The Week on Wall Street
Markets drifted lower last week as uninspired investors digested mixed news on the economic front.
The Dow Jones Industrial Average lost 0.91% while the S&P 500 slid 1.48%. The Nasdaq Composite index stumbled 1.54% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.26%.
FACT OF THE WEEK
National Winnie the Pooh Day on January 18th commemorates author A.A. Milne’s birthday in 1882. He brought the adorable, honey-loving bear to life in his stories, which also featured his son, Christopher Robin.
Milne’s lovable Pooh Bear, as he was fondly called, is a fictional bear inspired by a black bear named Winnie. Winnie lived at the London Zoo during World War I. The author’s son, Christopher Robin, would visit the bear often and named his own teddy bear after her and a swan named Pooh.
This friendship inspired a collection of books starting with Winnie-the-Pooh in 1926. E.H. Shepard beautifully illustrated the books.
Stocks Drift Lower
Stocks traded without much conviction last week, pushed lower, in part, by a broad retreat in technology. Rising interest rates also dampened enthusiasm, feeding concerns over their effect on current stock valuations.
Markets seemed deaf to a stream of news, moving little on the House impeachment vote, encouraging news on the vaccine front, reassurances from Fed Chair Powell, or a jump in jobless claims. Energy and financials continued their recent advance, while smaller capitalization stocks rose on expectations of becoming beneficiaries of any stimulus bill.
Stocks turned lower to close the week, following the unveiling of president-elect Biden’s stimulus plan and a weaker-than-expected retail sales number.
New Stimulus Proposal
Biden revealed his long-anticipated stimulus proposal last week, announcing a $1.9 trillion spending plan to provide further help to an unsteady economy.
Along with monetary easing, fiscal stimulus has been one of the major drivers of the stock market recovery, which is why investors have anxiously awaited his plan.
His proposal seeks to help individuals, including direct payments for qualifying Americans and enhanced unemployment aid. The proposal would also include help for small businesses with a new grant program in addition to the Paycheck Protection Program, and would bolster state finances by funding frontline workers, vaccine distribution, reopening schools, and vital services.
The market reaction was muted. Investors will be watching the extent to which Congress amends Biden’s proposal and the speed at which it’s picked up by the legislature.
FINANCIAL STRATEGY OF THE WEEK
For many of us, Social Security plays an important part in our financial plans for retirement or later stages of life. Even if you’re years away from applying for benefits, there are good reasons to set up your online Social Security account at: www.socialsecurity.gov/myaccount.
Ensure Accurate Reporting
You can go online to ensure there aren’t any gaps in your earnings. The amount you receive from Social Security is based on how much you’ve earned over your working career. Many people change jobs frequently, increasing the possibility an employer will fail to report their earnings, use the wrong Social Security number, or use an incorrect name. If there is a mistake, you’ll want to fix it as soon as possible, so you aren’t shortchanged when you apply for benefits.
Protect Against Fraud
By setting up an online Social Security account, you’ll prevent anyone else from doing so. Much like income tax fraud, identity thieves sometimes set up Social Security accounts and file for benefits using other people’s names. You don’t want to wait until you retire to find someone else is collecting your hard-earned benefits. The most effective way to prevent that is by creating your own account.
Access to Documents
You can easily replace a lost or stolen Social Security card – for free. With an online account, there’s no need to sit through traffic to get to your local office and wait in line for a new card. You can also download a printable copy of your Social Security 1099/Benefit Statement, which is the tax form the Social Security Administration mails each year in January. No need to wait.
Maintain Your Account.
If you already receive Social Security, you can still benefit from having an online account. You can set up or change direct deposit or address information and get a benefit verification letter, which you may need if you’re applying for a loan. You’ll also be able to check the status of your Social Security benefit application from anywhere you can safely log in to your account.
If you’re wondering about the role of Social Security benefits in your retirement plans, please call our office. We can help you evaluate your financial plan and the impact of Social Security, to ensure that you’re on track to work toward the retirement you envision.
As always, please let us know if there is anything we can help with along the way or any financial concerns you may have.