THE WEEK ON WALL STREET
Stocks steadily advanced over the holiday week thanks to strength in mega-cap tech issues and encouraging jobs data. The S&P 500 Index rose 1.95 percent, while the Nasdaq Composite Index added 3.50 percent. The Dow Jones Industrial Average edged up a modest 0.66 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, rose 2.30 percent for the week through Thursday’s close.
FACT OF THE WEEK
“This here ain’t no protest song or anything like that, ’cause I don’t write no protest songs.” That was how Bob Dylan introduced one of the most eloquent protest songs ever written when he first performed it publicly. It was the spring of his first full year in New York City, and he was onstage at Gerde’s Folk City in Greenwich Village, talking about a song he claims to have written in just 10 minutes: “Blowin’ In The Wind.” A few weeks later, on July 9, 1962, Dylan walked into a studio and recorded the song that would make him a star.
Dylan’s recording of “Blowin’ In The Wind” would first be released nearly a full year later, on his breakthrough album, The Freewheelin’ Bob Dylan. This was not the version of the song that most people would first hear, however. That honor went to the cover version by Peter, Paul and Mary—a version that not only became a smash hit on the pop charts, but also transformed what Dylan would later call “just another song” into the unofficial anthem of the civil rights movement.
MARKET MINUTE
Nasdaq, S&P Extend Runs
ADP’s employment report on Wednesday showed private-sector employers added 150,000 jobs in June—slightly slower than May’s pace—adding to investor hopes that a slowing economy may prompt the Fed to adjust short-term rates as early as September. The Nasdaq and the S&P hit their 23rd and 33rd record closes, respectively, for the year.
Friday morning’s jobs report from the Labor Department showed 206,000 jobs added last month, which also suggested a strong-but-cooling economy. News of slower job growth, slowing wage growth, and a slight uptick in unemployment helped drive down Treasury yields, and stocks finished the short week with a strong rally. The Nasdaq and S&P both closed at all-time highs on Friday.
Still Catching Up?
Driving much of the job growth in last week's reports was a post-pandemic catchup effect: sectors such as healthcare and leisure/hospitality showed they are still recovering. The private-sector jobs data and the Labor Department report painted a similar picture of an economy creating jobs but at a slower rate than in the past.
FINANCIAL STRATEGY OF THE WEEK
How Retirement Spending Changes With Time
New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? This concern may be legitimate. Some households "live it up" and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much.
By The Numbers
The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of $70,570 per year for households headed by pre-retirees, Americans age 55-64. That figure drops to $52,141 for households headed by people age 65 and older. For people age 75 and older, that number drops even further to $45,820.
Spending Pattern
Some suggest that retirement spending is best depicted by a U-shaped graph -- It rises, then falls, then increases quickly due to medical expenses.
But a study by the investment firm BlackRock found that retiree spending declined very slightly over time. Also, medical expenses only spiked for a small percentage of retirees in the last two years of their lives.
What's the best course for you? Your spending pattern will depend on your personal choices as you enter retirement. A carefully designed strategy can help you be prepared and enjoy your retirement years.