Tuesday,
October 11, 2022
Market recap
Dow Jones
29,202.88
-93.91 (-0.32%)
S&P 500
3,612.39
-27.27 (-0.75%)
Nasdaq
10,542.10
-110.30 (-1.04%)
Top Story
Stocks Dip as Chip Stocks Drag on Nasdaq, Focus Stays on Rates and Recessionary Concerns
• US stocks fell Monday as the market looked to put last week’s volatility in the rearview. Semiconductor stocks slipped, dragging the tech-heavy Nasdaq lower. There was also a wait-and-see mindset along Wall Street with fresh earnings and new inflation data due this week.
• Fed Vice Chair Lael Brainard said rates will need to rise over time in order to slow the economy and combat inflation. Meanwhile, JP Morgan Chase (JPM) CEO Jamie Dimon warned the US will enter into a protracted recession in 2023.
• Overseas, the Bank of England took additional action in an attempt to stem the rise of bond yields. The efforts had little effect and the yield on the 30-year gilt climbed to around 4.7%. Due to yesterday’s holiday, the US bond market was closed.
• Oil prices fell as the US dollar strengthened. Due to its widespread use in international trade, a strong US dollar can cause disruptions.
What to Be on the Lookout for Today
• The NFIB Small-Business Index is due for September. The monthly gauge helps track the sentiment of small business owners across the country. Sentiment actually improved in August as inflation concerns cooled somewhat. With that said, price increases and labor shortages are still weighing on the minds of many small business owners.
• The New York Fed will release its 5-year inflation expectations for September. In August five-year ahead expectations for inflation fell to 2.0% from 2.3% in the prior month.
Earnings Calls: Definition, Importance, and How to Listen
Earnings season, in which publicly traded companies share financial information from the most recent quarter, kicks off this week.
Earnings calls provide investors with valuable insights into a company’s financial performance and outlook. These calls, paired with quarterly earnings reports, give investors a thorough understanding of the company, which helps with making investment decisions. Here are some things to look out for when you join an earnings call — and ways to use that information.
A Few Headlines That Should Be on Your Radar
Preliminary data shows that starting holiday discounts earlier is not increasing sales volume. For consumers there is already some potential “discount fatigue” setting in. Consumers have had a tougher-than-normal year financially. Retailers have responded by offering bigger discounts than ever. But, it’s not having the desired effect. Read more >> Thanks to small price increases for flowers, dinner, and ridesharing, the cost of dating is putting Millennials and Gen Z in debt. This doesn’t mean that you need to stop dating, just that you should be more conscious of your spending in the process. Here’s a “dating advice column” that looks at the dollars. Read more >> Sales figures show hybrid vehicles are popular and getting snatched off lots – what does this say for the future of the EV sector? Some automakers are betting on hybrids and continuing to release new models, even while the entire industry as a whole pushes toward complete electrification. But there’s a familiar problem at present – and it's holding back hybrids. Read more >> A 401(k) can be a valuable part of a retirement savings plan. But how much should you have saved in your 401(k) at different ages or career stages? Charting the average 401(k) balance by age can help put your own savings in perspective. Keep reading to learn about these possible benchmarks and smart ways to handle common savings challenges people may face at different phases of life. Read more >>Not-So-Breaking News
-
According to the International Data Corporation, personal computer shipments fell 15% on an annual basis during the third quarter. The only manufacturer to see shipments rise was Apple (AAPL), which recorded a year-over-year increase of 40%. HP (HPQ) logged the largest decline at 28%.
-
US companies must apply for a license before selling advanced computer chips or related manufacturing equipment to China, per new rules from the US Department of Commerce. This includes foreign companies who use American tools when producing high-end chips. The Chinese Ministry of Foreign Affairs blasted the move calling it an abuse of export control measures.
-
EV maker Rivian (RIVN) announced the recall of over 12,000 vehicles due to a potential steering defect. The company says a fastener that may not have been properly tightened at factories is to blame. In rare instances the fastener could detach completely leading to loss of steering control.
-
Paint company PPG (PPG) blamed softer demand in China and Europe while issuing downbeat guidance for its third-quarter earnings. PPG predicts demand will remain soft into the fourth quarter, noting the unfavorable exchange rate is also hurting profits.
-
Aramark (ARMK) is aiming to have menu options on college campuses be 44% plant-based food by 2025. This applies to residential dining menus at 250 colleges and universities. Presently menus are between 26% and 30% plant-based. Aramark notes the move is part of its agreement with the US Humane Society to reduce greenhouse gas emissions.
Financial Planner Tip of the Day
"Rebalancing an investment portfolio can help investors stay on track to meet their long-term goals. By ensuring that there is a steady mix—or diversification—of assets in their portfolio, they can stay on top of their investments in a way that works with their risk tolerance and their financial needs."
Brian Walsh, CFP® at SoFi