Wednesday,
April 27, 2022
Market recap
Dow Jones
33,240.18
â809.28 (-2.38%)
S&P 500
4,175.20
â120.92 (-2.81%)
Nasdaq
12,490.74
â514.11 (-3.95%)
Top Story
Market Resumes Its Slide as Inflation, COVID-19 Lockdowns, and Russia-Ukraine Weigh on Sentiment
• US stocks fell Tuesday after a one-day respite, with the combination of inflation, COVID-19 lockdowns in China, and the ongoing war in Ukraine weighing on sentiment. Some investors worry global economic growth will sputter amid these ongoing factors.
• Oil prices rose worldwide. Analysts suggest this could be in response to comments from a Russian official, who said the threat of nuclear war with Ukraine is real. Generally speaking, the recent geopolitical unrest has caused energy markets to be highly volatile. Russia is one of the worldâs largest producers of oil and natural gas.
• Consumer confidence fell slightly this month, according to the Conference Board. Marchâs reading came in at a 10-month low. Generally speaking, rising prices have caused consumer sentiment to decline for close to a year.
• Home prices rose by 19.8% for the 12-month period ending in February. This is according to the S&P CoreLogic Case-Shiller National Home Price Index, which also reports new home sales fell by 12.6% in March from the previous year.
What to Be on the Lookout for Today
• MBA mortgage applications will be released. Investors will be studying how increased mortgage rates have affected the housing market. The average rate for a 30-year fixed loan will also be published, as well as the first-quarterâs home ownership rate, and last monthâs pending home sales.
• Ford (F) is set to share its latest quarterly data. This will give the market a look at how one of the nationâs largest automakers is navigating inflationary pressures and the ongoing chip shortage. Last week the company announced it was recalling 650,000 trucks and SUVs for faulty windshield-wiper arms.
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A Few Headlines That Should Be on Your Radar
Home prices remained on the rise in February, which may seem puzzling given the degree to which mortgage rates have increased. Analysts say thatâs because values lag behind pending sales, which have been falling for four months. Buyers are also âhunting for affordability,â which is leading them to markets like South Dakota and Kansas. As mortgage rates rise, home values should fall, all while the busy spring buying season continues. Read more >> Microsoftâs (MSFT) cybersecurity division pulled in $15 billion during its most recent quarter, as it looks to help crackdown on rising cyber crime. The tech giant now dominates the cybersecurity sector, with that segment growing by 45% last year. Even the US government is raising the alarm bell over risks posed by malicious online actors. Individuals and businesses alike are spending significant amounts of money to stay safe online. Read more >> Inflation is part of the reason why spending on big-ticket items is down. Trends that played out during the pandemic are another factor. Both Tempur Sealy (TPX) and Sleep Number (SNBR) say demand is lower for their mattresses â analysts say thatâs a significant indicator. When demand for mattresses falls, it typically means spending on other types of durable goods will decline as well. Many people bought home furnishings and appliances during the early days of the pandemic, meaning they arenât looking to spend on those items now â especially with prices up. Read more >> What began as an annoyance (an extra pinch at the gas pump and the grocery store) has turned into a painful reminder that budgeting and saving may be even more important than anyone ever thought. And without a plan to deal with inflationâs effects â day to day and over time â your dollars can lose purchasing power. The good news is that itâs never too late to consider strategies that could protect your money from inflation, while also keeping in mind your personal financial situation, your goals, and your tolerance for risk. Read more >>Not-So-Breaking News
- United Airlines (UAL) has spring and summer plans to boost its trans-Atlantic capacity by 25% as demand has ticked upward. New destinations and routes will be added serving Europe and the Middle East, along with an expanded flight schedule.
- Over 40 companies are calling for federal tax credits to incentivize clean energy practices. Airbnb (ABNB), Lyft (LYFT), and Salesforce (CRM) were among those that signed a letter to Congress requesting financial support. This would fund projects related to wind, solar, nuclear and electric vehicles that may slow harmful climate change.
- PepsiCo (PEP) beat analysts first-quarter estimates for revenue and earnings based on strong sales in its Doritos, Quaker, and Gatorade product lines. It also increased its revenue forecast despite the negative impact of its diminished presence in Russia.
- United Parcel Service (UPS) posted better-than-expected earnings in the most recent quarter, as executives say it successfully passed on price increases to consumers. It also reiterated its $102 full-year revenue forecast.
- Warner Bros. Discovery (WBD) issued new guidance disclosing lower-than-expected profit stemming from a âmessyâ assortment of assets resulting from the WarnerMedia and Discovery merger. Share prices fell on the news.
Financial Planner Tip of the Day
âIt is important to understand that not every mortgage refinance will save you money on interest. For example, if you extend the loan terms, you may have smaller monthly payments, but youâll end up paying more money over the course of the loan.â
Brian Walsh, CFPÂŽ at SoFi