Thursday,
March 17, 2022
Market recap
Dow Jones
34063.56
+519.22 (+1.55%)
S&P 500
4357.94
+95.49 (+2.24%)
Nasdaq
13436.55
+487.93 (+3.77%)
Top Story
Stocks Finish Higher After Volatile Session As The Fed Announces First Interest Rate Hike in Three Years
• US stocks rose Wednesday during a wild session on Wall Street. Earlier in the session stocks had been gaining, as there appeared to be some momentum toward a potential Ukraine-Russia peace agreement. The Dow Jones Industrial average went negative in response to the Fed’s interest rate hike, but then rallied as the afternoon wore on.
• The central bank’s decision to raise short term interest rates by 25 basis points was not a surprise. Its outlook is decidedly more aggressive than what some economists had anticipated, however. The Fed indicated it could hike rates six more times before the end of 2022. This is in response to rising inflation that’s growing at its fastest pace since 1982.
What to Be on the Lookout for Today
• Weekly jobless claims are due. The latest data showed initial unemployment claims jumped by 11,000 to 227,000. Job openings are at record highs and layoffs are at record lows, amid what some economists have dubbed the “Great Resignation.” Investors will also be paying close attention to February’s seasonally adjusted building permits and housing starts to gain further insight into the tight housing market.
• Shipping giant FedEx (FDX) posts earnings for its most recent three-month period. The Memphis-based company last reported results in December 2021, which exceeded analyst expectations for earnings. FedEx joined a rapidly growing list of companies last week when it decided to suspend operations in Russia.
Automated Financial Planning: The Roomba® of Finances
Think of automated financial planning like putting your money on autopilot. It doesn’t mean you can completely lose track of your finances, but the ability to set and forget most of your monthly recurring expenses can help unload a lot of the day-to-day stress that comes with keeping a budget.
If every good robot is engineered by a human, automated financial planning is no different. To start, you’ll need to put all the pieces in place to ensure a smooth-running machine.
One strategy is to start with a checking account to serve as your “headquarters.” Most of your money will come and go through this location.
Here’s where you can put the pay-yourself-first philosophy into practice. Whether it’s automated transfers into your emergency fund, 401(k) contributions, or automated investments, the key for this approach is to ensure the money comes out on the same day you get your paycheck.
It doesn’t have to be a big portion of your income, but think about making it consistent. And, as you start to pay down debts or reduce spending, you can increase those amounts.
9 in 10 SoFi members agree — setting up direct deposit with SoFi is easy.1 Plus, you can earn up to 1.00% APY on checking and savings2, pay no account or overdraft fees3, get 2-day-early-paycheck4, and more. Log in to your account to get started.
A Few Headlines That Should Be on Your Radar
There sure is a lot of green spent on St. Patrick’s Day. The average consumer will shell out $42 for alcohol, corned beef, and cabbage. Some restaurants are experiencing shortages but there’s one key area where they’re well stocked — beer. Every year beer sales go up by around 174% on St. Paddy’s, and spirit sales aren’t far behind in terms of their increase. Restaurants are sometimes finding it difficult to get glassware and certain whiskeys. Meanwhile, some states outrank others in terms of drinks consumed and who has the priciest bar tab. Read more >> Although the actual news of a 25 basis point rate hike was widely expected, as usual the devil is in the details. Simply put, we are walking a tightrope. SoFi’s Head of Investment Strategy walks us through why she thinks the Fed is right to focus on inflation, even if their actions cause near-term negative effects. Read more >> Amazon (AMZN) is buying up cargo planes and expanding geographically to meet customer expectations amid the surge in online shopping. UPS (UPS) and FedEx (FDX) may see competition heat up. Amazon is coming to a locale near you. The company is expanding its air cargo operations and geographical presence in an effort to meet its promise of speedy deliveries, and may add new revenue streams at the same time. Read more >> When the Fed raises rates, it leads banks to increase interest rates on savings accounts and certificates of deposit (CDs) to entice depositors to put more cash into the bank. Investing in CDs can provide an interest rate premium in exchange for depositing cash for a predetermined period. Here’s a look at how they work. Read more >>Not-So-Breaking News
- Walmart’s (WMT) hiring announcements continue, as the retail giant said it plans to hire 50,000 US workers in the year’s first quarter. Earlier this week, the company announced 5,000 jobs for its new tech hubs in Atlanta and Toronto. These jobs will be in stores and fulfillment centers.
- Howard Schultz is returning as Starbucks’ (SBUX) interim CEO, marking his third stint at the helm of the company he helped turn into a household name. Kevin Johnson is retiring following five years as CEO. Starbucks says it wants to find a permanent replacement by this fall.
- Foxconn says it restarted production at factories in the Chinese city of Shenzhen following this week’s COVID-19 lockdown. The company is one of Apple’s (AAPL) biggest iPhone and iPad assemblers. Foxconn indicates it was able to reopen because local rules allow it when a “bubble-like” environment can be created.
- A pair of US senators are calling for a Department of Justice probe into Live Nation Entertainment (LYV), accusing the ticket-selling platform of charging “exorbitant fees.” They also allege the company violated terms of a previous agreement that allowed for a merger with Ticketmaster.
- Instagram (FB) rolled out new parental-control features amid claims the photo-sharing platform can be damaging to younger users’ mental health. This includes tools that allow parents to monitor the amount of time kids spend on Instagram, as well as the ability to set usage limits.
Financial Planner Tip of the Day
“Only 40% of Americans can pay for an unexpected $1,000 emergency expense (which means their emergency fund is effectively their credit cards). And that’s not the only reason an emergency fund is crucial — it can also keep you afloat if you suddenly lose your job or need to take unpaid time off work.”
Brian Walsh, CFP® at SoFi