July 13, 2021

Market recap

Dow Jones


+126.02 (+0.36%)

S&P 500


+15.08 (+0.35%)



+31.32 (+0.21%)

Lululemon Athletica


-$8.51 (-2.25%)

Dollar Tree


-$0.56 (-0.56%)

Virgin Galactic


-$8.51 (-17.30%)

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


Top Story

Retailers Embrace Social Commerce

TikTok Fuels Viral Apparel Sensations

From Lululemon Athletica (LULU) to Zara (IDEXY), retailers are embracing TikTok to create buzz and sell more apparel. The strategy appears to be paying off. TikTok, which is owned by parent company ByteDance, has become the destination for teens and young adults to find fashion inspiration and items to purchase. That has resulted in items going viral and selling out. These items have included a Lululemon skort, a pair of Aerie (AEO) leggings, and other items.

TikTok’s searchable hashtags and its lineup of influencers with millions of followers make it easy for a product to go viral. It does not hurt that the app has more than one billion active users. Many of these users are teenagers—a demographic which spends an average of 12 hours per week on social media apps.

Gap Invests in Social Commerce

Gen Z is known for craving authenticity in the products they wear. They also tend to seek input from others, which is one of the reasons why TikTok has been so effective for retailers. Products tend to go viral more quickly on TikTok than on Facebook’s (FB) Instagram or other social media platforms.

That was the case for a vintage Gap (GPS) hoodie which made an appearance in an influencer’s TikTok video earlier this year. That drove the price of the hoodie on resale sites to as much as $300 and prompted Gap to send the TikToker hoodies in different colors. The company also manufactured a fresh batch of brown logo hoodies which are available for presale and will ship this fall.

Social Commerce Poised for Growth

While teens are leading the charge in purchasing apparel based on TikTok videos, social media is influencing purchasing decisions for all generations. Social commerce sales are forecast to reach $36.62 billion this year—up 35.8% year-over-year. TikTok is driving a lot of that but so are Facebook, Instagram, and other social media apps. In some other countries around the world, social commerce has even more influence than in the US. For example, in China in 2021 social commerce is expected to earn more than $350 billion.

Social media has become a part of our daily lives. Retailers are beginning to understand the power of social commerce and it is taking off in the US. It will be interesting to see how this trend will impact the tech industry.

What You Need to Know About Student Loans, Grants, and Scholarships

Very simply put, a loan is money borrowed that has to be paid back (usually with interest). You can take out a loan from a friend, a family member, a bank, an online lender, a college or university, or the state or federal government.

A grant can be beneficial to students because it is financial aid that does not have to be repaid. Grants may be obtained directly from your university, the federal government, state government, or a private or nonprofit organization. It is important to note that you may be required to meet certain financial eligibility criteria, depending on the grant.

Scholarships are a great way to finance higher education because there are thousands of available scholarships based on financial need or merit. Scholarships can come from a variety of sources and typically do not need to be repaid.

Depending on where your school is, you have different options when it comes to getting the money you need to pay for school. Check out this state-by-state guide to get more information on what scholarships and grants may be available to you.


Dollar Tree Keeps Prices Low Despite Inflation

Dollar Tree’s Strategy

Inflation is driving up prices for everything from food to clothing. In spite of this trend, Dollar Tree (DLTR) is committed to keeping most items in its stores priced at $1 as it has for more than 30 years. That commitment may prove challenging given supply-chain issues and other difficulties as the economy recovers from the COVID-19 pandemic.

With demand surging and manufacturing costs rising, consumer goods companies including Procter & Gamble (PG) and General Mills (GIS) are passing the increased costs on to consumers. Dollar Tree has decided not to raise prices for its customers. The company wants to continue to find ways to purchase goods for about 43 cents each and then sell them for $1.

Dollar Tree Leverages In-House Brands

Most of the products on Dollar Tree store shelves are the company’s own brands. This gives Dollar Tree more flexibility in terms of pricing. During the pandemic, Dollar Tree moved to small, cheaper packaging for its metal over-the-door hangers, which reduced costs. It also began selling gift bags in packages of 72 instead of 24 to reduce shipping costs. Dollar Tree was even able to change the size and number of eggs in cartons to reduce costs.

