Thursday,
July 14, 2022
Market recap
Dow Jones
30,772.79
-208.54 (-0.67%)
S&P 500
3,801.78
-17.02 (-0.45%)
Nasdaq
11,247.58
-17.15 (-0.15%)
Top Story
Inflation At New 41-Year High, Stocks Sell Off, Fed Remains on Track for 75-Basis-Point Hike
• US stocks fell Wednesday following a trading session that was heavily influenced by the latest inflation report. June’s CPI checked in at 9.1% per the Bureau of Labor Statistics. That’s the highest rate of inflation since November 1981.
• Most analysts agree this keeps the Federal Reserve on track for a 75-basis-point hike at this month’s FOMC meeting. Last month the central bank enacted an identical hike, marking the largest such increase since 1994. The Fed is attempting to cool off the economy and cause prices to fall.
• Oil prices rose slightly. That said, both international benchmark Brent crude and US standard West Texas Intermediate are now trading below $100 per barrel. This is arguably because traders are worried the economy could enter into a recession, causing demand to fall.
• The euro fell below parity with the US dollar, meaning the two currencies are exchanging at a near one-for-one rate. That hasn’t been the case for nearly two decades, dating back to when the euro was brand new.
What to Be on the Lookout for Today
• The June Producer Price Index (PPI) will be published, outlining price increases from the perspective of manufacturers. Wholesale prices rose 10.8% in May on an annual basis and 0.8% on a monthly basis.
• Initial and continuing jobless claims will also be released. Last week saw the most Americans filing for unemployment benefits since January.
• JPMorgan Chase & Co. (JPM) hands in its latest report card. Fears of a recession have weighed on bank stocks as Wall Street worries about companies tied to broad economic growth. Investors will want to know more about how executives at the world's largest bank by assets view the outlook for the second half of the year.
Benefits of Direct Deposit
After the set-up process, using direct deposit has more benefits than drawbacks for many people. Some benefits of direct deposit include:
Convenience. Direct deposit means getting paid on payday whether or not an employee is in the office. A person using direct deposit could be at work, on vacation, or out sick, and their paycheck will still appear in their account.
Time-saving. Employees don’t need to head to the bank or ATM or use their banking app to upload a paycheck. Typically, direct deposit is instant, and the payee doesn’t need to do anything on their end.
Environmentally friendly. Using direct deposit can help reduce a payee’s carbon footprint on payday since there’s no physical check to print out and no need for a postal service to deliver it.
Secure. An automatic direct deposit means no keeping track of a paper paycheck. If an employee has signed the check and for some reason can’t cash it immediately, that could be a scary scenario if the check is lost.
More control of the flow of money. Depending on how a person sets up their direct deposit, they can designate where the money goes each payday. That means sending a portion of the deposit directly into savings, or multiple savings accounts for different goals. That could mean saving more in the long run.
With SoFi Checking and Savings®, members can easily set up direct deposit to their checking and savings account and earn interest on all the cash they deposit, without incurring account fees.
A Few Headlines That Should Be on Your Radar
Another report shows that inflation remains hot. That leaves some companies more vulnerable than others. It also helps investors anticipate what could happen next in a rising-rate environment. In a broad sense, consumers are spending more for products, and the entire economy is impacted. But what types of stocks are most affected with inflation at its highest level in decades? Read more >> The red-hot housing market of the last few years put sellers in the catbird seat, while many desperate homebuyers ditched contingencies as they fought to win the bidding war. It seems the tide is turning, and savvy buyers are demanding more flexible contracts. Contingency clauses in real estate deals may offer a way out for those experiencing buyer’s remorse. They may also provide an important means for homebuyers to “trust, but verify” the marketing while protecting their deposit. Read more >> Netflix (NFLX) plans to launch an ad-supported tier this year in an attempt to rebuild its subscriber base, and it’s taking the necessary steps. All this while the streaming giant is facing increasingly stiff competition and reported a loss of 200,000 customers earlier this year. The company is actively renegotiating contracts with entertainment studios to include their content on the new tier. The terms agreed upon will determine whether shows like You, Russian Doll, and The Crown will be available to viewers on the cheaper platform. Read more >> SoFi’s Head of Investment Strategy views the next two Fed meetings as the ones that will convince markets once and for all whether or not we could see a classic recession in the next 12 months. While there are many ways to look at inflation data, the month-over-month numbers are actually more indicative of the trend. Unfortunately for now, the monthly numbers are still hot, too. Read more >>Not-So-Breaking News
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Fastenal (FAST) saw its share price slide following a slight miss on revenue. The industrial supplies company saw its valuation fall despite meeting Wall Street expectations for profit. Fastenal said it was able to pass price increases on to customers with some of its products.
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Polestar (PSNY) has doubled its delivery of cars in 2022 in comparison to a year ago. The Swedish electric car company, which just went public in June, reiterated the expectation it will deliver 50,000 cars this year.
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Delta (DAL) reported better-than-expected revenue, but missed on earnings. Inflationary pressures have driven up costs, negatively impacting the air carrier’s bottom line.
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Google parent company Alphabet (GOOGL) has announced it will slow hiring into 2023. CEO Sundar Pichai cited “economic headwinds” and an “uncertain global economic outlook” as he called for a more cautious business approach.
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Spirit Airlines (SAVE) has postponed its shareholder meeting for the fourth time, rescheduling it for July 27. The company blamed ongoing talks between Frontier (ULCC) and JetBlue (JBLU), which have offered competing bids to acquire the budget carrier. Frontier CEO Barry Biffle requested the delay so he can attempt to build support from Spirit stockholders.
Financial Planner Tip of the Day
“Many checking accounts charge monthly maintenance fees, but you may be able to have them waived if you can meet certain requirements. Most commonly, you can skip the monthly fees if you set up direct deposits or maintain a certain account balance.”
Brian Walsh, CFP® at SoFi