THE WEEK ON WALL STREET
Stocks rose last week thanks to a full slate of upbeat third-quarter corporate results and mild inflation data, which helped soften concerns over trade tensions with China. The S&P 500 Index gained 1.92 percent, while the Nasdaq Composite Index rose 2.31 percent. The Dow Jones Industrial Average advanced 2.20 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 1.24 percent.
FACT OF THE WEEK
On October 26, 1918, Baronet Cecil Chubb, the last private owner of Stonehenge, gifted it to the British people. Three years earlier, on a whim, he paid £6,600 for the ramshackle megalith at auction. His wife, who had sent him to buy dining chairs, was not pleased.
MARKET MINUTE
S&P, Dow Set New Highs on Friday
Stocks rose out of the gate as optimism returned to markets. Strength in the tech sector—and whispers of an imminent end to the government shutdown—pushed all three market averages higher.
But the strong start turned mixed as some pressure on megacap tech stocks pulled down the Nasdaq. But while tech stocks regrouped, attention shifted to the Dow Industrials, which hit a record intraday high of 47,000 and a record close.
Sentiment soured midweek as weaker-than-expected earnings results from two megacap tech companies dragged down technology names. Markets came under further pressure following news that the administration was considering restrictions on U.S.-made software exported to China. The S&P, Dow, and Nasdaq all closed lower on Wednesday.
But the mood brightened Thursday as more megacap tech companies announced strong Q3 results, and as the White House confirmed a scheduled meeting with China.
News on Friday that inflation rose more slowly than expected boosted all three averages. The S&P 500 and Dow Industrials hit all-time intraday and closing highs.
Inflation Eases
The Consumer Price Index report, delayed due to the government shutdown, showed prices rose by 3.0 percent in September on an annualized basis, slightly cooler than the 3.1 percent forecast.
This news paved the way for the Fed to stick with its penciled-in rate cut at its two-day meeting, which ends on October 29.
In addition to the upbeat inflation news, Q3 corporate earnings–one of the key drivers of stock prices–have been beating expectations 80% of the time as of Friday.
FINANCIAL STRATEGY OF THE WEEK
Three Key Questions to Answer Before Taking Social Security
Social Security is a critical component of the retirement financial strategy for many Americans, so before you begin taking it, you should consider three important questions. The answers may affect whether you make the most of this retirement income source.
When to Start?
You have the choice of:
1) starting benefits at age 62,
2) claiming them at your full retirement age, or
3) delaying payments until age 70.
If you claim early, you can expect to receive a monthly benefit that will be lower than what you would have earned at full retirement. If you wait until age 70, you can expect to receive an even higher monthly benefit than you would have received if you had begun taking payments at your full retirement age. The decision of when to begin taking benefits may hinge on whether you need the income now or can wait, and whether you think your lifespan will be shorter or longer than the average American.
Should I Continue to Work?
Work provides income, personal satisfaction, and may increase your Social Security benefits. However, if you begin taking benefits prior to your full retirement age and continue to work, your benefits will be reduced by $1 for every $2 in earnings above the prevailing annual limit ($23,400 in 2025). If you work during the year in which you attain full retirement age, your benefits will be reduced by $1 for every $3 in earnings over a different annual limit ($62,160 in 2025) until the month you reach full retirement age. After you attain your full retirement age, earned income no longer reduces benefit payments.
How Can I Maximize My Benefit?
The easiest way to maximize your monthly Social Security benefit is to simply wait until you turn age 70 before receiving payments.
If you have questions about Social Security or anything else, call Shari at my office and let's set up some time to talk. We are here for you.