Thursday,
September 1, 2022
Market recap
Dow Jones
31,510.43
-280.44 (-0.88%)
S&P 500
3,955.00
-31.16 (-0.78%)
Nasdaq
11,816.20
-66.93 (-0.56%)
Top Story
Market Slides For Fourth Straight Day, Economy Adds Fewest Jobs Since Early 2021
• US stocks fell Wednesday in a choppy session. Investors remain focused on the Fed’s tightening monetary policy, and Chair Jerome Powell’s stated willingness to steer the economy into a recession in order to slow inflation.
• Cleveland Fed President Loretta Mester sent hawkish signals. Mester said she sees the central bank’s target rate rising to 4% next year.
• ADP released its retooled private payrolls report. The economy added just 132,000 private jobs in August. That’s the lowest number logged since early 2021.
What to Be on the Lookout for Today
• Initial and existing jobless claims are due. Initial filings fell last week, coming in at 243,000 which was below estimates of 255,000.
• Challenger job cuts for August will be released. The figure dropped in July.
• ISM will publish its manufacturing PMI for August. The sector grew in July per the most recent report.
• Sporting apparel company Lululemon (LULU) is scheduled to hold a conference call with analysts to discuss its most recent earnings. The company recently held a “we made too much” pre-Labor Day sale.
Why Are Most Savings Accounts Still Earning Little Interest?
The Federal Reserve is raising interest rates at a rapid pace, the steepest rate hikes in decades, all in an effort to bring down inflation. With all the talk of rising interest rates, from mortgages and credit cards to student loans, you may wonder why the money in your savings account is still earning little interest.
Unfortunately, most banks may not be willing to increase interest rates on savings accounts, even with the Fed acting aggressively. Overall savings increased during the Covid-19 pandemic, so banks and other financial institutions can use their current deposits to fund their operations. They are not hurrying to attract more deposits with more attractive savings rates. The average interest rate for a savings account is only 0.13%, up from just 0.06% in March when the Fed first started its aggressive rate hiking campaign. And for interest checking accounts, the rate remains 0.03%.
It can be frustrating to have your cash sitting in a savings or checking account, only to earn paltry interest. Fortunately, if you sign up for direct deposit with a SoFi Checking and Savings account, you can earn up to 2.00% APY1, 66x the national average checking account rate.
A Few Headlines That Should Be on Your Radar
After its recent meme stock rollercoaster ride, where does Bed Bath & Beyond (BBBY) go next? The company is planning to close stores, lay off workers, and sell shares to free up cash. Around 150 of its flagship stores will close. The retailer is also switching up its merchandising and inventory strategy. It is keeping one of its subsidiaries after deciding against a plan to sell it off. Read more >> If you’re planning on taking a cruise anytime soon, you could end up getting high speed internet from SpaceX. It’s something Royal Caribbean (RCL) is rolling out in the coming days. The cruise industry has yet to recover from the pandemic, and much like the airlines it deals with staffing issues. Meanwhile, SpaceX’s Starlink stays busy, including what it’s got going on with T-Mobile (TMUS). Read more >> Despite cooling across other parts of the economy, the labor market continues to churn out signals of strength, in what one might refer to as an “employee’s” market. SoFi’s Head of Investment Strategy explains why that’s not necessarily a good thing, given our current environment and the relationship between the Fed and labor market. Read more >> An inconsistent income makes it all the more important that you budget well to make sure that you can cover necessary expenses while still working toward your financial goals. It can be difficult to establish a budget when your income is irregular. Learn some helpful tips for budgeting with a fluctuating income. Read more >>Not-So-Breaking News
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The FDA authorized a new round of COVID-19 booster shots that target the Omicron variant. According to the Health and Human Services Department, the US government has secured 171 million doses of Pfizer’s (PFE) and Moderna’s (MRNA) booster shots.
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Chinese tech giant NetEase (NTES) announced its acquisition of French game developer Quantic Dream, which makes Star Wars (DIS) games. This marks NetEase’s first fully owned European gaming studio, and continues its aggressive push to expand internationally.
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Snap (SNAP) reportedly plans to lay off 20% of its workforce amid what’s been a challenging year for the social media network. Layoffs are already underway in various departments, such as developer products and hardware.
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PHV Corp. (PVH), parent company to Calvin Klein, posted mixed results and cut its outlook for 2022. This continues a trend as other retailers have offered downbeat guidance recently while blaming inflation and supply chain snags.
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HP (HPQ) trimmed its annual profit forecast and missed on revenue in its most recent quarter. The company noted consumer demand for PCs and printers has fallen significantly.
Financial Planner Tip of the Day
“Late payments can have a large effect on your credit score for a long period of time. If there are any late payments in your history, you may be able to minimize their impact by creating a record of on-time payments in the future. Setting up autopay is one way to make sure payments are made regularly and on time.”
Brian Walsh, CFP® at SoFi