The Week on Wall Street
Anticipation of a new fiscal stimulus and improved vaccine distribution powered stocks to fresh record highs last week with technology stocks leading the way.
The Dow Jones Industrial Average gained 0.59%, while the S&P 500 picked up 1.94%. The Nasdaq Composite index led, gaining 4.19% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose by 1.15%.
FACT OF THE WEEK
On January 27, 1888 the National Geographic Society was founded in Washington, D.C. for "the increase and diffusion of geographic knowledge" by a small group of eminent explorers and scientists.
The nonprofit organization, which is among the world’s largest scientific and educational societies, is especially known for sponsoring expeditions and producing maps that helped set cartographic standards.
MARKET MINUTE
Stocks Scale New Heights
In a holiday-shortened week, stocks rallied as investors welcomed testimony from incoming Treasury Secretary Janet Yellen to the Senate Finance Committee that suggested lawmakers needed to “act big” on fiscal stimulus, raising hopes for a new round of federal spending.
An orderly presidential transition and the anticipation of a more effective vaccine distribution plan contributed to stocks touching multiple new highs last week. Investor enthusiasm was further supported by a strong start to the fourth-quarter earnings season.
Mega-cap technology companies resumed their market leadership ahead of a full calendar of big tech earnings reports this week. Market momentum stalled a bit into the close on concerns that any stimulus spending bill might come in lower than expected.
Earnings Beating Expectations
One of the concerns of market watchers has been the valuations of stocks. Stocks are currently trading at about 23 times 2021 earnings, above the historical range of 15 to 17 times forward earnings.
Today’s valuations may be explained by expectations of a strong economic rebound and a concomitant rise in corporate profits. So far, this earnings season appears to vindicate the optimism; With 41 of S&P 500 companies reporting through last Thursday, 91% of them have exceeded estimates by an average of 18.5%.
Investors are expected to continue to watch company earnings in the weeks ahead to see whether these consensus-beating results continue.
FINANCIAL STRATEGY OF THE WEEK
Seniors are frequent targets for financial scams, as many have considerable assets and excellent credit, which can make for an accessible victim. Some of the most common cons involve fake cemetery plots or funeral arrangements, counterfeit medications, worthless anti-aging products, phony charity appeals, home repair fraud, lottery scams, investment schemes, and a thief posing as a Medicare representative to obtain personal information. Here are a few things you can do to keep yourself, or the seniors in your life, safe in today's age:
Monitor Finances and Credit
Get involved with your finances and review statements or have online access to your accounts so you can watch for unusual charges. Use a credit monitoring service and ensure no additional lines of credit or inquiries are being made.
Remove from Lists
Add your phone number to the Do Not Call registry, opt out of lists from the Direct Marketing Association, and be extremely skeptical of telemarketers who still call. Also consider cancelling a land line in favor of a cell number where telemarketing and scam calls are less frequent. Investigate any donation requests or solicitations.. After you receive a questionable call or letter, consider any potential red flags.
Screen Visitors
Carefully screen home caregivers and only use accredited companies for any home visits for repairs or service. To be extra safe, lock driver’s license, valuables, and credit cards in a safe.
Be Vigilant with Your Information
Refrain from giving your personal information to strangers or making quick financial decisions, especially when pressured. If you suspect that you have been victimized, alert authorities to protect yourself and others from future scams.
Please don’t hesitate to reach out to our office for more information or assistance with safeguarding your assets.
As always, please let us know if there is anything we can help with along the way or any financial concerns you may have.