THE WEEK ON WALL STREET
Stocks fell last week as concerns about sticky inflation and the pace of economic growth rattled investors. The S&P 500 Index declined 1.66 percent, while the Nasdaq Composite Index dropped 2.51 percent. The Dow Jones Industrial Average also fell 2.51 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, was essentially flat (+0.04 percent).
FACT OF THE WEEK
The notorious play "Moose Murders" bombs on Broadway, opening and closing at New York’s Eugene O'Neill Theater on the same night. In doing so, its name becomes synonymous for an abysmal theatrical flop.
An aging movie star, Texas oil money and a man-eating moose failed to save the show, which tied the Broadway record for shortest run. The New York Times later proclaimed: “it is considered the standard of awfulness against which all Broadway flops are judged.”
Young playwright Arthur Bicknell, who had previously penned two off-Broadway productions, said he intended “Moose Murders” to be a farcical, melodramatic murder mystery, and that he was inspired by public-access television personalities who "are being funny and don't know it." The convoluted plot revolved around a wealthy family vacationing in an Adirondack lodge full of hunting trophies. It featured a man-eating moose, a wheelchair-bound quadraplegic bandaged like a mummy and a caretaker wearing Indian war paint but speaking with an Irish accent. The director, John Roach, cast his wife, Lillie Robertson, in one of the leading roles. What she lacked in acting experience, she made up for in cash: As the heiress to a Texas oil fortune, she bankrolled the production.
On opening night, although the curtain fell on cue, there was no applause. One member of the cast recalled, "I don’t think there ever was a show in the history of Broadway where you took a bow to silence."
The reviews were nothing short of scathing. New York Times theater critic Frank Rich suggested that audience members would "hold periodic reunions, in the noble tradition of survivors of the Titanic." The New Yorker’s Brendan Gill wrote that it “would insult the intelligence of an audience consisting entirely of amoebas.” The New York Post’s Clive Barnes described "Moose Murders” as “so indescribably bad that I do not intend to waste anyone’s time by describing it." One critic simply said, “If your name is Arthur Bicknell, change it."
MARKET MINUTE
S&P 500 Hits New High, Then Slips
Following the Presidents’ Day holiday, stock prices were largely range-bound on Tuesday despite some intraday volatility. Then stocks edged higher, shaking off some new tariff talk and disappointing housing starts data. The S&P 500 marked its third record close of the year on Wednesday.
On Thursday, stocks were under pressure from the start of trading after a weaker-than-expected outlook from a mega-retailer. The update reinforced some concerns that the economy may be slowing. The selling accelerated on Friday after a consumer sentiment survey showed investors are unsettled about the inflation outlook.
Friday’s decline was the worst of the young year.
Economic Jitters
Investors were forced to navigate a week of disappointing news about the economy and inflation. First, traders were surprised to hear about slowing demand at the country’s biggest retailer, which soured the outlook for the consumer and the economy. Then, the University of Michigan Consumer Confidence survey fell by 10 percent in February as consumers expressed concerns about higher inflation ahead of possible new tariffs. This combination prompted investors to move into a “risk-off” position before the weekend.
FINANCIAL STRATEGY OF THE WEEK
Budget Check Up: Tax Time Is the Right Time
Every year, about 140 million households file their federal tax returns. For many, the process involves digging through shoe boxes or manila folders full of receipts; gathering mortgage, retirement, and investment account statements; and relying on computer software to take advantage of every tax break the code permits.
It seems a shame not to make the most of all that effort.
Tax preparation may be the only time of year when many households gather all their financial information in one place. That makes it a perfect time to take a critical look at how much money is coming in and where it’s all going. In other words, this is a great time to give the household budget a checkup.
Six-Step Process Budget Check Up
A thorough budget checkup involves six steps.
Creating Some Categories. Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.
Following the Money. Go through all the receipts and statements gathered to prepare taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of a latte on the way to the office each day.
Projecting Expenses Forward. Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.
Determining Expected Income. Add together all sources of income. Make sure to use net income.
Doing the Math. It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and look to reduce those with the lowest importance until the budget is balanced.
Sticking to It. If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.
Tax time can provide an excellent opportunity. You have a chance to give your household budget a thorough checkup. In taking control of your money, you may find you are able to devote more of it to the pursuit of your financial goals.