Monday,
October 10, 2022
Market recap
Dow Jones
29,296.79
-630.15 (-2.11%)
S&P 500
3,639.66
-104.86 (-2.80%)
Nasdaq
10,652.40
-420.91 (-3.80%)
Top Story
Stocks Slip With Rates in Focus, Declining Unemployment Could Inspire More Hikes
• US stocks fell Friday as investors studied September’s jobs report. While the economy added fewer jobs than expected last month, the unemployment rate ticked down to 3.5% from 3.7% in August. That shows a still robust jobs market, which will likely keep the Federal Reserve on track for more rate hikes, weighing on equities.
• New York Fed President John Williams said the target rate will probably need to go up to 4.5% over time. At present, the federal funds rate is set between a lower limit of 3% and an upper limit of 3.25%. This figure helps guide what banks and lending institutions charge each other for overnight deposits.
• As the market expresses its concerns over the central bank’s hawkish stance, more inflation data is on the way. Later this week when the September CPI is printed investors will get a sense of how the Fed’s rate hike campaign is impacting prices.
What to Be on the Lookout for Today
• Due to the holiday, it’s quiet on the economic calendar. The markets are open but no major reports are due.
• Similarly, no significant earnings calls are scheduled. Later this week the new earnings season kicks off in earnest.
The Week Ahead at SoFi
Whether you’re applying for colleges or applying for jobs, this week’s events will help you put your best foot forward. Save your seat in the SoFi app!
A Few Headlines That Should Be on Your Radar
Fed minutes and the latest inflation report are released this week. Big banks also kick off the third quarter earnings season. Keep an eye on PepsiCo (PEP) as well. The multinational company reports earnings on Wednesday and investors want to know more about its recent investment in the energy drink market. This past summer PepsiCo took a $550M stake in Celsius, which some analysts think has done a good job marketing itself as a healthier alternative to products like Red Bull and Monster (MNST). Read more >> Historical data suggests October is the best time of year to buy a home. Compared to May, in which buyer’s pay 10.5% higher than market value, October buyers pay a premium of 3.3%. There are a number of reasons why this is the case including colder weather and kids being in school. But this year there is an additional x-factor to consider, which connects to Fed policy. Read more >> Netflix (NFLX) may be rethinking its strategy when it comes to releasing films in movie theaters. It seems the thinking has moved beyond just Oscar nominations. The upcoming Knives Out sequel will screen in 600 theaters nationwide around Thanksgiving. Hollywood agents say this is a chance for the streaming giant to test out something they’ve been opposed to for years. Read more >> Is it illegal to check someone else’s credit report? The Fair Credit Reporting Act (FCRA) provides legal guidelines on who can and can’t check consumer credit reports. Read more >>Not-So-Breaking News
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A judge ruled that Elon Musk must complete his purchase of Twitter (TWTR) by October 28 in order to avoid a trial. In a court filing, Musk said he wants the social media platform to drop its lawsuit and close on his purchase of the company at $54.20 per share.
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Beleaguered investment bank Credit Suisse (CS) offered to buyback $3 billion worth of its shares and confirmed it is selling its famous Savoy Hotel, located in Zurich’s financial district. This comes as the market continues to express concerns over Credit Suisse’s future: the company’s share price has plummeted in recent weeks amid increased bets against its debt.
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The cryptocurrency sector has been victimized by another major blockchain bridge hack. Binance, which is the world’s largest crypto exchange, announced Friday it was hit with a $570 million hack. Hackers have been targeting blockchain bridges, which are used to transfer cryptocurrencies between different applications. Thirteen hacks have been reported with a combined $2 billion stolen.
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United Airlines (UAL) says it wants to have electric planes flying regional routes before the end of the decade. Reports indicate Denver International Airport and Chicago O’Hare could be among the first markets to receive the electric aircraft. Electrifying its fleet will be a big part of United’s plan to reduce its carbon footprint to net zero by 2050.
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The cannabis industry received a boost last week when President Joe Biden pardoned thousands of people who had been previously convicted under marijuana laws. He also called for a review of federal marijuana laws and said governors should follow suit by enacting similar pardons.
Financial Planner Tip of the Day
"A bond is basically loaning someone—a government, company, or municipality—money. Bonds can provide a steady stream of income, which includes interest payments and initial investment. However, bonds are riskier than cash. Bond issuers can default, and the yields in the long-term aren’t as high as other investments."
Brian Walsh, CFP® at SoFi