Last Friday’s job report sent the market in opposite directions. After the release, showing over 300K jobs created and the last 2 months numbers increased, stocks fell sharply. Later in the day, after realizing that wages only increased by .2%, stocks reversed course, ending the day higher.
Friday’s action sums up the true uncertainty about where our economy is heading.
The unexpected high job creation number suggested the economy remains stronger than anticipated which may force the Fed to continue to raise interest rates.
The lower-than-expected wage increase number was interpreted by investors as a sign wage pressure is abating, which may lead to a soft or “no” landing.
Is economic activity slowing, increasing, or staying range bound? The answer for now, is purely speculative at best.
This week brings continued inflation reports and the start of the all-important 3rd quarter corporate profit reports.
The Consumer Price Index (CPI) and the Producer Price Index (PPI) will shed light on our continuing battle with rising prices.
On Friday, profit season kicks in as we’ll hear from some of our major banks including JP Morgan, Wells Fargo, and Citi. Particular attention should be paid to what is said about Commercial lending. A businesses willingness to borrow often reflects their desire to expand based on their view of the economy.
Stocks were mixed last week with the Dow off (.30%), the Russell 2000 off (2.22%), foreign stocks and emerging market stocks down less than (1%).
The Nasdaq finished higher, increasing 1.60% and the S&P 500 rose .48%.
Oil has fallen from over $90/barrel to finish last week at $82.81. Will oil prices be impacted by the Israel/Palestine issue which could turn into a full-scale war? Geopolitical events typically impact our impacts in the very short-term. This event is worth keeping our thumbs on the pulse.
The yield on the 10-year US Treasury ending last week @ 4.795%. Over the last few months, the 10-year yield has increased from 3.8%.
Many believe that yields are peaking and perhaps overshooting to the upside. If the economy does slow, it should be expected that market interest rates will drop. It’s hard not to lean in this camp as the Fed has and continues to withdraw the significant medicine injected with both higher rates and selling off the Fed’s balance sheet.
Get ready for the barrage of commercials and information over-load. Medicare’s annual open enrollment runs from October 15th thru December 7th.
I suggest reviewing your Medicare coverage to make sure you have the best cost-effective coverage for your situation.
During the open-enrollment period, you can:
- Change from one Medicare Advantage Program to another. The new program will be effective 1/1/2024.
- Change from Medicare Advantage to Original Medicare. With Original Medicare Part A & B, you’ll need to shop and secure a Medicare Supplement and a Part D Prescription Drug plan. If you are beyond the initial 6-month period of signing up for Part B, you may need to provide medical evidence of insurability for your Supplement plan.
- Change your Part D prescription Drug program to another Part D plan. If you do so, the new plan will become effective on 1/1/2024.
For Part D Prescription plan holders, I suggest shopping this coverage annually. Insurance companies do make changes to their drug formulary, sometimes moving certain drugs from one tier to another.
To shop your Medicare Advantage plan or your Part D prescription drug programs, have a list of your current prescription drugs. Some Medicare Insurance agents will shop your drug coverage for you or, you can go onto the Medicare website and do so yourself.
The website to shop for Medicare Advantage Plans, Supplements and the Part D prescription drug program can be found at:
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