Tuesday,
July 12, 2022
Market recap
Dow Jones
31,173.84
-164.31 (-0.52%)
S&P 500
3,854.43
-44.95 (-1.15%)
Nasdaq
11,372.60
-262.71 (-2.26%)
Top Story
Stocks Slip to Start the Week, Median Term Inflation Expectations Decline
• US stocks fell Monday as investors are looking ahead to this week’s latest inflation data as well as a new round of earnings reports. Some analysts are convinced companies will cut back forecasts amid soaring costs and higher inflation.
• Oil prices continued their decline after international standard Brent Crude saw its price per barrel fall 4% last week. Market observers say this is tied to concerns over a broader slowdown.
• According to the New York Fed, one-year expectations for inflation rose from 6.6% in May to 6.8% in June. Meanwhile, three-year expectations for inflation declined to 3.6%, from 3.9%, month-over-month.
What to Be on the Lookout for Today
• The NFIB small-business index for June will be published. Small business confidence fell in May largely due to inflation as well as a tight labor market that's driving up wages.
• PepsiCo (PEP) is scheduled to report its second-quarter earnings. The multinational food and drink conglomerate generated more than $79 billion in net revenue last year. With that said, Wall Street will be watching the company closely to see how it is navigating global price increases.
The 2-Year and 10-Year US Treasury Yield Curve Remained Inverted. This Sometimes Indicates A Coming Recession.
A quick look at an inverted yield curve will show it curving downward as bond maturities lengthen, which can be a sign of economic contraction.
Since 1955, an inverted yield curve has preceded all nine of the US recessions that have occurred. Not every inverted yield curve has a recession come after it, but it can be an early warning sign.
The reason is that, historically, an inverted yield curve can reflect significant shifts in the economy or financial markets. The yield curve might invert because investors expect longer-maturity bonds to offer lower rates in the future, for example. One reason for those lower yields is that often during an economic downturn investors will seek out safe investments in the form of longer-duration bonds, which has the effect of bidding down the yields that those bonds offer.
Navigating a recession can be overwhelming, but being prepared before an economic downturn hits can help you get through to the other side successfully. SoFi has created a hub to provide you with information and resources to help guide you through uncertain economic conditions and market volatility. Check out all the articles and resources in SoFi’s recession help center.
A Few Headlines That Should Be on Your Radar
There’s a number of possibilities in the Twitter (TWTR) saga, now that billionaire Elon Musk has announced he wants to cancel the deal. A new question also emerges: what’s next for the social media platform? Musk could be forced to pay even more than the negotiated $1 billion break up fee. It’s even possible a judge forces him to complete the deal. For Twitter, lengthy legal proceedings, distracted employees, and a brand new search are likely on the horizon. Read more >> The travel industry is expecting juicy revenues this summer, but on the heels of the pandemic’s woes, Expedia (EXPE) and Bookings Holdings (BKNG) are bracing for a new threat to their bottom lines. Google Travel (GOOGL) is hoping to entice consumers away from entrenched industry leaders. Consumers may well benefit from the price competition on hotels. Success in snagging a deal on airfare will be harder to achieve. Read more >> The price of skinless boneless skinless chicken breast is up 41% year-to-date. Americans hope Tyson Foods (TSN) can boost supply and make groceries more affordable. Solutions include using different breeds of chickens and more automation technology – including the ability to recapture cooking oil. Read more >> Seasonal changes to your routine can lead to changes in your spending patterns. Learn how to keep to a summer budget and save money for your vacation. Keep reading for 10 tips on how to save money in the summer and how to stick to a summer budget. Read more >>Not-So-Breaking News
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Imax Corp. (IMAX) reports it took in $23 million in box office receipts for this past weekend’s opening of Thor: Love and Thunder. The Disney (DIS) Marvel film drew 10% of its domestic box office from North America, but recorded a top 10 all time opening in 17 international markets.
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Several China-based electric vehicle manufacturers received some unwelcome news when Beijing announced a new set of COVID-related restrictions over the weekend. Nio (NIO), XPeng (XPEV), and Li Auto (LI) all saw their share prices slip.
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A number of casino operators in Macau took a hit when city officials announced casinos will be shut down for a week to slow the spread of COVID-19 infection. Reports from the special administrative region of China say the streets are basically empty amid the casino closures.
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After a number of files and emails were leaked, Uber (UBER) has been accused of engaging in unscrupulous business practices. Reports suggest the ride-hailing company attempted to gain favor with political leaders and used a “kill switch” to prevent police from accessing certain data during raids. Uber contends the company’s values have changed, adding past behavior was out of line with “present values.”
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Railcar maker Greenbrier Companies (GBX) missed Wall Street’s expectations for profit by a wide margin during its fiscal third-quarter, but beat on revenue. The company said its manufacturing production increased all while inflation and the war in Ukraine dragged on its bottom line.
Financial Planner Tip of the Day
“Fees and other trading costs can take a big bite out of crypto investor’s returns. But understanding how fees work and planning your trading strategy to minimize them can reduce their impact on returns.”
Brian Walsh, CFP® at SoFi