Friday,
April 22, 2022
Market recap
Dow Jones
34,792.76
−368.03 (−1.05%)
S&P 500
4,393.79
−65.66 (−1.47%)
Nasdaq
13,332.36
−278.41 (−2.07)
Top Story
US Stocks Fall Reversing the Previous Day’s Gains, Fed Chair Indicates More Aggressive Stance
• US stocks fell Thursday, with all three major indexes giving back gains from earlier in the session, as concerns tied to rising rates overshadowed several strong earnings reports. The yield on the benchmark 10-Year US Treasury moved higher, putting pressure on equities. Analysts say as bond yields rise, riskier assets like stocks may become less appealing.
• Federal Reserve Chair Jerome Powell gave a speech indicating the central bank needs to be more aggressive in its efforts toward combating inflation. He said a 50-basis-point hike is on the table at next month’s meeting. Investors are looking for insight as to how quickly the Fed plans to raise rates.
• Jobless claims fell last week, checking in at the lowest number in 52 years. In total, 184,000 Americans filed for unemployment benefits, slightly above analyst expectations.
What to Be on the Lookout for Today
• S&P Global Mobility will publish this month’s flash manufacturing and services PMI. March’s manufacturing index showed the nation’s strongest factory growth in six months. The services PMI ticked up last month amid higher demand and a steep increase in the number of new orders.
• Volvo (VLVLY) is set to report its latest quarterly results, all while the auto industry faces a series of ongoing challenges. Several weeks ago Volvo cut its 2022 sales outlook amid the continuing global semiconductor shortage, which continues to drag on growth.
ESG 101: Socially Responsible Investing For Beginners
Many people have heard of “voting with the dollar.” But, what about “voting with investments?” Similar to buying from eco-friendly brands or businesses that give back to their local communities, consumers have a choice when it comes to where they opt to invest their dollars.
Some investors are choosing to prioritize the societal and environmental impact of their money. In the investing world, socially responsible investing is often referred to as ESG (Environmental, Social, and Governance).
Still, the idea of socially responsible investing can seem time-consuming, costly, and even confusing to the uninitiated. After all, how can a potential investor know if the companies, funds, and stocks they invest are working to benefit society or the environment?
With a little pre-planning and research, marrying ESG and investing goals isn’t as complicated as has generally been assumed.
Socially conscious investing may be one way for individuals to feel more confident that their investment money is being directed toward companies that claim to benefit society and the environment.
For ESG novices, though, getting started can be confusing. That’s where SoFi can help. SoFi Invest members can consult a financial advisor at no additional cost. In that call, potential investors can discuss how to sync their core social values and investment goals. Start investing!
A Few Headlines That Should Be on Your Radar
What is an ESG investment strategy? On this Earth Day 2022, we look at some of the industries leading the way in eco-friendly finance, including waste management, indoor farming, and alternative fuels using soybeans. Environment, social, and corporate governance are the factors that drive ESG investing. This involves things like corporate diversity, hiring practices, and protection for historically-marginalized groups. It’s high tech as well, with autonomous robots and hydroponic farming part of the story Read more >> “Mass timber” is becoming increasingly popular with multi-story builders and architects as its use can slash project times and provide cost savings relative to concrete and steel. Some market observers are expressing safety and environmental concerns about the practice they consider relatively untested. Engineered wood is created using wood, glue, and special processing so that it can be substituted for materials traditionally used to build skyscrapers. While builders are promising sustainable sourcing, some environmentalists are skeptical and worry that with increasing demand, old growth trees may become sourcing targets. Read more >> Upside Foods valuation exceeds $1 billion as it bags an additional $400 million in a Series C round. Investors see promise in cultivated meat products that remove the need to slaughter animals for their meat. Instead, cutlets and steaks are grown in labs from stem cells. The startup plans to use the funding to build out commercial facilities needed to bring the products to consumers, pending regulatory approval. There is also a campaign planned to get Americans comfortable with this novel food of the future Read more >> Here are some examples of socially responsible criteria investors may use when picking which assets to purchase (and, perhaps, which ones to divest from). Examining investments through the lens of environmental, social, and governance factors may help investors create portfolios that boost global progress in these three areas, allowing investors to sync their values with companies that share them, too Read more >>Not-So-Breaking News
- According to an SEC filing, Tesla (TSLA) CEO Elon Musk may tender a new offer for the outright purchase of Twitter (TWTR). Musk, who already owns over 9% of the social media platform, recently launched a hostile takeover bid. He’s reportedly secured commitments of $46.5 billion to finance the potential deal.
- HBO and HBO Max (WBD) grew by 3 million subscribers in the first quarter, reaching 76.8 million subscribers in total. Former parent company AT&T (T) reported the results, although Warner Bros. Discovery now owns HBO. The news comes after industry leader Netflix (NFLX) surprised analysts by reporting a net loss of subscribers in its most recent quarter.
- American Airlines (AAL) reported last month’s revenue came in higher than the same time period in 2019, marking the first time monthly sales exceeded pre-pandemic levels. The company also said its second-quarter schedule will be around 94% of flights in 2019, which is higher than United Airlines (UAL) and Delta Air Lines (DAL).
- Mattress retailer Sleep Number (SNBR) fell short of Wall Street’s earnings per share estimate and reported first-quarter sales that were 7% lower than the same period in 2021. Executives blamed the semiconductor shortage. Sleep Number’s share price is down more than 32% year-to-date.
- Carvana (CVNA) beat analyst expectations for revenue but posted a wider-than-expected loss in its most recent quarter. Analysts say the online used car dealer took a hit to its profit margin, as a result of its inability to fully pass on the increased cost of its inventory in the current environment of record-level used car prices.
Financial Planner Tip of the Day
"Exchange traded funds (ETFs) are very similar to mutual funds and offer investors easy diversification since buying into an ETF is also buying into a collection of different assets. ETFs are generally passively managed. ETFs generally have lower fees than mutual funds. There are also differences in how ETFs and mutual funds are traded. ETFs can be traded like stocks, while mutual funds trade once per day."
Brian Walsh, CFP® at SoFi