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Fear of Rising Rates Outweighs Strong Earnings Reports
• US stocks fell Wednesday. The fear of rising rates outweighed robust earnings reports from a handful of big companies. The US 10-year Treasury yield surpassed 1.9%, which marks the highest level since December 2019. Although Bank of America and Morgan Stanley announced earnings that surprised on the upside, investors were more focused on how rising bond yields are weighing on equities.
• Most of the economic data Wednesday revolved around the real estate sector. New residential building permits in December jumped 9.1% month over month. Meanwhile, housing starts advanced 1.4% from this time last year. Rising material costs and labor shortages are still headwinds for builders.
What to Be on the Lookout for Today
• Both initial unemployment claims and continuing jobless claims are due, as well as December’s existing home sales. Another 230,000 people filed initial jobless claims last week — the highest number since mid-November 2021.
• Streaming giant Netflix (NFLX) will report Q4 earnings. The stock grew more slowly in early 2021 compared to 2020, which executives attribute to a major demand explosion during initial COVID-19 lockdowns. In Q3 2021, the company posted its largest number of new subscribers since the end of Q4 2020. Analysts want to know what’s next for Netflix amid an increasingly crowded streaming market, and what many hope is a return to normal as the pandemic wanes and more people venture out of their homes.
When Will You Pay Off Your Student Loans?
Making payments on your student loans can seem endless. And with high interest rates, the day you finally pay off your debt might be farther away than you think. Use this calculator to get an idea of when your loan payoff date will be — and ways to make that date not so far away afterall.
A Few Headlines That Should Be on Your Radar
Senate lawmakers are considering legislation aiming to limit Big Tech’s market power, but an intense lobbying effort continues in opposition. Some smaller tech companies are in favor of the legislation, saying it will boost competition and innovation. Other small businesses worry it could end up costing them more for common services. It’s not yet clear how the bipartisan package of bills will ultimately fare. Read more >> Wash, rinse, repeat. Since the market bottom on March 23, 2020, Nasdaq dip buyers have swept in well above the 200-day moving average level and succeeded in making the index look invincibly buoyant. This year is different. In this week’s column, see what SoFi’s Head of Investment Strategy has to say about the market shakedown. Read more >> Credit card users could soon pay more on their monthly bill as interest rates are set to rise. The Federal Reserve is expected to increase interest rates this year as many as four times, looking to tamp down inflation and cool off the economy. Analysts note this will mean higher monthly interest payments for anyone carrying a balance, and it could thus be a good time to review corresponding options. Read more >> There’s no one simple formula to determine whether or not going back to school is worth the cost, but these questions may help you make your own judgment. When thinking of going back to school it’s important to consider your career goals, past career experiences and what you hope to gain out of more education. Think of how the degree or certificate may improve career mobility or increase your earning potential. Then factor in how much the program will cost and how you’ll pay for the costs. Read more >>Not-So-Breaking News
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Canadian password management company 1Password is being valued at $6.8 billion following its series C funding round. Executives say the platform eases the tension between security and convenience. The company plans to use this new funding to double the size of its workforce.
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So-called “activist investors” are targeting retailer Kohl's (KSS) for the second time in the past two months. A New York-based investment firm claiming to own 5% of the Wisconsin company is demanding changes. Meanwhile, Macy's (M) and Dollar Tree (DLTR) have dealt with similar incidents.
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Ford (F) says it added $8.2 billion to its bottom line during Q4 2021 thanks to past investments made into electric car maker Rivian (RIVN). Formal earnings are due early next month. The automaker invested $500 million in Rivian in 2019 and owns a 12% stake in the EV company.
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Orange juice prices are soaring as growers deal with citrus disease and bad weather both in the US and abroad. Demand for OJ went up during the pandemic after declining for years. Now, analysts say this year’s orange crop could be the smallest since WW2.
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Procter & Gamble (PG) beat Wall Street expectations yesterday in posting its fiscal second-quarter earnings and revenue. The company also increased its outlook for sales growth but signaled rising costs will negatively impact the bottom line for fiscal 2022, mostly tied into freight and commodities.
Financial Planner Tip of the Day
"It may be difficult to tackle your debt efficiently if you don’t actually know how much you currently owe and what the terms are. The first recommended step is to track exactly what you need to pay back. You can start with a simple spreadsheet, or try a budgeting app like SoFi Relay to help track your spending."
Brian Walsh, CFP® at SoFi