Tuesday,
June 28, 2022
Market recap
Dow Jones
31,438.26
−$62.42 (−0.2%)
S&P 500
3,900.11
−11.63 (−0.3%)
Nasdaq
11,524.55
−83.07 (−0.7%)
Top Story
Last Week’s Rally Thrown Off as Oil Prices, Durable Goods, and Pending Home Sales All Rise
• US stocks fell Monday as the market’s attempt at a rebound hit a snag. Broadly speaking, investors are attempting to decide whether or not prices have reached a bottom, all while keeping an eye on the Fed and its plans for rate hikes.
• Oil prices rose amid a new effort to place sanctions on Russia. The move would put a cap on the price that could be paid for Russian oil exports.
• May’s durable goods orders showed the nation’s manufacturing sector remains strong despite rising interest rates. Orders for nondefense capital goods excluding aircraft rose 0.5% month-over-month and 10.2% from the year-ago period.
• May’s pending home sales index rose unexpectedly by 0.7% from April. The National Association of Realtors notes that broke a six-month streak in which the number fell. Analysts say a brief pullback in mortgage rates is the likely reason.
What to Be on the Lookout for Today
• June’s consumer confidence index is due from the Conference Board. May’s index slipped from April to hit a three-month low. Analysts blame that on persistent inflation which has weakened Americans’ buying power.• The S&P Case-Shiller US home price index will be released for April, tracking the change in prices on an annualized basis. Home prices rose 20% year-over-year in March, despite the recent rise in mortgage rates.
• Biopharmaceutical company Beyond Air (XAIR) will announce its fiscal year 2022 results. The Long Island, New York-based maker of medical devices specializes in nitric oxide generator and delivery systems. Its LungFit system is in critical trials and aims to treat a variety of disorders including acute viral pneumonia as caused by COVID-19.
What’s the Difference Between Saving and Investing?
The main difference between saving and investing is the amount of risk you are willing to take to reach financial goals.
When saving, you generally want a low-risk option to build and maintain wealth. Saving is when you gradually set aside funds — maybe a portion of your paycheck — in a safe place, like a savings account or money market account. These accounts allow you to store cash that can be easily accessible and have little risk of loss of value. Saving is often intended to reach shorter-term financial goals, like creating a fund for emergencies or saving a house down payment.
Investing is when you put money at risk to potentially make more money. When investing, you may trade stocks, mutual funds, or other assets because there’s a potential for a return on the investment, but you are also at risk of losing the value of the investment. The goal of investing is to grow your wealth over time by taking advantage of capital appreciation and compounded returns. This strategy is typically used to reach long-term goals, like building wealth for retirement or saving for a child’s college fund.
Another thing to consider when deciding between saving and investing is how inflation affects your money with each strategy. With investing, there is a potential for your investments to keep up with inflation, which may be ideal in a high inflation environment. In contrast, inflation may eat away at your savings because the money you put into your account today will be worth less a year from now.
Once you understand the basics of saving and investing, you’re ready to begin planning for your financial future. Learn how SoFi Invest® can help.
A Few Headlines That Should Be on Your Radar
“Hypercasual” video games took off during the pandemic, and have attracted millions of dollars from venture capital and private equity firms. These super-simple games are quick and easy to develop, but have a low success rate per number launched. Analysts say players tend to quickly lose interest. Gaming companies are rethinking their strategies to maintain profits amid fierce competition. Read more >> Americans are becoming increasingly interested in purchasing EVs, especially with gas prices up near record highs. But there’s a pricing problem that’s also impacting the market. Because the price of raw materials used in EV batteries has nearly doubled, companies like Tesla (TSLA) are raising prices. It seems for the time being electric vehicles are stuck in the not-so-affordable category. If that changes, they could become as widespread as gas-powered cars. Read more >> Amazon’s (AMZN) Prime Day isn’t the big deal it once was, as declining demands pops its revenue balloon. Still, the event may provide a read on consumer sentiment all while it provides the company with a revenue-boost. Once characterized by sponsored events, celebrity appearances, and a special home page design, today’s event will be a dialed back version of its glory days. Read more >> When investing, you often want to know how much money an investment is likely to earn you. That’s where the expected rate of return comes in. Here’s how to calculate an investment’s expected return, along with a discussion around the value of the expected rate of return formula. Read more >>Not-So-Breaking News
- NIO (NIO) Hong Kong and Singapore share prices got a boost amid expectations for strong global demand for electric vehicles, as driven by consumer and government interest in lowering emissions. Some industry analysts predict growth in the sector in excess of 30% annually through 2025.
- Crypto hedge fund Three Arrows Capital defaulted on a $670 million debt repayment that was due Monday. The company’s leveraged investments resulted in a lack of solvency amid the recent rout in the cryptocurrency market.
- Spirit Airlines (SAVE) saw its share price slip after the company’s board unanimously recommended that stockholders accept the proposed merger with Frontier Airlines (ULCC). This comes after Frontier upped its offer amid competition from JetBlue Airways (JBLU), including an increased reverse-breakup fee, if the deal isn’t approved by regulators.
- Digital World Acquisition Corp’s (DWAC) directors have been subpoenaed by a Federal Grand Jury, putting its plans to merge with Donald Trump’s media company at risk. The goal of the merger is the launch of a social media app the former president calls “Truth Social,” designed to challenge established media outlets.
- Prosus (PROSY) has announced it will sell over $134 billion in shares of Tencent Holdings (TCEHY) so that it can buy back its own shares. The move will break the company’s stated commitment to maintain its stake in the Chinese internet company.
Financial Planner Tip of the Day
"While buying low and selling high is a good strategy in theory, timing the market does not work in practice. Rather than trying, focus on recurring contributions that utilize dollar cost averaging."
Brian Walsh, CFP® at SoFi