Top Story
Stocks Waver, Fed Chair Powell Speaks in Europe, Mortgage Applications Rise
• US stocks were mixed Wednesday following a choppy session. All three major indexes fluctuated between positive and negative territory. As we near the end of Q2, investors are awaiting a new round of earnings reports. Broadly speaking, rising rates and record high inflation seem to be weighing on sentiment.
• Federal Reserve Chair Jerome Powell spoke at the European Central Bank’s annual conference. He admitted the Fed could end up going too far in its fight against inflation, implying a recession is possible. That said, Powell argued the greater risk lies in failing to achieve price stability.
• Mortgage applications moved higher in the MBA’s weekly survey. The overall number grew by 0.7%. Demand for mortgages has been on the decline amid rising rates and the higher costs they bring.
What to Be on the Lookout for Today
• The May PCE or Personal Consumption Expenditures index will be released. This is the Federal Reserve’s preferred inflation gauge. In April, the core PCE, which strips out highly volatile food and energy prices, rose 4.9% from a year ago.
• Watch for initial and existing jobless claims. Initial claims are down near historic lows in recent weeks as the labor market remains tight.
• Lighting and building management firm Acuity Brands (AYI) will hand in its latest report card. The company beat on profit during its last earnings call, while its share price hit a new one-year low two weeks ago.
Why You Should Start Retirement Planning as Early as Possible
Typically, the earlier you start investing the better – even if you’re only saving a small amount. Typically, having a long time horizon means you have time to weather the ups and downs of the markets.
What’s more — and this is critical — the earlier you invest, the more time you’ll be able to take advantage of compound gains, the returns you earn on returns that help supercharge your ability to save. Compound gains are the reason small amounts of money saved and invested now can go further than much larger amounts of money saved later. The more time you have, the more returns compound gains can deliver.
Example: Imagine you are 25 with plans to retire at 65. That gives you 40 years to save. If you save $100 per month with an average annual return of 6% compounded monthly at age 60, you would have saved about $200,244.
Now, let’s imagine (as a hypothetical example) that you waited for 30 years, until age 55 to start saving. You put $1,000 a month into your retirement account. With an average annual return of 6% compounding monthly, you’d only have about $165,698 by the time you’re ready to retire — far less than if you’d started saving smaller amounts earlier.
The lesson? The longer you wait to start saving for retirement, the more money you’ll have to save later to make up the difference. Depending on your financial situation, it could be difficult to find these extra funds when you’re older.
Even if you don’t have a lot of room in your budget to start investing, putting away what you can as early as you can, can go a long way toward saving for retirement. As you start to earn more money, you can increase the amount of money that you’re saving over time.
If you’re ready to learn more and open a traditional or Roth IRA account, get started by opening a brokerage account on the SoFi Invest® platform. You can open an account and get started in less than five minutes.
A Few Headlines That Should Be on Your Radar
Movie attendance has been strong this year with several films bringing in double-digit revenues over the weekend. Soaring inflation presents a new threat to the industry’s sustained rebound. Blockbusters like Top Gun: Maverick are raking in millions, lending support to this year’s box office success. Many more films are coming down the pike, including Disney (DIS) and Marvel blockbusters. The hope is demand will continue as inflation erodes consumers’ purchasing power. Read more >> Despite recent market attempts at a rally, SoFi’s Head of Investment Strategy argues market signals indicate we may not be out of the woods yet. Comparing Consumer Discretionary and Consumer Staples sectors can be a solid indicator of not only how consumer sentiment is trending, but also how investors are feeling about the prospect of consumer spending. Read more >> In the bid to fight climate change, new technology has emerged. Companies use giant fans to remove CO2 from the air and it can also be stored in concrete, or turned into biofuel. The concrete is made stronger with the CO2, and it’s permanently stored as a result. One of the more intriguing options involves adding antacid to the ocean. Read more >> Music NFTs are growing in popularity as the music industry searches for new income streams, and blockchain technology makes it all possible. We’ll explain what music NFTs are, how they work, and more. Read more >>Not-So-Breaking News
-
H&M (HNNMY) beat analyst expectations for profit, but warned June sales may sag by as much as 6%. The Swedish budget retailer has seen its revenue decline amid two ongoing challenges. These include a suspension of sales in Russia and a boycott of its products in China, after H&M declined to source cotton from the country’s Xinjiang region.
-
Walmart (WMT) is being sued by the FTC. The regulators allege the retailing giant offered in-store money transfer services that it knew were vulnerable to fraud, and therefore failed to protect its customers.
-
Beyond Meat (BYND) will soon offer a “sliced-steak” option, thereby expanding its current ground meat alternatives. CEO Ethan Brown calls it one of the plant-based food company’s “best products to date.” Shares of its stock have been hammered, declining about 85% over the last 12 months.
-
Delta (DAL) announced it will allow free flight changes this Fourth of July weekend. The option applies to the carrier’s whole network. The move comes following a large number of cancellations and delays caused in part by staff shortages.
-
Tesla (TSLA) says it plans to close its San Mateo, CA office. The move will trigger layoffs, as approximately 200 employees work at the site that’s related to the automaker’s driver assistance systems, called Autopilot.
Financial Planner Tip of the Day
"For money you’ll use in three to seven years, you may be prepared to take slightly more risk than a savings account but still want to take less risk than your retirement money. You might choose to use a brokerage account where you can invest that money in stocks, bonds, cash, or other asset classes. Just be sure to keep your comfort with risk in mind."
Brian Walsh, CFP® at SoFi