by Peter R. Wechsler
President & Co-Founder
[email protected]
It has been a crazy week in the markets, starting last Friday when the president announced new 100% tariffs on China after China announced rare earth restrictions. As I write this on Wednesday, at 10 a.m. the S&P was up 1.6% but by 1:15 p.m. it was down 1% on the day. It’s now 3:30 on Wednesday afternoon and the S&P is up 0.4%. Another roller coaster day on Wall Street!
Over the past five days, the S&P is down 1.1% while month-to-date it’s down a half percent. Aside from these numbers, investors are jittery. Between the government shutdown, tariff troubles, inflation, possible Fed rate cuts, China, and Gaza, there is plenty on investors’ minds. Oh, and to add a little more uncertainty, many companies will report quarterly earnings starting next week.
The concern with corporate profits for many companies are the tariffs. Some manufacturers and retailers passed along price increases to consumers so their profits won’t really be affected. But other companies are eating the tariffs, which could lower their profits and ultimately lower their stock price if investors want to sell the stock.
With all the uncertainty right now, we may continue to ride the roller coaster. With some luck, the markets will quiet down and—before we know it—maybe a Santa Claus rally. Who knows?
Social Security COLA Update
With the government shut down, the folks at the Bureau of Labor Statistics (BLS) aren’t working, so all kinds of reports that come from the BLS are behind schedule. The cost-of-living adjustment was to be released on October 15th, but it has been delayed. I’m not sure when the numbers will be released, but one report said October 24th. We’ll see. As of now, it looks like there will be an increase around 2.7% or 2.8%.
According to what I’ve read, the minimum Medicare amount to come out of your Social Security check is $206 a month, up from $185 this year. There goes part of your cost-of-living increase. Oh well…
The Government Shutdown and Obamacare
As the shutdown drags on, the list of people to blame grows longer. Democrats are continuing to receive heat as they work to protect the Affordable Care Act (ACA) aka Obamacare. In Pennsylvania, the ACA is Pennie. The Republicans want to end the emergency subsidies granted during COVID that has kept ACA premiums affordable and allowed many Americans to continue receiving health insurance. The Dems are fighting to keep said funding.
There are talks about ACA premiums going up 30%, 50%, or even higher without the emergency subsidies. If that were to happen, many people would need to drop their ACA insurance as they can’t afford the premiums. Then when these folks get sick, they’ll just go to the emergency room for treatment. Who pays for this? We all do as hospitals will need to raise their prices, costing insurance companies more money. And what happens when your work’s group insurer pays more for your care? They raise the premiums for you and your employer.
The pressure is on the Democrats as they are the minority party, and if they give in the subsidies will be rolled back. Hopefully, we can get the government back open quickly as many millions of people are suffering.
That’s enough for one column. Sorry I went so long. Enjoy the weekend. Maybe we’ll see a Birds win…
Peter