THE WEEK ON WALL STREET
Stocks staged a choppy comeback last week as investors cheered positive earnings, led by mega-cap tech stocks. The rally came to pass despite fresh data showing a slowing economy and increasing inflationary pressures.
FACT OF THE WEEK
On April 27, 4977 B.C., the universe is created, according to German mathematician and astronomer Johannes Kepler, considered a founder of modern science. Kepler is best known for his theories explaining the motion of planets.
In 1609, Kepler published the first two of his three laws of planetary motion, which held that planets move around the sun in ellipses, not circles (as had been widely believed up to that time), and that planets speed up as they approach the sun and slow down as they move away. In 1619, he produced his third law, which used mathematic principles to relate the time a planet takes to orbit the sun to the average distance of the planet from the sun.
Kepler’s research was slow to gain widespread traction during his lifetime, but it later served as a key influence on the English mathematician Sir Isaac Newton (1643-1727) and his law of gravitational force. Additionally, Kepler did important work in the fields of optics, including demonstrating how the human eye works, and math. He died on November 15, 1630, in Regensburg, Germany. As for Kepler’s calculation about the universe’s birthday, scientists in the 20th century developed the Big Bang theory, which showed that his calculations were off by about 13.7 billion years.
MARKET MINUTE
Stocks Bounce Back. Twice.
Last week opened with a rebound rally as investors breathed a sigh of relief that Middle East tensions had eased. The market rally extended into Tuesday, with investors cheering positive corporate earnings reports. By Tuesday's market close, the S&P 500 had gained 2% for the week.
But investor enthusiasm didn't last, as midweek saw profit taking in all three averages. Rising bond yields threw a wet blanket on market momentum; at one point, the yield on the 10-year Treasury note rose more than 40 basis points from its low earlier in the week. On Thursday, markets slipped on two fresh pieces of economic data: a Gross Domestic Product (GDP) slowdown and higher consumer prices. But by midday, selling pressure slowed. Stocks pushed higher on Friday behind upbeat Q1 reports from two mega-cap tech stocks, helping the S&P 500 and the Nasdaq post their best week since November.
Earnings Vs. Inflation
Corporate earnings and economic reports battled it out last week. In the end, earnings won, at least for this week.
The big economic news was that Q1 GDP grew at a 1.6 percent annualized rate—slower than the 2.4 percent economists expected and less than Q4 2023. The GDP report seemed to support the Goldilocks economy theory—not too hot, but not too cool—a story investors have favored this year.
The PCE (personal consumption expenditures) Index, the Fed's preferred inflation gauge, was embedded within the GDP report. Excluding food and energy, it increased 2.8% from a year ago. It was unchanged from February and slightly higher than expected. It joined a growing list of factors pointing to an uptick in inflation, complicating the Fed’s interest rate decision.
FINANCIAL STRATEGY OF THE WEEK
Questions to Ask About Medicare
If you are new to Medicare, there are several questions you should consider while approaching or within your Initial Enrollment Period (IEP) or a Special Enrollment Period (SEP). Use this guide to consider your options when preparing to enroll in Medicare or after you have already enrolled.
What are the basics? Medicare is a complex program and can sometimes be confusing. The best place to start when you are new to Medicare is by familiarizing yourself with the differences between it and the health insurance you have now. Learn what makes a person Medicare-eligible, the different parts of Medicare insurance and what those parts cover, times to enroll in Medicare, and how putting off enrollment can result in penalties. These initial steps will help smooth the transition from your current insurance to Medicare once you are eligible.
What are your coverage options? Everyone has different healthcare needs, meaning the coverage that is right for your friends or family may not be right for you. Will you enroll in Original Medicare or would you prefer a Medicare Advantage Plan that may limit your provider networks or have different costs but that offers additional coverage? If you have current employer insurance, you may decide not to enroll in Medicare until you have retired. If you are already retired, you might find that Original Medicare plus retiree insurance works better for you than Original Medicare plus a Medigap (or vice versa). Find out the full range of your coverage options.
Should you enroll in Part D? While you should make sure you enroll in Part D prescription drug coverage when you become Medicare-eligible (assuming you do not have other creditable drug coverage), there are many Part D options for you to explore. Keep in mind, too, that sometimes retiree insurance offers prescription drug coverage that is as good as or better than Medicare Part D. If that is the case, you might decide not to take Part D because you are already covered. Finally, if you have difficulty affording your drug costs, you may want to consider applying for programs that can help pay these costs.
Are you eligible for programs that help lower Medicare costs? There are several programs for people with low incomes that help pay for Medicare-related costs, such as premiums and copays. Some of these programs are federal, while others are state-specific. Find out whether you meet the eligibility requirements and take full advantage.
Have a great week!