Monday,
October 3, 2022
Market recap
Dow Jones
28,725.51
-500.10 (-1.71%)
S&P 500
3,585.62
-54.85 (-1.51%)
Nasdaq
10,575.62
-161.89 (-1.51%)
Top Story
Stocks Choppy To Close Out Ugly Month, Week, and Quarter
• US stocks were mixed Friday as investors studied a new round of inflation data. The PCE, a broad measure of consumer spending, grew 0.4% month-over-month. This data point is also the Fedās preferred measure of inflation.
• Equities and bonds remain under pressure as the market is wary of the central bankās rate-hike campaign. Many are convinced the Fedās aggressive stance will push the economy into a protracted downturn. Fed Vice Chair Lael Brainard spoke on Friday and said the central bank is committed to not pulling back prematurely on its tightening policy.
• The University of Michigan released its consumer sentiment survey and 5-year inflation expectations for September. Consumer sentiment rose slightly while inflation expectations moderated.
What to Be on the Lookout for Today
• The manufacturing sector is in focus as the S&P US manufacturing PMI for September is due. This metric surveys purchasing managers to get a sense of whether the sector is expanding, contracting, or staying the same. In August the index fell to its lowest point since July 2020 as new orders slipped.
• The Institute of Supply Management is also scheduled to release its manufacturing index for September. In August, ISMās manufacturing index fell 7.5% month-over-month, while raw material prices rose for the 27th month in a row.
• Augustās construction spending is due. In July, total construction spending slipped 0.4% month-over-month. This is largely due to diminished residential construction as rising mortgage rates and affordability issues have sapped demand.
The Week Ahead at SoFi
Calling all Residents and MDs ā join us this week for a special med school debt webinar. Weāll break down all your options when it comes to repayment. Save your seat in the SoFi app!
A Few Headlines That Should Be on Your Radar
This week, investors will study how rising costs are impacting the economy as well as industries like cannabis and alcoholic beverages. Rising costs are putting pressure on manufacturing and real estate. Will the job market continue to hold strong? Plus, investors will study how inflation is impacting both cannabis and alcoholic beverages during this weekās earnings calls. Read more >> CarMax (KMX) reported a 54% decline in its quarterly earnings, which led to a broad selloff for car dealership stocks. This points to an affordability problem. For would-be car buyers, there are several reasons why this may not be the best time to buy. In fact, getting around town through alternate means for the time being could be the wise choice. Read more >> The S&P 500 is down over 20% year to date, causing understandable anxiety among investors planning for retirement. Both stocks and bonds are trading in bear market territory, so what can you do to protect your 401K? Financial advisors coach that retirement planning is based on long-term thinking. Weāve got some numbers to help keep things in perspective ā plus a series of steps you might consider. Read more >> When youāre budgeting as a new doctor, itās important to establish smart spending habits and financial goals. These strategies can help you get you started. If youāre a doctor, the beginning of your career marks a new phase of your earning power. Itās also a prime opportunity to get yourself on sound financial footing. Read more >>Not-So-Breaking News
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Several fitness-related stocks took a hit after Nike (NKE) announced it will be cutting prices in a bid to clear out excess inventory. The company noted it expects gross margins to come under pressure for the rest of the year. Both Lululemon (LULU) and Under Armour (UA) saw their share prices dip on the news as well.
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After Micron Technology (MU) shared disappointing results for its fiscal fourth quarter there are concerns for the chip sector as a whole. Micron executives issued guidance for revenue that is $1 billion lower than expected. Some analysts say the current semiconductor glut could be worse than previously thought.
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The FDA approved a drug designed to slow the progress of Lou Gehrigās disease, also known as amyotrophic lateral sclerosis, or ALS. Thereās some controversy behind the move because the decision is based on just a single phase 2 clinical trial. Typically at least two are required. Amylyx Pharmaceuticals (AMLX) of Massachusetts developed the drug.
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Rent-A-Center (RCII) cut its third-quarter sales guidance, citing changing consumer behavior. Executives attribute this to inflation as well as macroeconomic conditions. Still, Chief Executive Mitch Fadel says the company remains confident in its long-term resiliency.
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Persistent inflation appears to be taking a toll on Americansā finances, with six in 10 living paycheck to paycheck as of August, according to a recent LendingClub (LC) report. Thatās up from this time last year when the number checked in at 55%. Even among those earning six figures, 45% say theyāre living paycheck to paycheck.
Financial Planner Tip of the Day
āThere are studies that show that people who write their goals down greatly improve the chances that theyāll succeed at those goals. You may find it valuable (and fun) to take this idea a step further and create a vision board or draw out your goals.ā
Brian Walsh, CFPĀ® at SoFi