Friday,
May 6, 2022
Market recap
Dow Jones
32,997.97
−1,063.09 (-3.12%)
S&P 500
4,146.87
−153.30 (-3.56%)
Nasdaq
12,317.69
−647.16 (-4.99%)
Top Story
Stocks Suffer Their Worst Day of 2022, Jobless Claims Rise to Highest Mark Since February
• US stocks fell Thursday as the previous day’s optimism seemed nowhere to be found. It translated to the worst day for stocks in 2022. Investors are continuing to react to the Fed’s comments on Wednesday, following the 50-basis-point rate hike. Analysts note the economy continues to face numerous headwinds, including the rising rate environment amid inflation, the war in Ukraine, and COVID-19 lockdowns in China.
• Large tech stocks struggled, including Amazon (AMZN), Meta Platforms (FB), and Microsoft (MSFT). Growth stocks of this variety have historically struggled when rates rise. Meanwhile, the benchmark 10-Year US Treasury rose over 3.0% again, putting further pressure on equities and growth stocks in particular.
• Jobless claims rose to 200,000, the highest number since February. It also marked the sharpest weekly increase since July of last year. The Labor Department says worker productivity fell 7.5% in the first quarter, the steepest decline in 74 years.
What to Be on the Lookout for Today
• April’s unemployment rate will be published. The number fell to 3.6% in March. The US economy has added 400,000 jobs during each of the past 11 months. Nonfarm payrolls and labor participation rate are also due for April. The consumer credit report for March is set for release as well.
• Sports apparel retailer Under Armour (UAA) will post its most recent earnings data. While the stock has failed to gain much traction in the past decade, some analysts contend that is about to change. Under Armour’s revenue grew by 27% last year, and its margins have been increasing, but it still trades at a discount compared to its competitors including Nike (NKE) and Lululemon (LULU).
Payment History and Your Credit Score: What You Need to Know
You might not feel like an occasional late payment on a credit card is a big deal, but it can impact your credit score negatively. In fact, payment history accounts for 35% of your FICO score (the scoring system for the credit bureau Experian).
The easiest way to raise your credit score? Pay your bills on time. Many loans and credit cards will allow you to set up autopay, which is a foolproof way to make sure you never miss a payment.
Track your credit score for free in the SoFi app, where the factors affecting your score are broken out to make them easier to understand.
A Few Headlines That Should Be on Your Radar
Inflation is soaring, and a flower shortage has been ongoing for months, helping drive Mother Day’s spending higher this year. In fact the average amount people are expected to pay is up 11% compared to 2019, pre-pandemic. It seems COVID-19 may have also made an impact on the popularity of certain gifts. While jewelry, perfume, and gift sets remain top sellers this Mother’s Day, many women also say they would enjoy experiences over physical items. Meanwhile, supply-chain woes and poor growing conditions are making flowers hard to come by — florists are sharing supplies. Read more >> This year many investors have spurned growth stocks in favor of dividend-paying stocks. Amid market volatility, geopolitical, and economic uncertainty, some see safety in larger companies in staid industries such as utilities and consumer staples. Growth stocks, a recent darling in the investing world, are suffering in 2022. Sectors such as technology and communications are posting double-digit losses. By contrast, many dividend-paying companies are seeing valuations rise. Read more >> Home Depot launches a $150 million venture fund, as it sets its sights on a better shopping experience and technological innovation. The home improvement giant plans to invest in early and growth-stage companies that focus on enhancements to the customer experience, operational efficiencies, and technology. This follows previous direct investments in tech and delivery start-ups. Read more >> Index funds are a great way for beginner investors to diversify their portfolios and decrease risk. Here's how to get started with index fund investing. Index funds are a way for even novice investors to get low-cost exposure to broad swaths of the economy within their portfolio. It’s important to understand their benefits and drawbacks, when deciding whether or not they make sense as part of your portfolio. Read more >>Not-So-Breaking News
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Elon Musk snagged $7 billion in new financing toward the acquisition of Twitter (TWTR). The additional funds are coming from a group of 19 investors including Oracle’s (ORCL) Larry Ellison, a Saudi Prince, and Fidelity.
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Royal Caribbean (RCL) failed to meet Wall Street expectations on both the top and bottom lines, though revenue skyrocketed to $1.06 billion from just $42 million. The cruise operator expects to attain profitability in 2022.
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Penn National (PENN) beat expectations on the top and bottom lines. The online gaming and sports betting company benefited from lower reinvestment rates and increased popularity with younger demographics.
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Shopify (SHOP) missed on both the top and bottom lines on investment losses and costs related to the purchase of ecommerce fulfillment company, Deliverr. Last quarter revenue grew at the fastest rate since going public.
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Wayfair (W) posted lower-than-expected results on both the top and bottom lines as their active customer base shrank. The company’s share price has plunged by more than 50% year-to-date.
Financial Planner Tip of the Day
“For individuals who want to invest in the markets and not think about it, then the broad exposure—and generally lower fees—offered by index funds may make sense. Investing in index funds tends to work best when you hold your money in the funds for a longer period of time, or use a dollar-cost-average strategy, where you invest consistently over time to take advantage of both high and low points”
Brian Walsh, CFP® at SoFi