Wednesday,
August 24, 2022
Market recap
Dow Jones
32,909.59
-154.02 (-0.47%)
S&P 500
4,128.73
-9.26 (-0.22%)
Nasdaq
12,381.30
-0.27 (-0.002%)
Top Story
Stocks Waver As Wall Street Worries About More Rate Hikes
• After a two-day sell off that saw the Dow Jones Industrial Average notch its worst day since June, US stocks wavered on Tuesday. Investors are no longer betting that the Federal Reserve will slow its pace of interest rate hikes. In fact, Wall Street is now banking on an aggressive stance from the central bank in order to tame inflation.
• Economic data didn't help sentiment on The Street. Rising mortgage rates and low inventory have caused many would-be homebuyers to cancel contracts. This caused sales of new homes to fall 12.6% last month from June and sales of existing homes were down by 20.2% for the trailing year. Flash readings for services and manufacturing PMI also came in below expectations yesterday.
• Multiple outlets report that President Biden is expected to make an announcement on student loan forgiveness and/or extend the payment pause on federal student loans as soon as today. A potential decision comes just a week ahead of the White Houseâs self-imposed August 31 deadline. We will continue to monitor the situation and provide a full overview if and when an announcement is made.
What to Be on the Lookout for Today
• The National Association of RealtorsÂŽ will publish its pending home sales index for July, tracking the number of signed contracts for the sale of homes. Juneâs index fell 8.6% from the previous month, which analysts blamed on surging mortgage rates. Julyâs durable goods orders and core capital equipment orders are also slated for mid-week release.
• Chipmaker NVIDIA (NVDA) is scheduled to hand in its latest report card Executives will discuss the firmâs second-quarter and fiscal-year 2023 earnings. Reports indicate NVIDIAâs next-generation âAda Lovelaceâ graphics cards will hit the market soon, coupled with a price drop for earlier models.
Home Buying 101: Knowing How Much House You Can Afford
When the idea of buying a home becomes a real possibility, figuring out what you can actually afford (or what loan amount you can qualify for to borrow) can be a little tricky.
You may have a general idea in terms of what you want your mortgage loan amount and monthly payment to be, but that number may get a little hazy during late night sessions of online house shopping.
Itâs easy to start gravitating toward those professionally lit photographs of expansive, renovated kitchens and manicured gardens. You might start to think: Whatâs another $100,000, right?
Or maybe you really do need an extra bedroom, additional garage space, or a pool with a swim-up bar. Why not?
You can see with these examples how a personâs initial home-buying budget can quickly balloon out of control. Fortunately, we created a home affordability calculator that might help give you a sense of a suitable home-buying budget.
Just input five quick numbers, and weâll tell you how much house you could really afford.
A Few Headlines That Should Be on Your Radar
Market experts think a housing recession is here, but buyers expecting price relief may be disappointed. Inventory is tight and prices remain high, putting sellers in a position of relative strength. But as demand slackens, buyers are getting a little of their power back. Read more >> The IPO market is on track to post its worst performance in over two decades, frozen by a host of macroeconomic headwinds. At this point last year, traditional public offerings had already raised more than $100 billion. So far this year, that same figure stands at just $5.1 billion. The IPO freeze is important for Wall Street and Main Street alike. When fewer companies go public, it's typically a bad sign for both investors and the economy. Read more >> Since COVID-19, interest in vacation travel has surged, while business travel remains below prepandemic levels. Hotels looking to capitalize on the booming leisure travel market are turning to âresortainmentâ to attract guests. Hotels and resorts are endeavoring to provide enticing experiential offerings to guests. That may be as simple as a rooftop bar and minigolf, to the more ambitious theme park option. Read more >> Todayâs first-time homebuyers may face challenges like increased competition, student loan debt, and a limited credit history. Luckily, these factors donât have to come between you and your first home. If you know how to navigate them, you may land a home you love without breaking the bank. Read more >>Not-So-Breaking News
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Twitterâs (TWTR) former security lead, Peiter âMudgeâ Zatco, has accused the social media company of âextreme, egregious deficienciesâ in regard to security and privacy. He also claims the company lied about its spam removal and bot-detection practices. Twitter executives deny the allegations.
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Macyâs (M) reported better-than-expected results on the top and bottom lines but cut its guidance for the year. Company executives anticipate inflation-squeezed consumers will reduce spending on apparel.
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Dickâs Sporting Goods (DKS) posted earnings and revenue above Wall Street estimates. The company also raised its full-year forecast. Golf, team sports, and footwear were among the best-performing categories.
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Zoom (ZM) missed on revenue but beat analyst forecasts for profit. The online video software company cut its full-year outlook citing unfavorable economic conditions and a shift back to normal sales following the pandemic-driven uptick in demand.
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JD.com (JD) announced quarterly earnings and revenue above Wall Street projections. The Chinese ecommerce companyâs CEO LEI Xu credited its âsupply chain capabilities and efficient operationsâ for the strong results.
Financial Planner Tip of the Day
âWhen shopping for refinancing rates, pay close attention to loan terms, which can vary greatly depending on the lender. The longer the loan term, the lower the monthly payments will be, but that means more interest will be paid over the life of the loan. Conversely, a shorter loan term may mean higher monthly payments, but then less is paid in interest over the life of the loan.â
Brian Walsh, CFPÂŽ at SoFi