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Stocks Continue Their Slide As Unemployment Rate Holds Steady, Economy Adds 428K Jobs
• US stocks fell Friday, coming off the marketās worst day of 2022 the day prior. Investors are continuing to digest the Fedās plans to continue rate hikes and offload assets from its balance sheet. With inflation at its highest level in 40 years, the central bank raised rates for just the second time since 2018. It was the sharpest hike since the dot-com era. Still, a less-hawkish outlook may have sparked a midweek relief rally.
• The bond market and commodity prices remain highly volatile, which according to analysts could continue, as a result of the rising-rate environment. Investment managers argue the upward track of interest rates means assets like gold and bonds arenāt providing the same safe haven they typically represent. Still, the yield on the benchmark 10-year Treasury briefly went over 3.18% for the first time since 2018. As traders sell bonds, prices fall and yields rise.
• Aprilās unemployment rate held at 3.6%. Job growth remained strong as the economy added 428,000 jobs overall. This beat expectations, as economists had anticipated the addition of around 300,000 jobs.
• Relatively-robust jobs data could be sending the market some mixed signals. Analysts note the Fed may feel comfortable that hiking rates wonāt harm the labor market, leading to future increases. Meanwhile, some investors worry that an overly aggressive monetary policy could lead to a broader economic downturn.
What to Be on the Lookout for Today
• The New York Fed will release Aprilās one-year and three-year consumer inflation expectations survey. In March, inflation expectations hit a new high at 6.6% for the one-year reading, also referred to as the short term. The medium-term, three-year reading eased up a bit in March coming in at 3.7%. Also be on the lookout for Marchās revised wholesale inventories.
• Blue Apron (APRN) will report its first-quarter data. Last week the meal delivery service company announced it had secured a $70.5 million capital infusion through debt and equity financings. Blue Apron fell short of Wall Streetās revenue expectations during its last three earnings calls.
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A Few Headlines That Should Be on Your Radar
One of the market leaders in the plant-based food industry, Beyond Meat (BYND) will report earnings this week, after it was announced the McPlant (MCD) veggie burger will be rolled out in more markets. Some analysts call it a major step for the plant-based sector. Beyond Meat last reported earnings in late February, missing analyst expectations on top and bottom lines and issuing weak guidance. Company executives said the focus would shift to cutting back operating expenses. Beyond Meat missed analyst expectations for earnings during its last four quarters. Read more >> Peloton has lost nearly 90% of its value from its 2021 high. New CEO Barry McCarthy has ambitious turn-around plans that include offering a 15-20% stake in the company. McCarthy, who hails from Netflix and Spotify, plans to swap the companyās focus from equipment to subscriptions. The sought-after capital infusion is meant to complement cost cuts as the company slashes headcount and other expenses. Read more >> When it comes to the consumer experience in America, buying a car is pretty different. A Toyota (TM) dealership for example may not be owned by the parent company. Plus, thereās no uniform online shopping experience like there is with so many other products. Some companies want to change that. You have to go all the way back to the late 1800s and the days of the Model T to understand how it all started. Dealerships tried to protect themselves by lobbying for laws preventing direct-to-consumer sales. Now, automakers are pushing into the use of virtual reality, and ecommerce auto sales are becoming more common. Read more >> The market for home improvements has exploded since the pandemic. Hereās what to consider to avoid home improvement scams. Knowing the signs of home improvement fraud may keep you from becoming the next victim of a home repair scam. Read more >>Not-So-Breaking News
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DoorDash (DASH) beat expectations for revenue which was up 35% for the quarter. The company says it effectively retained workers by offering gas subsidies and focusing on making things easy on employees. DoorDash also revised its full-year forecast upward.
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Under Armour (UAA) missed on both the top and bottom lines as the company continues to be negatively impacted by supply chain snarls and COVID-19 lockdowns in China. The sports apparel retailer also issued a bleak outlook for its fiscal year 2023, triggering a sell-off of its shares.
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Lucid Group (LCID) reported it has over 30,000 reservations for its electric vehicle, Air. It plans a price hike for reservations beginning June 1. The luxury electric vehicle automaker delivered 360 vehicles in the first quarter.
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GoPro (GPRO) posted better-than-expected earnings and revenue in line with estimates. Over 40% of its sales were from GoPro.com. A middling second-quarter outlook may have contributed as its share price plummeted.
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Goodyear Tire (GT) beat analyst estimates on both the top and bottom lines. Revenue was up nearly 40% as executives said the Cooper Tire merger, price improvements, and higher volume all contributed to the bottom line.
Financial Planner Tip of the Day
āOne strategy to approaching home additions is to create your dream list, then have alternate choices in mind if your budget, material availability, or other external factors create a need to alter the project down the road. For example, you may love the look of marble flooring, but its price point might be higher than youād initially estimatedāor perhaps it doesnāt blend in with the rest of your house once youāve started laying out the plans. Having a back-up planāand one thatās cost-efficient at thatācould help keep your budget in check.ā
Brian Walsh, CFPĀ® at SoFi