Thursday,
June 10, 2021

Market recap

Dow Jones

34,447

-152.68 (-0.44%)

S&P 500

4,219.55

-7.71 (-0.18%)

Nasdaq

13,911.75

-13.16 (-0.09%)

Google

$2,407.94

+$9.50 (+0.40%)

Facebook

$330.25

-$3.43 (-1.03%)

Lordstown Motors

$11.23

+$0.01 (+0.09%)

Amid evolving news surrounding COVID-19 and the economic reopening, your financial needs are our top priority. For more information,click here.

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Top Story

Holograms Slowly Become New Workplace Tool

Google, WeWork, Microsoft Chase Holograms

Google (GOOGL), WeWork, and Microsoft (MSFT) are among the large tech companies that want to bring holograms to the workplace. Betting virtual workers are sick of Zoom (ZM) calls and would prefer a three-dimensional image of coworkers, they are stepping up their efforts.

Bringing holograms to the masses has failed to take off so far, largely because of the expense associated with the technology. Nevertheless, the companies entering the sector say holograms, and the necessary technology to support them, will soon be commonplace in conference rooms across the globe. The tech companies had been working on 3D representations of people prior to the pandemic, but the shift to remote work prompted them to accelerate development.

Holograms Coming to an Office Near You

Shared office space company WeWork recently inked a partnership with hologram tech company ARHT Media (ARHTF) to equip 100 WeWork offices with hologram technology. The results of the partnership are rolling out this month in New York, Los Angeles, and Miami. The goal is to have holograms in buildings in 16 locations across the globe.

Meanwhile Google announced Project Starline in May, which combines computer vision, machine learning, spatial audio, and hardware to take video conferencing to the 3D level. Project Starline is being used only in Google offices, but the internet search giant plans to begin testing it with enterprise partners later this year. Microsoft Mesh, which the software company announced in March, delivers 3D images of people and content in smart glasses and other devices.

Not for Everyone

Tech companies have high hopes for holograms, but they may not be well suited for every business interaction. At least in the early stages, the technology may work best for recorded events rather than live ones. With the latter, the complexity and logistics required could prove too much to overcome. As the cost decreases and the technology improves, that may change.

Holograms promise to improve on telephone and video conferencing, giving people the ability to read body language and catch cues that otherwise go unnoticed. Google, WeWork, and Microsoft are making big bets that remote work is here to stay and that holograms will play a role in that shift. It will be interesting to watch how the technology and the market advance.

How Does a Late Payment Affect Your Credit Score?

One of the purposes of a credit score is to show lenders how likely you are to repay your debts. Payment history is 35% of your credit score, so making payments on time and in full each month is crucial.

Even if your credit history is pristine, it only takes one report of 30 days past due to change your score. Whether you were short on cash or simply forgot to make the payment, the FICO® algorithm doesn’t distinguish—and the result is the same.

Once a late payment is reported to the credit bureaus, it could remain on your credit report for up to seven years.

Set up SoFi Relay to get payment reminders on your recurring expenses, track your credit score, and more—all in one app.


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Liz Looks at: Small Businesses

A Weekly Column With Liz Young

Every week, SoFi’s Head of Investment Strategy shares her economic and market insights in order to help empower readers to take a more active role in their financial futures. This week, see what Liz has to say about small business optimism.

Small But Mighty

It likely comes as no surprise that small businesses are a critical part of the US economy. They are responsible for more than 40% of our nation’s GDP and they employ close to 50% of the private (non-government) labor force.

Although there are plenty of economic statistics to watch, many of which I’ve covered in previous columns or will cover in future ones, the statistics surrounding small businesses are at the top of my priority list.

This week, the National Federation of Independent Businesses (NFIB) released data from its Small Business Optimism Index, and the numbers caught my attention. The index level came in at 99.6 vs. expectations of 101.0. Though it’s a miss, it’s narrow—and not terribly concerning. The index, after all, is still markedly higher than it was at the start of the year.

The Stat That Gave Me Pause

What gave me pause then was the data around hiring. A record 48% of small business owners reported unfilled job openings, and 93% of those businesses reported finding few or no qualified applicants. Yet 27% of small businesses plan to create more jobs in the next three months. Unless there is a flood of qualified applicants who suddenly enter the labor force, the gap will widen.

It’s true that it’s better to be creating jobs than losing jobs. What concerns me is that if small businesses can’t find workers to fill the spots, they can’t reopen to full capacity. They can’t meet the demand without sacrificing quality or service to do so. That could limit revenue and in turn, limit private sector growth and the private sector’s contribution to GDP.

