Friday,
September 23, 2022
Market recap
Dow Jones
30,076.68
-107.10 (-0.35%)
S&P 500
3,757.99
-31.94 (-0.84%)
Nasdaq
11,066.81
-153.39 (-1.37%)
Top Story
Dow Loses Over 100 Points as Central Banks Tighten, Oil Prices Rise Amid Russia-Ukraine Concerns
• US stocks fell Thursday as the market digested the Fedâs rate hike and comments from Chair Jerome Powell. Wednesdayâs policy decision marked the central bankâs fifth hike of the year and the third-straight 75-basis-point hike. Powell also said there is no âpainless wayâ to tame inflation, which could have added to recessionary fears.
• Overseas, several central banks made policy decisions yesterday. The Bank of England raised its policy rate for the seventh-straight time. The Swiss National Bank hiked its key policy rate up to 0.5%, becoming the final European central bank to abandon negative rates.
• Oil prices rose as concerns tied to the war in Ukraine have intensified. Earlier this week, Russian President Vladimir Putin ordered the mobilization of reserves, which could escalate the armed conflict. This move potentially threatens to diminish the worldâs oil supply, putting upward pressure on prices.
What to Be on the Lookout for Today
• Flash PMI readings for manufacturing and services are due for September. These reports will keep inflation in focus, as investors want to know how rising prices are impacting businesses in both the manufacturing and service sectors.
• Federal Reserve Chair Jerome Powell will deliver comments concerning the economy and the central bankâs monetary policy. Heâs speaking at an event moderated by Vice Chair Lael Brainard and Fed Governor Michelle Bowman.
Understanding the Credit Rating Scale
The FICO Score uses a scoring model that sources data from credit bureaus to evaluate your financial standing â the result of which is leveraged by lenders to determine your candidacy for certain loan terms. Elements used in the FICO scoring model include payment history, credit utilization (amount owed), length of credit history, credit mix, and new credit.
Wondering what these terms mean? Letâs break them down. âPayment historyâ looks at how reliable you are when it comes to paying bills on time. âAmount owedâ is how much debt youâre currently carrying â and more specifically, âcredit utilizationâ focuses on the amount of credit youâre using relative to the amount of credit available to you. Lenders generally like to see a credit utilization ratio of 30% or lower. âLength of credit historyâ looks at the age of your newest and oldest accountsâthe longer the better. âCredit mixâ evaluates the type of debt you have â a desirable mix is a combination of revolving debt (i.e. lines of credit) and installment debt (i.e. loans with fixed repayment terms). Last, but not least, ânew creditâ looks at accounts youâve opened recently.
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
Airline executives are warning that higher flight prices are on the horizon. This is largely the result of the Russia-Ukraine conflict, a decline in US oil refining capacity, and one other key reason. Itâs easy to assume that airlines are raising prices to chase higher profits. But, they might be raising prices just so that they can keep the lights on. Read more >> Hertz (HTZ) has agreed to buy 175,000 EVs from GM (GM). As evidenced by its past deal with Tesla (TSLA), the upfront cost could be worth it. There are more EVs coming to the nationâs rental car companies. Hereâs what that could mean for consumers, and why itâs potentially great news for the shifting auto industry. Read more >> Therabody, the company behind the top selling massage device TheraGun, is going beyond percussive therapy. It also just raised $165 million in a growth equity round. After being founded in 2008 in a bid to help overcome pain from traumatic injury, Therabody is moving into the mind. Specifically, itâs rolling out eight new products â including a pair of smart goggles and corresponding sound therapy. Read more >> Is there a difference between ârichâ and âwealthyâ? Short answer: yes. Though lifestyles appear similar, the key difference manifests in sustainability over time. Read more >>Not-So-Breaking News
- Royal Caribbean (RCL) announced eased COVID-19 testing and vaccination requirements have led to an increased number of bookings in 2023. The cruise operator reported demand is strong, adding its sales activity is outpacing pre-pandemic levels observed in 2019.
- Darden Restaurants (DRI), parent company of Olive Garden, met its first-quarter expectation for profit, but fell short in terms of same-store sales. Executives blamed weakness at its flagship Olive Garden and LongHorn Steakhouse chains.
- Consulting company ââAccenture (ACN) disappointed investors by sharing a downbeat outlook, although it did beat expectations on the top and bottom lines. Revenue was dragged 7.5% lower due to unfavorable foreign currency exchange rates.
- Target (TGT) is looking to hire 100,000 seasonal workers for the holiday shopping season, and deals will start early this year. Some markdowns are set to begin October 6. Target hired the same number of seasonal workers around this time last year.
- Tesla (TSLA) announced itâs performing an over-the-air software update for nearly 1.1 million US vehicles due to a problem with the automatic window reversal system. Apparently, the current system could fail to detect an obstruction, making it more likely a finger or arm could be pinched in a closing window.
Financial Planner Tip of the Day
âAn integral part of financial wellness is having a cash reserve. Research shows that having cash to cover the unexpected has the biggest impact on financial stress, anxiety, and satisfaction.â
Brian Walsh, CFPÂŽ at SoFi