is one of the critical data points the Fed reviews to determine its next steps with monetary policy. Producing more goods or services with fewer resources helps the economy grow while managing inflation risks. The 3.2 percent productivity gains in Q4 reported last week were mainly attributed to the post-pandemic repair of supply chains. However, investors may hope that artificial intelligence will play a more significant role in productivity increases.
FINANCIAL STRATEGY OF THE WEEK
Medicare Advantage 101
Medicare Advantage, sometimes known as “Part C,” is something of a catch-all choice for those who are ready to sign up for Medicare. Medicare Advantage plans are offered by private insurers in conjunction with the Medicare program and can provide you with additional health insurance coverage.
What’s in them?
In addition to signing up for Medicare Part A (hospital stays) and Part B (medical coverage), Medicare Advantage plans offer their subscribers extra features. This frequently, but not always, includes the Medicare Part D prescription drug plan. In some cases, Medicare Advantage plans offer coverage for areas not normally offered within regular Medicare plans. This can include dental, hearing, and vision insurance.
What are the rules?
Medicare pays for a fixed amount of your health care to the company offering your Medicare Advantage (MA) plan. Beyond that, each MA plan requires different out-of-pocket fees. Those fees can vary from plan to plan. Depending on your plan, you may have different rules you need to follow when seeking a medical referral to get treatment from a specialist or if you are seeking non-urgent care (even from health care providers within the plan). It’s also important to remember that rules, requirements, and features may change from year to year. It will be important to make sure that those changes line up with any treatment that you need.
What about my prescriptions?
While most MA plans offer Part D coverage for prescription drugs, some don’t. One example would be for Medicare Medical Savings Account plans. In cases where the plan can’t or chooses not to offer prescription drug coverage, you may have the ability to join a separate Medicare Prescription Drug Plan, depending on the type of plan you enroll in. You will likely have a number of questions and concerns as you examine your options for Medicare Advantage plans. Discuss these with a trusted financial professional who can help you make choices that may best fit your lifestyle.