Tuesday,
May 24, 2022
Market recap
Dow Jones
31,880.24
+618.34 (+2.0%)
S&P 500
3,973.75
+72.39 (+1.9%)
Nasdaq
11,535.27
+180.66 (+1.6%)
Top Story
Market Kicks Off Week on High Note, Fed’s Bostic Says Rate Hikes Could Slow in September
• US stocks rose Monday as the market looks to snap its eight-week losing streak. Investors have observed these “relief rallies” previously, but they haven’t led to an extended rebound. Traders snapped up shares of beaten-down stocks leading to gains in all three major indexes.
• Sentiment may have gotten a boost from President Joe Biden’s comments regarding China. He said lifting tariffs placed on China during the Trump Administration is under consideration.
• Federal Reserve Bank of Atlanta President Raphael Bostic said it may “make sense” to pause the central bank’s rate hikes in September. The Fed’s tightening monetary policy in response to record-high inflation has put pressure on equities.
What to Be on the Lookout for Today
• April’s new home sales are due. The number fell 8.6% in March year-over-year. Meanwhile, the median price of a new home rose 21.4% from a year ago, which analysts attribute to extremely tight supply.
• S&P Global’s US manufacturing and services PMI for May are also set to be published. April’s reading showed continued growth within the manufacturing sector despite the impact of inflation.
• Clothing retailer Nordstrom (JWN) hands in its report card. The broader retail sector was a major talking point on Wall Street last week, as some market observers worry inflation is starting to catch up to Americans’ spending habits. During its most recent earnings call Nordstrom beat expectations on the top and bottom lines.
What is the Average Stock Market Return?
As an investor, it’s important to understand the average return on stocks and what it can mean for portfolio growth over the long term. Overall, the average stock market return is 10% annually in the US — but realistically, that figure is more like 6% to 7% when accounting for inflation.
It’s rare that the stock market average return is actually 10% in a given year. When looking at nearly 100 years of data — from 1926 to 2020 — the yearly average stock market return was between 8% and 12% only eight times. In reality, stock market returns are typically much higher or much lower.
There is a silver lining to this constant stock market drama. If someone loses thousands in the stock market, there’s a chance they’ll gain it back over time. That’s why many experts recommend holding onto investments when the market experiences a bad week, rather than selling different stocks at a loss.
Some investors might enjoy tracking the ups and downs of the stock market. Others might feel overwhelmed by trying to make decisions when their stocks are at an all-time high or nosedive. Every investor has a different style. With SoFi Invest®, members can choose between active and automated investing to find the investing style that works for them.
Active investing is for people who like a hands-on approach. They can monitor and trade their stocks online as they see fit. Automated investing is for people who prefer a hands-off style. They can enter their goals into the SoFi Invest® app, and SoFi takes care of the rest. Whatever your style, start trading online with SoFi Invest.
A Few Headlines That Should Be on Your Radar
It’s not just Russia’s invasion of Ukraine that’s putting corporations on the move. Geopolitical tension of a different kind has Didi (DIDI) delisting its US shares and returning home to China. When it comes to ExxonMobil (XOM) and McDonald’s (MCD), leaving Russia is in direct response to the war. Didi is caught up in tensions between Washington, DC and Beijing — as well as questions concerning national security. Read more >> Vehicles in the US reached a record average age of 12.2 years. Prices have skyrocketed and car lots are bare, so more people are holding onto what they have. The pandemic accelerated a trend in the US of people holding onto their cars for longer. Supply chain snarls and chip shortages resulted in dealers having little to choose from, while prices for both used and new vehicles have surged. Read more >> Weak earnings reports by Target (TGT) and Walmart (WMT) have industry observers concerned about slowing consumer spending, and what this could mean for US economic growth. More retailers are scheduled to report their earnings this week. Analysts will be scrutinizing the data to get a sense for how Americans are responding to rising prices, and what this might mean for the economy’s future. Read more >> You may be entitled to the home office tax deduction if you’re self-employed. The Tax Cuts and Jobs Act nearly doubled the standard deduction and eliminated many itemized deductions, including unreimbursed employee expenses, from 2018 to 2025. Read more >>Not-So-Breaking News
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eBay (EBAY) is moving into the NFT space. The ecommerce giant’s initial offer will be virtual 3-D images of hockey legend Wayne Gretzky.
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Conan O’Brien has sold his digital platform, Team Coco, to SiriusXM (SIRI) for $150 million. The satellite-radio broadcasting company will acquire 11 podcasts in the deal, including “Conan O’Brien Needs a Friend.”
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Tesla (TSLA) chief Elon Musk plans to raise another $1.7 billion for SpaceX, which would bring its valuation to $127 billion. The company has been using capital infusions to build out its rocket and global satellite projects, Starship and Starlink.
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Autodesk (ADSK) saw its share price fall after Deutsche Bank (DB) downgraded its stock from a buy to hold, while cutting its price target by nearly 20%. The bank analyst is concerned the software company may experience weakening demand and harmful currency fluctuations.
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Pfizer (PFE) and BIONTech (BNTX) claim children 6 months to 5 years old would attain 80% protection against the omicron variant after its three vaccine shots. The FDA will convene June 15 to review both Pfizer and Moderna’s (MRNA) application to authorize their vaccines for this age group.
Financial Planner Tip of the Day
“Setting a financial goal is all about having your money serve you. When a budget is too harsh and punitive, you might wind up making impulse buys or otherwise overspending. If you know you have some cash stashed for mood-lifting purposes, you can stay on track.”
Brian Walsh, CFP® at SoFi