Tuesday,
April 12, 2022
Market recap
Dow Jones
34,308.08
-413.04 (-1.19%)
S&P 500
4,412.53
-75.75 (-1.69%)
Nasdaq
13,411.96
-299.04 (-2.18%)
Top Story
Tightening Monetary Policy Highlights Investor Concerns As Stocks Sold-Off to Start Week
• US stocks fell Monday, as tech stocks declined broadly amid investor concerns tied to the Fed’s tightening monetary policy. Last week, the central bank indicated it plans to take a much more aggressive stance in an effort to slow down inflation.
• The latest round of COVID-19 shutdowns in China also have some economists concerned about how the already-burdened supply chain will be affected. Oil prices fell yesterday, possibly in response to the prospect of falling demand amid production disruptions.
• Consumer inflation expectations hit a record level in February. The median expectation among consumers is that inflation will come in at 6.6% on an annual basis. That’s the highest number recorded since the NY Fed launched the survey in 2013.
What to Be on the Lookout for Today
• New inflation data is on the way, with the Consumer Price Index for March scheduled to be published. Last month’s number showed prices rising by 7.9% year-over-year, the fastest rate recorded in 40 years. Core CPI which strips out fuel and food prices is also set for release, as well as the NFIB small business index for March, and last month’s federal budget deficit.
• Pure Cycle Corporation (PCYO) will post its latest quarterly data. It last shared results in January. The company owns and develops water rights as well as land in the rapidly growing Denver area, where water is scarce.
What Is Financial Freedom?
Ever dream of walking out of your job, free to pursue a project you’ve always dreamed of starting? Or going back to school without taking out student loans? Or having the financial freedom to leave an unhealthy relationship or location?
What about the option to retire at age 45 or 50 instead of at age 65 (or 80)? And upon retiring, dedicating your life to humanitarian work, raising your family, or tucking yourself away in your mountain cabin with hundreds of books?
Each of these opportunities could be afforded with financial freedom. Just as it sounds, financial freedom is typically defined as having the resources to do exactly as you please.
Living life to your fullest satisfaction may require a degree of financial literacy. Paying bills, covering general expenses, and constantly managing a budget can feel like a burden, but saving money and generating wealth can provide much-needed relief.
If you are thinking about early retirement and achieving financial freedom, investing could help. SoFi Invest® allows you to trade stocks with no commissions and offers other tools that can help you build a savings nest egg. Get started!
A Few Headlines That Should Be on Your Radar
Shopify (SHOP) CEO Tobi Lütke wants to retain control of the company he founded. He is looking to shake up the capital structure in an attempt to secure his influence over the company. Mr. Lütke is asking shareholders to approve his plan for a 10-to-1 stock split and approve special “founders shares” for himself. In part, the move is intended to go upstream and get ahead of any potential future hostile takeover bids as the stock price is currently languishing. Read more >> Rising mortgage rates could lead to significantly lower demand for homes among traditional buyers, but for investors paying cash, it’s a different story. Available housing inventory is well below pandemic levels, and home builders are busy, with investors their new top customer. During the fourth quarter of 2021, there was a notable uptick in the number of brand new single-family homes being purchased by investors. Analysts say the market for single-family rentals will remain high, because the same people getting priced out of purchases want to move into larger spaces. Read more >> As the worries stack up, investors question whether the market will scale the wall or slip instead. On the heels of COVID-related problems and supply-chain issues, now inflation and rising interest rates are taking their toll on companies' bottom lines. Investors will be sifting earnings reports, looking for clues that companies are well-positioned to maintain profitability in an increasingly difficult economic environment. The ability to pass cost increases onto consumers who are also feeling inflation’s bite, will be a key factor differentiating the winners from the losers. Read more >> A percentage-based, easy-to-apply formula, this tried-and-true budgeting rule uses simple underlying concepts to help you keep your personal finances in good order. Setting up a budget for your personal finances can be tough. The 70-20-10 rule for savings helps you set up your monthly budget. Read more >>Not-So-Breaking News
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It turns out Tesla (TSLA) and SpaceX founder Elon Musk won’t be joining Twitter’s board after all. Following the news he’d bought an over 9% stake in the company, it was announced he’d agreed to join the social media platform’s board. Some market observers wonder if this means the billionaire Musk will end up buying an even larger stake in the company.
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Austin, Texas-based tech company SailPoint (SAIL) is being acquired by private equity firm Thoma Bravo for $6.9 billion in an all-cash deal. Analysts say this illustrates how in demand software companies are, especially those dealing with cybersecurity.
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Several Chinese electric vehicle makers saw their share prices fall yesterday after Nio (NIO) reported production and delivery delays as a result of the latest COVID-19 lockdowns. The news sent Nio, Xpeng (XPEV), and Li Auto (LI) lower. Tesla (TSLA) took a hit as well, as over a quarter of the company’s revenue comes from China.
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Biopharmaceutical company Veru (VERU) disclosed that its COVID-19 drug candidate was shown to reduce deaths in hospitalized patients by 55%. Veru says its next step will be meeting with the FDA to potentially submit an emergency-use authorization application.
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JetBlue (JBLU) announced it’s planning to cut its flight schedule and hire more workers this summer in an attempt to meet surging demand. Executives say May’s capacity has been cut by upwards of 10%, after 300 flights were canceled this past weekend. JetBlue’s competitors are dealing with similar challenges.
Financial Planner Tip of the Day
“One way to build credit is to display a history of responsible borrowing. For that reason, you may want to place monthly bills and other expenses on your credit card—being sure to pay the bill in full each month by the due date.”
Brian Walsh, CFP® at SoFi