Tuesday,
May 3, 2022
Market recap
Dow Jones
33,061.50
+84.29 (+0.26%)
S&P 500
4,155.38
+23.45 (+0.57%)
Nasdaq
12,536.02
+201.38 (+1.63%)
Top Story
Choppy Session Ends With Stocks in the Green, Factory Growth Slowest in 18 Months
• US stocks rose Monday following a choppy session. The S&P 500 hit a new low for the year before an afternoon rebound. The market is looking to put April’s slide in the rearview mirror. Volatility continues to affect equities and the bond market alike, as the benchmark 10-Year US Treasury’s yield hit 3.0% at one point for the first time since 2018.
• Investors will be closely watching tomorrow when Fed Chair Jerome Powell speaks, following the central bank’s policy meeting. With inflation running at 40-year highs, the expectation is the Fed will move toward further tightening of its policy.
• In this rising rate environment, consumers should be aware of how the Federal Reserve’s monetary policy decisions could impact personal and household finances. Changes in the federal funds rate indirectly affect various financial areas throughout the economy. An increase in the federal funds rate will likely lead to higher interest rates on personal loans, mortgages, and credit cards, and student loan refinances. Read this article to better understand how this may impact you and your finances.
• April’s ISM manufacturing index showed factories growing at their slowest pace in 18 months. The index came in lower than expectations, with supply issues and labor shortages cited.
What to Be on the Lookout for Today
• The March JOLTS report, formally known as the Job Openings and Labor Turnover Survey, is set for release. Job openings fell slightly in February to 11.3 million, a trend that could continue given that unemployment declined last month. Also watch for March’s factory orders and April’s seasonally adjusted motor vehicle sales.
• American biotech company Biogen (BIIB) will report earnings. Last month the company received a setback when Medicare declined to cover certain treatments. Some analysts suggest the decision may cause Biogen to seek out additional partnerships.
Understanding Volatility Is Key To Being A Good Stock Investor
Has the volatility of the market had you questioning if it's a good time to start investing or if you should change your investment strategy?
The choppy nature of share prices can be intimidating to some investors — especially those who are just beginning to invest, nearing retirement, or have been burned by volatility in the past.
Understanding volatility is key to being a good stock investor. Learn investing tips and tricks from SoFi Financial Planner, Brian Walsh. You’ll learn about how to invest for your goals, how to deal with volatility, why you should be investing for the long term, and more! Watch this video on YouTube to learn more!
A Few Headlines That Should Be on Your Radar
After years on the sidelines, Warren Buffett is enthusiastic about opportunities he sees in the market today. As speculators incite volatility, mispriced securities make some companies appear undervalued. Cash reserves at Berkshire Hathaway piled up while Mr. Buffett took an investing holiday. The legendary value investor is now spending billions to add new names to the company’s stock portfolio, including an $11.6 billion offer for insurance company Alleghany. Read more >> The company behind the popular Bored Ape Yacht Club NFTs collection held a virtual land sale this past weekend. Demand was so high $320 million was raised by Yuga Labs. At the same time, a high level of network activity effectively crashed the Ethereum blockchain and led to a record number of Ether (ETH) being destroyed. Yuga Labs, who created Bored Ape Yacht Club and the metaverse project Otherside, apologized for causing such chaos within the blockchain. They suggested an Ape Coin (APE) blockchain could be established. The company’s plan to cap the number of NFTs sold failed to keep activity in check. Read more >> Spirit Airlines rebuffs JetBlue and intends to proceed with the Frontier merger. JetBlue contends that it won’t take no as the final answer. Citing regulatory risks, Spirit Airlines sees Frontier as its best budget-carrier partner. JetBlue executives have intimated that if Spirit continues to spurn their advances, they will take the issue directly to Spirit’s shareholders. Read more >> With retail interest rates set for another bump following the Federal Reserve’s expected half-point hike this week, student loans are coming into even sharper focus. The historic low interest rates of recent years may soon become a thing of the past. The question is: How soon? If you are waiting for the payment pause to end before refinancing your federal student loans, you may find yourself looking at much higher interest rates by fall. Depending on what your current interest rate is and how much you have borrowed, you could see bigger savings by not waiting. Read more >>Not-So-Breaking News
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Apple (AAPL) faces antitrust charges from EU regulators who claim the software company has restricted access to its mobile wallet technology, preventing competitors from offering alternatives to Apple Pay on Apple devices. The fine could cost upwards of $3.66 billion.
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Moody’s (MC) announced lower-than-expected profit in the first quarter, year-over-year, though it slightly beat revenue expectations. Its 2022 outlook is for revenue to be flat based on continued volatility.
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Loews (L) reported net income of $1.36 a share, up from 97 cents a share, compared to a year ago. Though the company’s three business lines all saw sales growth, total revenue fell over the same period due to investment losses.
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Goldman Sachs (GS) reported a net loss of approximately $300 million due to investments in Russia, including $260 million of credit exposure. The firm reconfirmed its plans to unwind its operations in the country.
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Innoviz Technologies (INVZ) saw its share price pop after it announced that it has been selected to be the direct supplier of LiDAR sensors to “one of the largest vehicle manufacturers in the world.” LiDAR is a component in autonomous vehicles.
Financial Planner Tip of the Day
"A well diversified portfolio helps maximize the expected return for a given level of risk. It also helps smooth returns over time compared to the drastic swings of investing in one or two riskier investments."
Brian Walsh, CFP® at SoFi