The Bottom Line

This recovery has been predicated on reopening the economy and the growth that will result. Labor market health has a large impact on growth potential and, I’m guessing, is mainly why the Federal Reserve continues to watch labor data so closely. If its goal is to stimulate growth to a point where policy support is no longer necessary, the Fed knows we need the labor market to create durable growth, not a flash in the pan.

The stock market seems optimistic that small businesses have a bright future, with the small-cap Russell 2000 index up 18.6% YTD while the S&P 500 is up only 12.7%. I mostly agree with the positive sentiment and believe that small businesses can drive us out of this and come roaring back. We just need the labor market to roar back with them.

-Liz Young, Head of Investment Strategy at SoFi

Summer Prices Bust Travel Budgets

Prices Surging Amid Pent-Up Demand

Summer travel is in full swing as consumers venture out after more than a year of pandemic shutdowns and restrictions. What they are finding is that prices on everything from rental cars to accommodations are skyrocketing. Take car rentals in popular domestic vacation spots as an example: prices are up 300%. Meanwhile the average price for vacation rental homes is up 70%.

The price surges are not entirely surprising. With the pandemic easing, people want to get out again and are willing to pay more to escape. Problems arise, however, when they bust their budget in the pursuit of making up for lost time. The good news: there are ways to prevent breaking the bank.

Consider the Tradeoffs

Many Americans have been able to save more money during the pandemic thanks to stimulus checks and reduced costs on childcare, commuting, and entertainment. That does not mean all savings should be put toward a vacation. A better choice is to set a budget considering the costs beyond flight, car rental, and accommodations. That gives travelers a clearer picture of the total outlays for the trip.

It is also important to weigh the price tradeoffs when planning a vacation. Some people may prefer to stay at a high-end hotel for a shorter period while others prefer cheap lodging for a longer time. Without considering tradeoffs, it is easy to overspend. Timing is also important. Prices are surging but they could come down later in the year. For travelers who can postpone their trip, they may save more.

Leverage Reward Points

How travelers pay for their trips can also prevent overspending. Using travel rewards can be advantageous. Consumers should resist the urge to use emergency savings for a summer trip. It is important in the post-pandemic era to have a rainy day fund at the ready.

Vacationing is in the cards for many Americans, but that does not mean they have to overpay to get some rest and relaxation. Following the above tips can help prevent that from happening.

Not-So-Breaking News

  • Facebook (FB) is going after the creator economy, aiming to help people make money from its host of apps. As part of this effort, the social media giant is encouraging companies and creators to use offline transactions to prevent Apple (AAPL) from taking a 30% cut of in-app purchases. The comments by Instagram head Adam Mosseri on Wednesday add to the growing feud between the two major tech companies.
  • Electric truck startup Lordstown Motors (RIDE) warned it could go under in the next year if it does not get a cash infusion soon. The company said it does not have enough cash to start commercial production of its EV truck.
  • El Salvador became the first nation to accept bitcoin as a legal tender after its Congress voted in favor of legalizing the cryptocurrency. Now prices can be shown in bitcoin and people can pay their taxes with the cryptocurrency. Exchanges in bitcoin will not be subject to capital gains tax either. The news sent bitcoin’s price higher.
  • Royal Dutch Shell (RDSA) is speeding up its goal to cut carbon emissions on the heels of a ruling by a Dutch court. In the landmark decision, the court gave Shell until 2030 to slash its greenhouse gas emissions by 45% from 2019 levels. While Shell is appealing the ruling it is also accelerating its clean energy plans.
  • Target (TGT) is raising its annual dividend payout as part of the retailer’s commitment to deploy capital to shareholders. The annual dividend is going to $0.90 per share from $0.68 per share. Target’s dividend payout is now at the same level as rival Walmart (WMT).
  • Creating a personal budget isn’t easy—but when you’ve got specific goals in mind, it can go much more smoothly. Learn about short-term and long-term financial goals, plus ways to create small victories along the way.

Financial Planner Tip of the Day

“Payment history makes a bigger impact on a person’s credit score than anything else. A borrower’s credit score summarizes their health and strength as a borrower, and payment history makes up 35% of that score. So the most important rule of credit is this: Don’t miss payments. Timely payments are crucial, and making at least the minimum payment on a revolving credit line can make a positive impact on a person’s credit score.”

Brian Walsh, CFP® at SoFi

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