Top Story
US Stocks Rose Tuesday, Inflation Top Concern For Small Business
• US stocks rose Tuesday as the market looked to shake off Monday’s sluggish start to the week. The majority of S&P 500 companies that have posted earnings have beat analyst expectations, but issued weaker-than-expected guidance. Until Thursday’s inflation data is released, corporate earnings and geopolitical tensions between Russia and Ukraine will likely be the focus.
• The US Census Bureau reported December’s federal trade balance. It came in at a deficit of $80.7 billion, after economists had predicted a $82.8 billion shortfall. The NFIB’s small business index for January was also released, showing inflation remains the biggest concern among small business owners. The index is down 1.8% from December.
What to Be on the Lookout for Today
• The US Census Bureau reports the revised number for December’s wholesale inventories. The original figure showed a 2.1% increase from November to December. That’s a year-over-year increase of 18.3%. Market observers say this shows sellers loaded up on supplies during the holiday shopping season.
• The Walt Disney Company (DIS) will post its most recent quarterly earnings. Investors will listen closely to what company executives have to say as shares of the blue-chip stock have sold off recently. Analysts say the growth of its streaming platform Disney+ and the recovery of company theme parks are especially important moving forward.
Understanding Stock Volatility
Conversations about the stock market seem to be intrinsically tied to comments about its volatility. The choppy nature of share prices can be intimidating to some investors — especially those who are just beginning to invest, nearing retirement, or have been burned by volatility in the past.
Stocks are considered to be an important part of an investment portfolio, and they can be a tremendous source of wealth building for investors. And while there are some lower volatility equities vs. higher volatility ones, it’s undeniable that they are a turbulent asset class.
That’s why understanding volatility is key to being a good stock investor. Join us to learn investing tips and tricks for investing in a volatile market from SoFi Financial Planner, Brian Walsh.
Claim your spot for this free event!
A Few Headlines That Should Be on Your Radar
Peloton is planning to layoff 2,800 employees and co-founder John Foley has announced he will step down as the company faces struggles. The at-home fitness equipment maker’s incoming CEO says Peloton (PTON) grew too fast under the assumption that pandemic trends were the “new normal.” With gyms filling back up again and lockdowns in the rearview, subscriber growth has slowed and executives want to cut costs. Read more >> Investors are increasingly eyeing dividend stocks in response to widespread market volatility and uncertainty regarding inflation. Analysts say traders are pivoting away from growth-oriented stocks as the Fed plans to hike interest rates in response to rampant inflation. Some believe this makes dividend stocks more attractive given they pay shareholders cash on an annual basis. Still, rising bond yields could eventually change investors’ attitudes toward equities overall. Read more >> Chip-maker NVIDIA will no longer be purchasing Arm Holdings from Japan’s SoftBank after regulators and competitors alike objected to the deal. Industry observers identify Arm as one of the most important “behind the scenes” companies in the chip business. Regulators sued to block the deal claiming it would have given NVIDIA (NVDA) control over semiconductor designs and affiliated technology. SoftBank (SFTBY) now plans to take Arm public. Read more >> Volatility is unavoidable, but there are things investors can do to minimize the impact to their portfolio when trading stocks. Navigating volatility as an investor means understanding different market sectors. Learn how volatility investing works and which sectors to target. Read more >>Not-So-Breaking News
-
Drugmaker Pfizer (PFE) is predicting $32 billion in COVID-19 vaccine sales this year, with another $22 billion in sales expected from its new antiviral coronavirus pill Paxlovid. That said, the company posted a mixed quarterly report that beat on earnings but missed on revenue.
-
Amazon (AMZN) has begun the nationwide rollout of its telehealth service that’s being called “Amazon Care.” What started as a pilot program for employees in the Seattle area several years ago is now expanding, offering a number of virtual and in-person care options.
-
Motorcycle maker Harley-Davidson (HOG) beat analyst expectations on both top and bottom lines with executives crediting higher motorcycle prices as well as fewer shipping delays. Two years ago the company started focusing on leaving unprofitable markets and trimming inventory.
-
American Express (AXP) is launching a zero-fee digital checking account that earns interest and includes a rewards program. Called Amex Rewards Checking, every $2 in purchases earns 1 reward point, while the annual yield on balances is 0.50%.
-
British oil giant BP (BP) recorded its highest profit in eight years during 2021 amid rising oil prices worldwide. Following a net loss in 2020, last year's annual profit of $12.85 billion is likely to spur calls for higher taxes on UK energy companies, according to market observers.
Financial Planner Tip of the Day
"A well diversified portfolio helps maximize the expected return for a given level of risk. It also helps smooth returns over time compared to the drastic swings of investing in one or two riskier investments."
Brian Walsh, CFP® at SoFi