THE WEEK ON WALL STREET
A Friday rally turned an otherwise mixed week for stocks into a solid performance. The Dow Jones Industrial Average picked up 2.42%, while the S&P 500 gained 0.77%. The Nasdaq Composite index rose 0.38% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, ended marginally higher by 0.13%.
FACT OF THE WEEK
The Dei Gratia, a small British brig under Captain David Morehouse, spots the Mary Celeste, an American vessel, sailing erratically but at full sail near the Azores Islands in the Atlantic Ocean. The ship was seaworthy, its stores and supplies were untouched, but not a soul was onboard.
On November 7, the brigantine Mary Celeste sailed from New York harbor for Genoa, Italy, carrying Captain Benjamin S. Briggs, his wife and two-year-old daughter, a crew of eight, and a cargo of some 1,700 barrels of crude alcohol. After the Dei Gratia sighted the vessel on December 4, Captain Morehouse and his men boarded the ship to find it abandoned, with its sails slightly damaged, several feet of water in the hold, and the lifeboat and navigational instruments missing. However, the ship was in good order, the cargo intact, and reserves of food and water remained on board.
The last entry in the captain’s log shows that the Mary Celeste had been nine days and 500 miles away from where the ship was found by the Dei Gratia. Apparently, the Mary Celeste had been drifting toward Genoa on her intended course for 11 days with no one at the wheel to guide her. Captain Briggs, his family, and the crew of the vessel were never found, and the reason for the abandonment of the Mary Celeste has never been determined.
MARKET MINUTE
Stocks Move Higher
The stock market digested November’s robust gains for much of last week but rallied strongly amid falling bond yields on the last trading day. Market sentiment remained positive as the Fed’s preferred measure of inflation showed ongoing signs of softening inflation pressures, boosting hopes that the Fed may be able to end its rate hikes and consider rate cuts sometime next year. Investors also welcomed news of solid spending in early holiday sales reports. The declines in bond yields reflect that the financial markets are positioning for a rate cut soon, even brushing off Fed Chair Powell’s Friday comments suggesting it was premature to consider monetary loosening.
Inflation Eases
The Personal Consumption Expenditures Price index (PCE)–the Fed’s preferred measure of inflation–was released last week, showing core PCE (excludes energy and food) rose 0.2% in October and 3.5% from a year ago. Both were lower than September’s readings of 0.3% and 3.7%, respectively. Perhaps most notably, core prices rose at a 2.5% annualized rate over the last six months, close to the Fed’s target rate and a big improvement over the previous six-month annualized rate of 4.5% ending April. The report also reflected a slowdown in consumer spending, as October’s 0.2% increase was lower than September’s 0.7% gain, a possible indication of the impact of the resumption of student loan repayments, higher prices, and shrinking savings.
FINANCIAL STRATEGY OF THE WEEK
Debt Stress
The average American owes $59,580 in debt. Of that $59,580, $41,830 is from mortgage debt, $5,640 is from student loans, and $5,470 is from auto loans. Little wonder that money worries can be a major cause of stress.
The Link Between Stress and Health
Humans have an innate response called “flight or fight.” It is nature’s way of launching our bodies into action; consider the physical responses we feel during moments of stress—faster heartbeat, accelerated breathing, tightening of muscles, and increase in sweating. These are response mechanisms that prepared our ancestors to run from or confront danger on the savanna. But they can be less useful in more modern times. In the short term, stress can manifest itself in physical symptoms, such as headaches, fatigue, difficulty sleeping or concentrating, an upset stomach, and general irritability. These brief episodes of stress usually do not cause lasting harm to personal health.
However, debt—and the stress it causes—is often a persistent problem. If your stress system stays activated over longer periods of time, it can lead to serious health problems, such as weight gain, fatigue, anxiety, depression, headaches, and sleep problems.
Managing Stress and Debt
If you are experiencing debt-related stress, you should consider attacking the root of the problem. Generally, it takes time to work down debt, but that doesn’t mean you can’t manage the stress during the interim period. Developing a strategy to eliminate your debt is the first step to lowering stress since the sense of control that a strategy gives you might furnish you with hope and optimism. It’s also important that you keep your debt worries in perspective. Remind yourself that debt may not permanently ruin your life. Writing in a journal can be helpful as an outlet for the worried thoughts that can cycle endlessly through your mind. Seek social support—knowing that family and friends are in your corner can be a great source of strength.
Finally, find time for laughter and extending small kindnesses—each unleashes wonderfully positive chemical reactions that are good for the soul and the body.