Market Update: October 17, 2022-Volatility Reigns; Inflation Remains Unchecked. The Biggest COLA Increase Since 1981, Plus SFG News and Events

 

 

 

 

 

Table of Contents

Market Insights: Volatility Reigns; Inflation Remains

SFG News & Events

Food for Thought

Tax Tip

Healthy Living Tip

Weekly Riddle

Photo of the Week

[sta_anchor id=”market”]

[/sta_anchor]

Stocks were mixed last week amid wide intra- and inter-day price swings, as technology shares bore the brunt of the downdraft.

The Dow Jones Industrial Average gained 1.15% for the week. Meanwhile, the Standard & Poor’s 500 slipped 1.55%, and the Nasdaq Composite index dropped 3.11%. The MSCI EAFE index, which tracks developed overseas stock markets, lost 2.48%.1,2,3

Breathtaking Volatility

An above-consensus consumer inflation number sent stocks tumbling in early Thursday trading before inexplicably surging higher in a stunning reversal that saw the Dow Jones Industrial Average rally 1,500 points from its intraday low. Before reversing, stocks had touched levels last seen in 2020. Friday surrendered much of the previous day’s gains, sending stocks mostly lower for the week.4

The stock market began the week on a volatile note, with the Nasdaq hitting a two-year low. Recession fears and new export controls may limit U.S. companies from selling advanced semiconductor chips and related manufacturing equipment to China.5

Sticky Inflation

September’s inflation reports provided little evidence that inflation was moderating meaningfully. The Producer Price Index’s first report on inflation showed a 0.4% increase in supplier prices over August and an 8.5% increase 12 months ago. While down from August’s 8.7% rise, it was higher than market expectations.6

The subsequent release of the Consumer Price Index showed consumer prices rising 0.4% in September and 8.2% year-over-year. More troubling was core inflation (excludes energy and food prices), which gained 0.6% in September and registered an increase of 6.6% from a year ago–the biggest 12-month increase since August 1982.7

This Week: Key Economic Data

Tuesday: Industrial Production.

Wednesday: Housing Starts.

Thursday: Existing Home Sales. Jobless Claims. Index of Leading Economic Indicators. 

Source: Econoday, October 14, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Monday: Bank of America Corporation (BAC), The Charles Schwab Corporation (SCHW).

Tuesday: Netflix, Inc. (NFLX), Johnson & Johnson (JNJ), The Goldman Sachs Group, Inc. (GS).

Wednesday: Tesla, Inc. (TSLA), United Airlines Holdings, Inc. (UAL), International Business Machines Corporation (IBM), The Procter & Gamble Company (PG), Lam Research Corporation (LRCX), Abbott Laboratories (ABT).

Thursday: AT&T, Inc. (T), CSX Corporation (CSX), Union Pacific Corporation (UNP), Freeport McMoran, Inc. (FCX).

Friday: Verizon Communications, Inc. (VZ), HCA Healthcare, Inc. (HCA), American Express Company (AXP).

Source: Zacks, October 14, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

[sta_anchor id=”sfg”][/sta_anchor]

The Biggest COLA Increase Since 1981

How well do you remember 1981? Harrison Ford had his first bow as Indiana Jones in Raiders of the Lost Ark. Frogger and Donkey Kong were all the rage at video arcades. Bob Ross left the Air Force and took up painting. On top of that, we had the largest Social Security cost-of-living adjustment (COLA) on record: 11.2%.

This year’s COLA increase won’t reach that high, but the Senior Citizens League anticipated it to be as much as 8.7%. As it turns out, they were right on the nose. This tops last year’s 5.9% increase.1

What this increase means for those collecting Social Security benefits is additional help battling inflation. The average Social Security retiree benefit will increase $146 per month, to $1,827 in 2023, from $1,681 in 2022.1

Why is it happening now? Congress has COLA increases pegged to rising inflation. While there’s been a great deal of talk about inflation this year, the increase depends on the much-anticipated official numbers: the third quarter’s Consumer Price Index (CPI) is measured against the CPI of the previous year, and the COLA is calculated from that.

While this increase has been widely anticipated, you may still have questions about this and other economic factors. I’m happy to discuss how this might affect your financial strategy.

1. CNBC.com, October 13, 2022

 

The impact of the pandemic, rising inflation, and rising fuel costs is still felt by many in our community struggling to make ends meet. This year, Team SFG is hosting a food drive to benefit Manna Food Center in fighting hunger, feeding hope, and helping our neighbors get back on their feet.

Please bring non-perishable food items to our Greenbelt office.

Drop off times are from October 17th, till October 31st, Monday-Friday from 9:30 AM to 4:30 PM.

As always, we will match all donations collected so that we can make twice the difference!

From all of us at Stuart Financial Group and on behalf of Manna Food Center, thank you for joining us in giving back to our community.

[sta_anchor id=”quote”][/sta_anchor]

“You must do the thing you think you cannot do.”

Eleanor Roosevelt

[sta_anchor id=”tax”][/sta_anchor]

 

[sta_anchor id=”healthy”][/sta_anchor]

Hiking in Fall

Few things are more beautiful than the crisp reds, yellows, and oranges of fresh fall foliage. And what better way to experience fall than with a hike?

If you’re headed out for a fall hike, The American Hiking Society shares some tips to keep you safe and comfortable:

  • Make sure to research your route before you go. You can use apps to study the map of a specific hike.
  • Bring the correct-sized backpack for your needs. Your pack should fit your back length and be large enough to hold the essentials, such as extra clothes, snacks, and water.
  • Make sure to hike in boots that are the correct size. Nothing will ruin a hike faster than ill-fitting boots. Before you head out on your hike, walk around in your boots to break them in and ensure that they are the correct fit.

Tip adapted from American Hiking Society9

[sta_anchor id=”riddle”]

[/sta_anchor]

They are sometimes stomped on, yet they can also be very tasty and sweet. What are they?

 

Last week’s riddle: A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid? Answer: He’s a baseball player who has just hit a home run. The masked men are the umpire and opposing team’s catcher.

[sta_anchor id=”photo”][/sta_anchor]

Dubai Marina, Dubai, United Arab Emirates

 

Share the Wealth of Knowledge. We love being introduced!

Sources:

  1. The Wall Street Journal, October 14, 2022

  2. The Wall Street Journal, October 14, 2022

  3. The Wall Street Journal, October 14, 2022

  4. CNBC, October 13, 2022

  5. CNBC, October 10, 2022

  6. CNBC, October 12, 2022

  7. CNBC, October 13, 2022

  8. IRS.gov, August 2, 2022

  9. American Hiking Society, August 4, 2022

 

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with Stuart Financial Group, J.W. Cole Advisors, Inc., nor state or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Copyright 2021 FMG Suite.