Top Story
Conflicting Economic Reports Send Stocks Lower, Ethereum Merge Goes Off Without a Hitch
• US stocks fell Thursday as investors studied fresh economic data that, at times, painted a mixed picture. August retail sales beat expectations, but came in negative when autos were excluded, and manufacturing data suggests the economy is slowing. That said, jobless claims came in lower-than-expected.
• Inflation stays in focus as the retail sales data did little to alleviate concerns. Spending outside of cars dropped, which points to how rising prices have impacted consumer habits. Import prices also saw a smaller drop than what was forecast.
• Ethereum completed “the merge” without any issues. Some had referred to the event as the Y2K of cryptocurrency given the potential for technical setbacks. Proponents suggest the changes could usher in a new era for crypto.
• Energy prices plummeted after negotiators reached a tentative deal to avoid a rail strike. Crude oil fell, but natural gas posted the largest decline, as it would have been in high demand had trains been unable to deliver coal to power plants.
What to Be on the Lookout for Today
• The University of Michigan will publish September consumer sentiment. In August, consumer sentiment came in higher than expected.
• The university will also release this month’s inflation expectations report. Respondents were similarly upbeat about prices in August, with future expectations for inflation hitting its lowest mark since February.
The Types Of Credit You Have Can Impact Your Credit Score
Having multiple types of credit can have a positive effect on your FICO Score. In fact, credit mix accounts for 10% of your score. Being responsible with both revolving and installment credit accounts shows lenders that you can successfully manage your debts.
• Revolving accounts are those that are open-ended, such as a credit card. You can borrow money up to your credit limit, repay it, and borrow it again. As long as you’re conforming to the terms of the credit agreement, the account is likely to have a positive effect on your credit report and, therefore, your FICO Score.
• Installment accounts are closed-ended. There is a certain amount of credit extended to you and you receive that money in a lump sum. It’s repaid in regular installments over a set period of time. If you need additional funds, you must take out another loan. A personal loan is one example of an installment loan.
Credit mix won’t make or break your ability to qualify for a loan, but having a good mix of different types of debt indicates to lenders that you’re likely to be a good lending risk.
Track your credit score for free in the SoFi app, where the factors affecting your score are broken out to make them easier to understand.
A Few Headlines That Should Be on Your Radar
A tentative deal was reached to avoid a rail strike. But what were the sticking points throughout the negotiation, and how does it impact labor relations going forward? For several rail unions, the main roadblock wasn’t necessarily wages, but rather scheduling and staffing issues. That’s also true for other work stoppages. Meanwhile, many US employees say their pay check isn’t keeping pace with inflation. Read more >> The latest retail sales data shows most Americans are cutting back on spending. This makes sense given staples like food and energy cost more amid persistent inflation. For luxury goods, the opposite is true. Higher priced wine, travel packages, and sports cars are all experiencing a boom period. Why is that the case? Read more >> Many people are talking about the transition to electric vehicles. But what about the infrastructure that will be necessary to support this transition? TeraWatt is one company focused on building charging stations. TeraWatt recently secured over $1 billion in Series A funding. Here’s how they plan to use that money in a bid to improve the country’s EV infrastructure. Read more >> Despite rising prices, groceries are a staple. But how much is too much to spend on food each month? The average grocery bill depends a lot on where you live, but regardless of your location, there are several ways you can lower your bill. Read more >>Not-So-Breaking News
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Southwest Airlines (LUV) reported strong revenue trends during the third quarter, while also narrowing its sales guidance. The airline says leisure travel has been better-than-expected, adding that Labor Day holiday weekend bookings were robust as well.
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Health insurance giant Humana (HUM) raised its full-year profit forecast while also hosting its investor day yesterday. Humana credited the upbeat outlook to diminished COVID headwinds and lower-than-expected costs in its Medicare Advantage and Medicaid businesses.
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AIG (AIG) sold 80 million shares of its life insurance division Corebridge Financial (CRBG) at $21 per share in what was the year’s biggest IPO to date. That was at the low end of the company’s price range, but reports indicate AIG anticipated investor pushback following this Tuesday’s broad market selloff.
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Walmart (WMT) is introducing a new virtual try-on tool that lets online shoppers see how clothes might look on them. The feature makes use of technology the retailer acquired through the 2021 purchase of startup Zeekit. Reports indicate Walmart hopes to boost clothing sales as discretionary spending has taken a hit due to inflation.
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NextEra Energy (NEE) announced it intends to sell $2 billion worth of equity units, each of which will be issued in the amount of $50. The electric utility holding company says the net proceeds would be added to its general funds with an eye toward investing in energy and power projects.
Financial Planner Tip of the Day
“Payment history is the main factor that affects a person’s credit score, accounting for 35% of an overall FICO® score. By making on-time payments, limiting the number of new inquiries on their credit file, and working to pay down credit card balances, home buyers could potentially boost their credit score and qualify for a lower mortgage rate.”
Brian Walsh, CFP® at SoFi