Top Story
Amazon Downbeat, Sparking Sell Off as Equities Took Beating in April, PCE Checks in at 5.2%
• US stocks fell Friday as a negative earnings report from Amazon (AMZN) weighed on the tech sector, all while investors continue to grapple with a series of headwinds. Concerns tied to inflation put pressure on equities throughout the month of April, while the war in Ukraine and new COVID-19 lockdowns in China have some economists worried growth could stall.
• Volatility continues to be an ongoing theme, both within the bond market and commodity prices. The yield on the benchmark 10-Year US Treasury went above 2.9% on Friday, while the price of oil and natural gas increased. Russia’s decision to cut off gas supplies to Poland and Bulgaria could have investors convinced of more disruptions in the future.
• The March personal consumption expenditures index, or PCE, showed prices rising by 5.2% on an annual basis. This reading, which is considered the Fed’s preferred measure of inflation, strips out food and fuel costs. Meanwhile, consumer spending increased by 1.1% in March, month-over-month.
What to Be on the Lookout for Today
• The ISM manufacturing index for April is due. This broadly tracks activity within the manufacturing sector. While inflation and the disrupted supply chain continue to cause problems, March’s index came in higher than the previous reading. S&P Global’s final manufacturing PMI for April and the construction spending for March are also due.
• Clorox (CLX) will share results from its most recent quarter. The company’s earnings have been on a steady decline from the highs posted in 2020, when the COVID-19 pandemic caused demand for cleaning and disinfectant products to spike. In addition, Clorox faces challenges tied into logistics and rising prices.
The Week Ahead at SoFi
Join in this week for talks on understanding today’s inflation and exploring your mortgage options, plus an in-person event at Graduate Roosevelt Island. Then check out the Your Next Dollar livestream. Save your seat in the SoFi app!
A Few Headlines That Should Be on Your Radar
Industry observers have praised the management team at Crocs (CROX) for helping to turn their casual clogs into a fashion statement. The shoemaker reports earnings this week and labor market data will be front and center during the week ahead on Wall Street. Analysts say Crocs has effectively trimmed its operation all while working to make its products popular with Generation Z. Meanwhile job quits, ADP’s jobs report, jobless claims, and the unemployment rate are included in this week’s economic data. Read more >> Amazon has reported its slowest growth in nearly 20 years. Though it predicts a rough couple of quarters ahead, executives anticipate better results in Q4. The company has been digesting big spends on labor and logistics, while facing escalating costs for deliveries amid rising oil prices. Executives claim they will work through inefficiencies to improve results, but inflation and competitive pressures are largely out of their control. Read more >> College Decision Day 2022 is in the rearview mirror, and that’s just fine for an increasing number of young people who are taking a “gap year.” But what are the advantages? Plus, there’s several money tips to keep in mind for people who will be headed to campus this coming fall. Some students plan to travel or work and build up savings during their educational pause, others just want to feel more prepared and experienced when going to college. For those who are enrolling in classes, it’s a good time to start building a financial game plan. Read more >> Call it the silver lining to the second year of the pandemic: the lockdown has led to a deeper sense of fulfillment. A SoFi survey reports that personal satisfaction is on the rise, despite the pandemic. Learn more about how we’re happier with our relationships, careers, and more. Read more >>Not-So-Breaking News
-
Elon Musk has sold 4.4 million shares of Tesla (TSLA) stock, less than 3% of his holdings. Worth approximately $4 billion, the net proceeds will presumably help fund the purchase of Twitter (TWTR).
-
Airbnb (ABNB) has made the remote work option permanent, while employees can still choose to work in the office. CEO Brian Chesky describes the two pandemic years as the “most productive” ever.
-
Bristol Myers’ Squibb (BMY) received the FDA’s approval for Mavacamten, an oral heart disease medication and the first cardiac myosin inhibitor available in the US. The drug was brought under the company’s portfolio when it acquired MyoKardia in 2020.
-
Apple (AAPL) reported one of its best quarterly periods ever with revenues beating expectations, based on sales from both its service business and iPhones. However, the company noted supply issues may negatively impact future growth given new COVID-19 related shutdowns in China and shortages of silicon.
-
Bloomin’ Brands (BLMN), which owns Outback Steakhouse in addition to other restaurant chains, beat analyst estimates on the top and bottom lines. Net income of $75.5 million was up $5.3 million from the prior year, while earnings per share of 80 cents exceeded expectations for 74 cents.
Financial Planner Tip of the Day
“Your credit score is based on factors such as how often you pay your bills on time, how many loans and credit cards you have, what your debt is relative to your credit limits, and the average age of your accounts. It also considers negative financial events, such as judgments, collections actions, or bankruptcies.”
Brian Walsh, CFP® at SoFi