Wednesday,
March 16, 2022
Market recap
Dow Jones
33,545.92
+600.68 (1.82%)
S&P 500
4,262.49
+89.38 (+2.14%)
Nasdaq
12,948.62
+367.40 (+2.92%)
Top Story
Dow Gains 600 Points and S&P Ends Three-Day Losing Streak, While Inflation Remains in Focus
• US stocks rose Tuesday as investors closely watched for the latest out of Ukraine, where peace talks continue amid Russia’s invasion. Meanwhile, oil prices moved lower and are now firmly below $100 per barrel. Several energy stocks fell, but a number of airline stocks saw share prices increase following strong sales guidance from many of the largest names in the industry.
• Inflation continues to weigh on the economy, with producer prices up 10% year-over-year in February. While the monthly reading came in a tick lower than what some analysts expected, the annual growth highlights the upward pressure on prices during the previous 12 months. In January the PPI showed a 9.7% rate of annual increase.
What to Be on the Lookout for Today
• The Federal Open Market Committee kicks off its two-day meeting. The central bank is expected to enact the first of several potential interest-rate hikes, which would be aimed at cooling off the economy amid rampant inflation. Specifically, the FOMC will make an announcement regarding any change to the Fed’s target rate, which is how banks and depository institutions determine what to charge when lending each other money. After that, Fed Chair Jerome Powell will give a press conference.
• European automaker BMW (BMWYY) will hand in its most recent report card. The company temporarily suspended production of vehicles as a result of Russia’s invasion, although some of that activity resumed last week. BMW also recalled over 917,000 vehicles after a potential electrical short and fire risk was identified in six of the German automaker’s models.
Credit History Length And Your Credit Score: What You Need to Know
You’re not born with a credit history; it has to be built over time.
Once good credit has been established, using it wisely and responsibly can offer flexibility and freedom. Lenders like to see that you’re an experienced, responsible credit user, which is why your length of credit history accounts for 15% of your credit score.
Lenders want to see accounts maintained in good standing for a long time. When debt accounts are closed, though, that history ends, and eventually closed accounts drop off the credit report entirely. A credit history looks better when it has a solid number of accounts in good standing that have been open for a long time.
One way to achieve this is to keep old credit cards open, even those not being used much anymore. Keeping these cards open, perhaps using them to automate a few bills like car insurance or a monthly subscription account, will signal that they are still very much in use. Paying them off on time and in full is still important to the health of a person’s credit. It might be wise to consider closing a card not being used regularly if the annual fees are so high that it isn’t worth it to keep the card open.
Track your credit score for free in the SoFi app, where the factors affecting your score are broken out to make them easier to understand.
A Few Headlines That Should Be on Your Radar
The number of Americans who bought a life insurance policy surged by 5% in 2021, which is the highest single-year increase since the 1980s. While the pandemic left many looking at ways to protect their family’s finances, there are several important things to consider. Advisors say while you need to focus on the policy’s premium and how the costs fit into your finances, the insurer’s reputation also needs to be scrutinized. Be prepared to answer a few questions when applying, and decide whether a whole-life or term policy is better for you. Read more >> Companies are sending out unfinished products these days, which sounds like a recipe for disaster. But for companies like Ford (F) it’s a way to get customers products that would otherwise be delayed even further. Generally speaking this is tied into the chip shortage that’s caused so many headaches for the auto industry over the past 12 months. Buyers may choose to give up certain features, some of which can be installed at a later date. Brand new homes are being sold with plywood where garage doors should be, as it can take months for new shipments to arrive. Read more >> Consumers are bracing for even higher prices as supply-chain and geopolitical troubles may limit the effectiveness of Fed rate hikes. From gas to groceries, everything seems to cost more these days. Inflation is the hot topic at the Federal Reserve’s meeting this week. Consumers will pay more for debt, but may see long-term benefits if Fed policy succeeds. Inflation reduces buying power, so even as wages increase, you still might find you can buy less with your income. Read more >> With gasoline and home heating oil prices surging since the Russian invasion of Ukraine, consumers are looking for ways to cut their gas bills. Consumers can save money on gas and heating oil expenses by embracing energy efficiency. Learn how you can help offset these costs amid the war in Ukraine. Read more >>Not-So-Breaking News
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Tesla (TSLA) raised its EV prices in both the US and China in response to inflationary pressures. This includes the rising cost of nickel, which is a major component of the batteries used in electric vehicles. The invasion of Ukraine is a factor, as Russia is the world’s third-largest nickel producer.
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American Airlines (AAL) delivered upbeat sales guidance for the rest of 2022, and expects the increase in revenue to outpace rising fuel prices and other costs. This echoes feedback from several other major airlines including Delta (DAL), Southwest (LUV), and JetBlue (JBLU) who said they expect sales to rise despite increased oil prices.
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Walmart (WMT) says it will hire 5,000 employees at tech hubs in Atlanta and Toronto. This includes software engineers, product managers, and data scientists. With the opening of these two new locations, Walmart now has 16 tech centers worldwide.
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In an unexpected move, AMC (AMC) announced it’s purchasing a 22% stake in a gold and silver mining company. The movie theater chain and former darling of the meme-stock craze says it can provide liquidity that Hycroft Mining Holding Corp. needs.
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Dublin-based fruit and vegetable distributor Dole (DOLE) reported $151.7 million in profit for 2021 on $9.29 billion in revenue. The company predicts revenue will increase in 2022 despite challenges tied to salad recalls and the ongoing Ukraine-Russia conflict.
Financial Planner Tip of the Day
“Life insurance isn’t necessarily a must-have for everyone. But if you have dependents or debt — or think you might someday — you may want to take a closer look at whether life insurance could be a financial tool to help protect your loved ones and your legacy.”
Brian Walsh, CFP® at SoFi