Dollar Tree is also testing selling higher-priced products in its stores including basketballs and pillows which cost between $3 and $5. It is also creating so-called combination stores which house both a Dollar Tree and Family Dollar. The latter sells products in a variety of price ranges.

Investors Weigh In

Dollar Tree is confident it can maintain its low prices despite inflation, but investors aren’t so sure. Since Dollar Tree went public more than two decades ago, it has been operating in a low-inflation environment.

Now the company has to deal with rising prices from its suppliers as well as increasing labor costs. Launching higher-priced items is not expected to offset the increased labor costs and other rising expenses. This has caused some investors to raise concerns, but for now Dollar Tree is committed to its plan to keep prices low.

Student Loan Moratorium is Scheduled to End—Here are Ways to Prepare

Lawmakers and Activists Want Student Loan Debt Pause Extended

The moratorium on paying back federal student loan debt comes to an end on October 1, which means borrowers will have to begin repaying their student debt again. But lawmakers, economists, and nonprofits are concerned that there will be an increase in missed payments and delinquencies.

More than one in four student loans were either in delinquency or in default prior to the pandemic. The COVID-19 pandemic made it even more difficult for millions of people to pay back loans. The looming deadline is prompting some legislators, including Senators Elizabeth Warren of Massachusetts and Patty Murray of Washington, to call on the White House to extend the deadline until sometime in 2022.

White House Considers Extending the Deadline

Lawmakers are not alone in urging the Biden administration to extend the moratorium on paying student loans and accruing interest on the debt. Over 120 organizations including the National Consumer Law Center, the Consumer Federation of America, and the American Civil Liberties Union have asked the White House to keep the moratorium in place until it can fix the student loan system and federal student loan debt.

Education Secretary Dr. Miguel Cardona said he and his team are considering extending the moratorium. Some believe the pause will last through the end of 2021, which would give borrowers more time. But if unemployment continues to decline, the White House may not have as much motivation to extend the moratorium.

Preparing for Payments to Restart

Student-loan borrowers should expect to receive notice from their loan servicers about when their payments will restart during August, as laid out in the CARES Act. Financial advisors say to make sure contact information is up to date with loan servicers and to consider using autopay to prevent any missed payments. If the White House does extend the deadline, it will give borrowers more time before they need to start making payments.

As of now, borrowers should be prepared for the moratorium to end on October 1. Even if the deadline is extended, the pause will come to an end eventually, which means borrowers should begin preparing to make student loan payments again.

Not-So-Breaking News

  • The Department of Education is forgiving $55.6 million in student loan debt for students who fell victim to a for-profit college scam. About 1,800 students who attended for-profit schools including Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute, won’t have to pay back their debt.
  • Virgin Galactic (SPCE) shares were under pressure Monday after the company filed to sell as many as $500 million shares. Virgin Galactic is selling stock after its founder, Sir Richard Branson, completed a successful test flight over the weekend.
  • Nordstrom (JWN) is buying minority stakes in Topshop, Topman, Miss Selfridge, and HIIT, four UK apparel companies. The retailer is targeting consumers in their 20s with these investments.
  • TikTok’s parent company ByteDance is no longer planning to list in the US or Hong Kong. The Chinese firm scrapped plans for an IPO after being told it needs to improve data security for its popular short video app.
  • Private equity firm CVC Capital Partners is buying a minority stake in Aleph, a digital advertising company. CVC is paying $470 million for the stake, giving Aleph a valuation of about $2 billion.
  • The hefty price tag that comes with college can be daunting. In this post, we are giving tips on paying for college if you didn’t get enough financial aid.

Financial Planner Tip of the Day

"Start researching scholarships early, because gathering the required documents and information to apply could take time and early deadlines are common for large awards."

Brian Walsh, CFP® at SoFi

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