Top Story
Choppy Session Closes Out Volatile Week As a Whole, Fed Says Its Committed to 2% Inflation
• US stocks were mixed Friday in a whipsaw session that saw all three major indexes move back and forth between gains and losses. It marked the end of a week that included plenty of selling and the Fed’s largest rate hike since 1994.
• The S&P 500 and Nasdaq Composite are in bear market territory. Meanwhile, the Dow fell below the 30,000 mark for the first time since January 2021.
• Federal Reserve Chair Jerome Powell reaffirmed the central bank’s commitment to fighting inflation. He says the Fed is “acutely focused” on returning to its 2% target.
• US industrial output edged higher in May, marking the fifth straight month of growth. The number came in 0.2% higher, while analysts had predicted 0.4%. Manufacturing slipped 0.1%.
• Capacity Utilization increased to 79% in May. This measures how efficiently the nation’s mines, utilities, and factories are operating. Economists had forecast 79.3%.
What to Be on the Lookout for Today
• May’s existing home sales will be released by the National Association of REALTORS®. In April the number fell 2.4% from March, the third straight monthly decline. Year-over-year sales were down 5.9%. Inventory of unsold homes increased and the median average price climbed 14.8% over the previous 12-month period.
• American furniture manufacturer La-Z-Boy (LZB) reports earnings. Last week the company announced the hiring of Carol Y. Lee as its new chief information officer. Amid higher inflation companies that sell big-ticket items like recliners and couches have seen diminished demand, especially in comparison to the pandemic when stimulus checks fueled spending.
Bear Market Investing Strategies
It can be scary for investors to see their portfolios decline in value because of market turmoil. During periods of steep market declines known as bear markets, selling may seem like the best thing to do to stop further losses. But by doing this, investors could miss out on potential gains from utilizing bear market investing strategies instead.
For investors with a long-term wealth-building goal, it’s important to remember that bear markets are often relatively short. Rather than panic, it can help to look for potential investment opportunities that may help your portfolio survive during bear market downturns. Here are some strategies for how to invest in a bear market.
A Few Headlines That Should Be on Your Radar
Rising rates are the talk of Wall Street. They’re also the reason conditions are changing within the housing market, with home builder confidence at a two-year low. This week, investors will be studying KB Home’s (KBH) earnings data to get a closer look at one of the sector’s bigger names. Broadly speaking, mortgages are getting more expensive, and that’s driving down demand. Read more >> There may be little to celebrate at this week’s NFT.NYC, the annual NFT bash held in New York City. The NFT market has trended down along with crypto’ crash, as would-be buyers seem to be heading for the exits. Like the crypto market, prices have fallen off a cliff. With the broad market now in bear market territory, the outlook doesn’t offer much to celebrate. But there are some who are focused on what NFTs will be beyond this current environment. Read more >> The up-and-coming Flipkart is looking to take on Amazon (AMZN), both in India and in the US. A 2023 IPO could be realistic. It also has the potential to shake up the e-commerce market in a big way. Flipkart is based in India and offers a diverse range of products from a variety of suppliers. But it’s considered a candidate for US expansion, largely due to the company that owns 75% of its shares. Read more >> When the market or economy is volatile, investors might wonder if their portfolios’ asset allocation makes sense for the conditions. One strategy that is often discussed during times of economic stress is defensive investing. Defensive investing, like other investing strategies, has pros, cons, and timing factors to consider for when it might make the most sense to use this strategy. Read more >>Not-So-Breaking News
-
Adobe (ADBE) delivered full-year guidance that fell short of analyst projections. The company placed blame on foreign-exchange rates, something other large software companies have also mentioned. Some of its Creative Cloud subscription prices rose during its most recent quarter.
-
Roku (ROKU) is moving TV streaming into the e-commerce space. The company is partnering with Walmart (WMT) to let users purchase items on its streaming platform. Shoppable TV commercials will include the option to checkout using Roku Pay, while Walmart will then fulfill the orders.
-
Billionaire Jack Ma’s Ant Group is poised to set up a financial holding company in China. Reports say China’s central bank accepted the tech giant’s application, as Beijing reportedly plans to ease up on its tech sector crackdown.
-
Snap (SNAP) confirmed it’s developing a paid subscription option called Snapchat Plus. The company says it's conducting internal testing at this point. Snapchat Plus is priced near $4.84 a month or $48.50 for the year according to screenshots shared on social media.
-
Fraud is a significant problem on Microsoft’s (MSFT) LinkedIn professional networking platform, according to the FBI. CNBC reports some users have lost significant amounts of money after conversing with someone who gave them bogus financial advice. LinkedIn says it's working on the problem, having booted 32 million fake accounts in 2021.
Financial Planner Tip of the Day
"Rebalancing an investment portfolio can help investors stay on track to meet their long-term goals. By ensuring that there is a steady mix—or diversification—of assets in their portfolio, they can stay on top of their investments in a way that works with their risk tolerance and their financial needs."
Brian Walsh, CFP® at SoFi