THE WEEK ON WALL STREET
Stocks Snap Winning Streak
Markets were quiet Monday but opened lower Tuesday in response to the January inflation report that showed higher-than-expected consumer prices. But stocks regained some momentum on Wednesday and rallied Thursday despite disappointing reports on both retail sales and industrial production for January.
News of higher-than-expected wholesale prices on Friday put investors back on edge and kept stocks from ending the week on a positive note. The weekly loss broke a five-week winning streak.
FACT OF THE WEEK
The technology that made the modern music business possible came into existence in the New Jersey laboratory where Thomas Edison created the first device to both record sound and play it back. He was awarded U.S. Patent No. 200,521 for his invention—the phonograph—on February 19, 1878.
Edison’s invention came about as spin-off from his ongoing work in telephony and telegraphy. In an effort to facilitate the repeated transmission of a single telegraph message, Edison devised a method for capturing a passage of Morse code as a sequence of indentations on a spool of paper. Reasoning that a similar feat could be accomplished for the telephone, Edison devised a system that transferred the vibrations of a diaphragm—i.e., sound—to an embossing point and then mechanically onto an impressionable medium—paraffin paper at first, and then a spinning, tin-foil wrapped cylinder as he refined his concept. Edison and his mechanic, John Kreusi, worked on the invention through the autumn of 1877 and quickly had a working model ready for demonstration.
The December 22, 1877, issue of Scientific American reported that “Mr. Thomas A. Edison recently came into this office, placed a little machine on our desk, turned a crank, and the machine inquired as to our health, asked how we liked the phonograph, informed us that it was very well, and bid us a cordial good night.”
The patent awarded to Edison on February 19, 1878, specified a particular method—embossing—for capturing sound on tin-foil-covered cylinders. The next critical improvement in recording technology came courtesy of Edison’s competitor in the race to develop the telephone, Alexander Graham Bell. His newly established Bell Labs developed a phonograph based on the engraving of a wax cylinder, a significant improvement that led directly to the successful commercialization of recorded music in the 1890s and lent a vocabulary to the recording business—e.g., “cutting” records and “spinning wax”—that has long outlived the technology on which it was based.
MARKET MINUTE
Inflated Perspective
Consumer Price Index data was one of the big pieces of news driving markets last week, with January’s numbers coming in at 3.1 percent compared to a year prior—cooler than December's 3.4 percent year-over-year gain but warmer than the 2.9 percent consensus. Jittery Investors focused on the hotter-than-expected part.
With the consumer report closely followed by disappointing inflation news on the producer level, attention quickly shifted to the Fed and what’s next for interest rates. While the Fed has indicated short-term rates may trend lower in 2024, the January inflation reports support Fed Chair Powell’s recent comments that the Fed is in no hurry to cut rates.
FINANCIAL STRATEGY OF THE WEEK
Putting a Price Tag On Your Health
We hear over and over again how important it is to maintain a healthy lifestyle. But being healthy for its own sake isn't easy—especially when you're facing down temptation or battling procrastination. For some, the monetary benefits of a healthy lifestyle may offer helpful incentives.
Being healthy not only makes you feel good, but it may also help you financially. For example, one study found a steep increase in annual medical expenditures for individuals whose Body Mass Index was above 30.
If you're wondering how your health habits might be affecting your bottom line, consider the following:
- Regular preventative care can help reduce potential healthcare costs. Even minor illnesses can lead to missed work, missed opportunities, and potentially lost wages. Serious illnesses often involve major costs like hospital stays, medical equipment, and doctor's fees.
- Individuals can lower dental costs by receiving regular checkups and performing basic preventative care.
- When poor health persists over time, lost earnings may make it harder to save for retirement.
- Some habits that lead to poor health can be expensive in themselves. Smoking is a classic example. Smokers also pay higher premiums for health care and life insurance, and their houses, cars, and other possessions tend to devalue at a quicker rate because of damage from smoking. The total economic cost of smoking is more than $600 billion a year, including nearly $240 billion in direct medical care for adults.
- Obesity is another expensive condition that affects many Americans. In fact, obese adults spend $1,861 more per year on direct healthcare costs than adults with a healthy weight.
By focusing on your health, eliminating harmful habits, and employing preventative care, you may be able to improve your self-confidence and quality of life. You may also be able to reduce expenses, enjoy more of your money, and boost your overall financial health.