Thursday,
June 2, 2022
Market recap
Dow Jones
32,813.23
-176.89 (-0.5%)
S&P 500
4,101.23
-30.92 (-0.8%)
Nasdaq
11,994.46
-86.93 (-0.7%)
Top Story
Dow Falls Over 175 Points in Another Volatile Session, Job Openings Declined in April
• US stocks fell Wednesday as the start of June didn’t put a stop to the market’s volatility. All three major indexes gave up gains from earlier in the session. Last week’s brief rally doesn’t seem to have convinced many investors that a broader rebound is coming. Rather, many remain concerned the Fed’s tightening monetary policy could tip the economy into a recession.
• Job openings declined by 455,000 in April. Still, the number vastly exceeds the number of available workers. Both hirings and job quits remained flat.
• US construction spending rose in April. The total upticked 0.2%, which came in lower than expectations.
• Mixed data emerged yesterday concerning the US manufacturing sector. The S&P Global Manufacturing PMI for May showed decreased activity, while ISM’s manufacturing index for May increased.
What to Be on the Lookout for Today
• Weekly jobless claims are due. Claims for the week ending May 21 checked in 8,000 lower. Unemployment claims are down near pre-pandemic levels observed in 2019, when the labor market was also tight.
• ADP’s employment report for May will shed further insight into the job market. The economy added 247,000 private jobs in April, well below estimates.
• April’s factory orders are also scheduled to be published. The number rose in March, beating expectations.
• Athletic apparel company Lululemon (LULU) will share its first-quarter fiscal 2022 earnings data. While the retailer faces headwinds in the form of higher fuel and labor costs as well as declining consumer confidence, a favorable report from Morgan Stanley (MS) last week argued Lululemon is “well-positioned” to ride out inflation.
How Using a Personal Loan to Pay Off Credit Card Debt Works
Personal loans are a type of unsecured loan that a borrower can take out for almost any purpose, including paying off credit card debt. Loan amounts can vary by lender and will be paid to the borrower in one lump sum after the loan is approved. The borrower then pays back the loan — with interest — in monthly installments that are set by the loan terms.
Many unsecured personal loans come with a fixed interest rate that won’t fluctuate or change over the life of the loan. An applicant’s interest rate will be determined by a set of factors, including their financial history, credit score, income, and other debt, among other factors. Typically, the higher an applicant’s credit score the better their interest rate will be, as they may be seen as a less risky borrower. Lenders may offer individuals with low credit scores a higher interest rate, presuming they will be more likely to default on their loans.
When using a personal loan to pay off credit card debt, the loan proceeds are used to pay off the cards’ outstanding balances, consolidating the debts into one loan. Ideally, the new loan will have a much lower interest rate than the credit cards. Consider that the average credit card interest rate is about 16%, while the average personal loan rate is about 9.5%, according to the Federal Reserve. By consolidating credit card debt into a personal loan, a borrower’s monthly payments can be more manageable and cost considerably less interest.
SoFi personal loans have low interest rates and fixed monthly payments, which can be helpful when paying off high-interest debt. The online application is quick – find your rate in just two minutes without any commitment to continue. If you’re approved, the funds are deposited directly into your account.
A Few Headlines That Should Be on Your Radar
During the pandemic, Americans went shopping and “buy now, pay later” programs proliferated. Now, as inflationary pressures hit consumers the rising number of late payments may indicate trouble ahead for these loan companies. Once the darlings of the market, payment plan companies have seen their share prices plunge as some investors expect delinquencies to rise, along with costs to retain credit lines. Read more >> Are the recent uptrends we’re seeing simply brief rallies in an otherwise downward trending period, or are they indications that we’re entering a new phase of positive momentum? In this week’s column, SoFi’s Head of Investment Strategy looks at three indicators to demystify the recent “bear market rallies.” Read more >> Last year the big story in retail was the supply chain disruption and empty shelves. Now, stores have way too much product and they’re planning promotions. Looking for a deal on a TV or computer? You could be in luck. While inflation is squeezing Americans’ wallets, the rush to stock up over the past 12-months means discounts here in 2022. Read more >> Paying off credit card debt isn’t easy, but with a smart credit card debt elimination plan, you can start making a dent in your debt—without giving up everything in your life that brings you joy. Need help with debt elimination? Read about how to create a debt elimination plan and outline steps to make it easier to pay off your credit card balances. Read more >>Not-So-Breaking News
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Delta (DAL) has predicted revenue will return to 2019 levels this quarter. Executives say travel demand is increasing and rising fuel expenses are being offset by higher fares. The news came on the heels of the company's recent announcement it plans to cut its flight schedule.
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Nio (NIO) reported ongoing headwinds are delaying its vehicle deliveries. The Chinese electric vehicle manufacturer blamed COVID-19 lockdowns for its slow recovery from disruptions caused by the pandemic.
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IBM (IBM) has been ordered to pay BMC Software $1.6 billion for engaging in “intentional wrongdoing.” The company allegedly swapped in its own software while servicing the two firm’s mutual client, AT&T (T).
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Capri Holdings (CPRI) posted better-than-expected earnings and revenue, sending its shares higher. The high-end fashion company also announced plans for a $1 billion stock buyback.
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Ford’s (F) F-150 Lightning pickup could be “a mini power plant for your home” according to an executive at Pacific Gas & Electric (PCG). The vehicle’s battery can provide a bi-directional charge and stream electricity to the home, or even to the grid itself.
Financial Planner Tip of the Day
“Interest rates on credit cards are notoriously high, but it’s possible to contact credit card companies to negotiate a lower rate. There’s no way to guarantee that asking will yield results, but for borrowers in good standing, a company may consider lowering their rate. This could help speed up your debt payoff process.”
Brian Walsh, CFP® at SoFi