Hope you are all doing well. The three major U.S. stock indexes climbed more than 1% for the week, rebounding from the previous week’s slight pullback. The S&P 500 posted fractional gains of 0.4% or less each day of the trading week, slowly pushing its record level higher. The U.S. stock market closed out the third quarter with another monthly gain in September. The S&P 500 added 3.5% for the month; on a quarterly basis, the index gained 7.8%. As for other major indexes, the NASDAQ outperformed in September, climbing 5.6%, while the Dow added 1.9%. Amid the shutdown the price of Bitcoin rose sharply, 11% for the week, and gold climbed for the seventh consecutive week. Jane Goodall Institute, UN Messenger of Peace and world-renowned ethologist, conservationist, and humanitarian, passed away this week. I have broken down this week’s update using some of her notable quotes.
“The greatest danger to our future is apathy.” – Jane Goodall
Markets didn’t seem to care about the shutdown in Washington, that impacts so many of you. The U.S. government shutdown began on Wednesday after lawmakers failed to reach an agreement to extend funding. Among the functions that ground to a halt were the collection and release of economic data. Investors and U.S. Federal Reserve policymakers rely on that data to assess the economy. The most prominent report that wasn’t issued was Friday’s monthly jobs data from the Bureau of Labor Statistics. If you are retiring soon from the government, just retired or already retired you may be unsure of how the shutdown impacts you. The Office of Personnel Management (OPM) offered clarity and reassurance. OPM states that federal retirees under both CSRS and FERS will continue to receive their scheduled monthly annuity payments on the first business day of the month. If you are retiring later this year, the partial government shutdown (also known as a shutdown furlough per OPM’s guidance) is occurring during your highest earning years.
There’s no need to worry about its effect on retirement calculations. Employees who would have been in pay status but for the lapse in appropriations will receive retroactive pay once the shutdown ends. Therefore, the high-3 average pay, the basis for calculating retirement benefits, remains unaffected. Federal employees who would have retired during a shutdown should have their retirement made effective as of the date they requested once the shutdown concludes. OPM notes that this can be done as long as the employees submitted a notice of their desire to retire on or before the requested date. For those of you still employed, if your work is funded by means other than annual appropriations or is necessary to protect life, protect property or to deliver statutorily mandated benefits then you are exempted and must work. That work continues on the promise of delayed pay. All other employees are furloughed and guaranteed back pay when the government reopens. In its new memo, OMB told agencies to prepare furlough notices in addition to possible reduction in force (RIFs). I would not worry very much about RIFs at this point because many agencies have already lost significant staff through attrition and various incentives pushing workers out.
“Change happens by listening and then starting a dialogue with the people who are doing something you don’t believe is right. ” – Jane Goodall
Delegations from Hamas, Israel and the United States are headed to Egypt to try and finalize a Gaza ceasefire deal. The meeting comes after both warring sides agreed to move forward with a US proposal to end the nearly two-year conflict. President Trump is keeping pressure on both Israel and Hamas to move forward with the plan. Trump says Israel has agreed to an initial withdrawal line, and that a ceasefire would be “immediately effective” if Hamas also approves. If this deal happens that could be a good thing for markets as peace removes the uncertainty created by conflict.
“This is where I belong. This is what I came into this world to do.” – Jane Goodall
As this is a time of anxiety for many of you, I have opened up additional hours this week on my calendar. Please use my calendar link below and schedule a phone or zoom appointment. The calendar link allows you to schedule a call as early as the next day. If it has been a while since your last review, please schedule.
