Tuesday,
August 16, 2022
Market recap
Dow Jones
33,912.44
+151.39 (+0.45%)
S&P 500
4,297.14
+16.99 (+0.40%)
Nasdaq
13,128.05
+80.87 (+0.62%)
Top Story
Stocks Rise Ahead of Another Busy Week in Earnings, Oil Prices and Homebuilder Confidence Dip
• US stocks rose Monday as investors shook off negative economic news from China. All three major indexes rebounded off early losses. Chinaâs central bank unexpectedly cut rates after the country experienced diminished output. Wall Street analysts suggest the market is braced for bad news at present.
• Investors may have largely been in a holding pattern. Itâs another busy week of earning data, especially within the retail sector. The market will be studying how consumer spending is holding up amid inflation.
• Oil prices fell, likely in response to the news out of China. The nationâs second-largest economy, China accounts for 15% of the worldâs oil consumption. Traders perceiving a shift in demand put downward pressure on energy prices.
• Homebuilder confidence fell for the eighth straight month in August. The NAHB/Wells Fargo (WFC) Housing Market Index dropped to its lowest level since May 2020. Multiple challenges are facing the sector including rising interest rates, persistent supply chain problems, and elevated home prices.
What to Be on the Lookout for Today
• The housing market stays in focus as Julyâs building permits and housing starts are due. In June, housing starts declined for the second month in a row, hitting a nine-month low in the process. The number of building permits that were issued also fell. Industry analysts attribute both of these trends to softening demand for housing, largely due to rising mortgage rates.
• Walmart (WMT) will report its second-quarter earnings. The big-box retailer announced plans last week aimed at developing its own streaming TV platform, perhaps in a bid to further compete with rival Amazon (AMZN). Home Depot (HD) is also scheduled to hand in its latest report card.
The Difference Between Saving and Investing
Many people use the terms âSavingâ and âInvestingâ interchangeably because theyâre both critical elements to ensuring financial stability. But there are key differences. Generally, saving provides a safety net for unexpected expenses and short-term spending goals, while investing is a strategy to help build long-term wealth.
Saving helps you maintain money for short term goals, garners minimal risk, and makes cash easily accessible, but provides relatively low returns.
Investing, on the other hand, is a strategy for growing money toward long term goals. It requires higher risk and may take a while before you can access your invested funds, but there is higher earning potential.
Certain scenarios make one strategy better than the other. Itâs recommended to prioritize saving when you donât have an adequate emergency fund, you need money in the short term, and/or you want to access cash as quickly as possible. Investing is a recommended approach when youâve paid off high-interest debt, you want to build long-term wealth, and/or youâre taking advantage of a 401K or IRA.
SoFi members with direct deposit can earn up to 2.00% annual percentage yield (APY) on all account balances in their Checking and Savings accounts. Consider opening an account and setting up Direct Deposit with SoFi today.
A Few Headlines That Should Be on Your Radar
Before you buy a new car or plan any renovations around your house, read this. The new spending bill awaiting President Bidenâs signature includes a series of tax incentives and rebate programs. Individual consumers could qualify for benefits valued up to $10,000 or more when the various tax breaks and incentives are combined. Itâs part of the legislationâs focus on climate change. In a bid to reduce emissions and diversify the nationâs energy needs, things like solar energy and electric cars are being incentivized. Hereâs a comprehensive look at the numbers and how you could qualify. Read more >> Facebook Marketplace (META) is partnering with Doordash (DASH) to make consumer-to-consumer deliveries. Goods will be picked up and delivered within 48 hours to locations up to 15 miles away. For DoorDash, this represents an opportunity to further brand loyalty and give their drivers more jobs. For Meta, the goal is to attract people back to its social media network. Marketplace has some traction while TikTok dominates elsewhere. Read more >> Amid the skyrocketing cost of groceries, restaurants make the case that they are now a low-cost alternative. This message is being conveyed both to investors during earnings calls and in advertisements to consumers. Grocery bills notched up over 13% for the year ending in July, making the 7.6% rise in dining out seem pretty reasonable in comparison. What does that mean for meal-at-home companies? Read more >> Reaching financial goals isnât about living a life of deprivation â itâs about setting the right habits and sticking to them. Try these 10 ideas for how to spend your money wisely and earn a great feeling of accomplishment. Read more >>Not-So-Breaking News
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YouTube (GOOGL) will soon offer streaming services via a âchannel store.â The app will allow users to choose from a variety of services.
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Hedge fund manager Dan Loeb announced a new stake in Disney (DIS). Loeb is also encouraging the entertainment conglomerate to spin off ESPN and to fast-track its acquisition of Comcastâs (CMCSA) shares of Hulu. He argues Disney would gain flexibility going forward and he sees upside in a Hulu-Disney+ integration.
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Wells Fargo (WFC) announced it is rethinking its strategy for its mortgage business given the âdramatically smaller originations market." The shift follows a 53% decrease in lending revenue for the 12 months ending in June, as interest rates rose and mortgage applications fell.
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Ford (F) is facing the potential recall of its Ford and Lincoln vehicles. More than 50 drivers reported their carsâ brake hoses ruptured.
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Weber (WEBR) reported lower-than-expected profit but beat on revenue. The grill maker announced it will tighten its cost controls through layoffs and the suspension of its quarterly dividend.
Financial Planner Tip of the Day
âHaving trouble staying motivated to save? Setting goals can help offset those discouraging feelings that send savers spiraling. Identify one or two short-term goals (such as an emergency fund), then consider one or two long-term goals (like retirement). Setting concrete goals can give you something to look forward to as you save, which helps keep spirits high!â
Brian Walsh, CFPÂź at SoFi