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Stocks Choppy Following Release of FOMC Minutes, Market Awaiting Inflation Data
• US stocks fell Wednesday after a choppy session followed the release of last month’s FOMC minutes. While some investors reacted positively to a note in the minutes, the central bank also indicated a willingness to remain hawkish in their fight against inflation.
• The Producer Price Index for September came in higher than expected. This is a key measure of wholesale prices and shows the impact inflation continues to have on the economy. Today’s inflation report will shed additional light on that impact.
• Overseas, the Bank of England reiterated it will put an end to its efforts aimed at stabilizing the UK bond market, beginning Friday. Still, yields continued to rise, putting pressure on stocks, which are riskier by comparison.
What to Be on the Lookout for Today
• Wall Street will be paying close attention to the latest inflation data with both the CPI and core CPI due. Economists and investors will get a sense of where things stand regarding price growth as we head into the final quarter of the year.
• Initial jobless claims and continuing jobless claims will be published by the Labor Department. After hitting a five-month low two weeks ago, the number of people filing for unemployment benefits for the first time rose by a larger-than-expected amount last week. This could indicate the labor market is starting to soften as the Fed raises rates.
• Taiwan Semiconductor Manufacturing Co (TSM) will announce its third-quarter earnings. Although there has been some volatility in the space, Morgan Stanley (MS) is projecting a return to growth for the semiconductor industry by the latter half of next year. This prompted Morgan Stanley to name TSMC Asia’s most valuable listed corporation, calling it “an enabler of future technology.”
• Delta Air Lines (DAL) also reports its latest results. The pandemic has upended travel, causing ticket prices to fall originally, and then pick up this past summer. Many airlines have experienced staffing issues, including the challenge of finding pilots.
Earnings Season is Here: What Does That Mean?
‘Tis the season — earnings season, that is. Earnings season marks the period during which most publicly-traded companies release their quarterly earnings reports. These statements lay out important financial information including company revenue, expenses, and profits. It is an important time for investors, as it provides valuable insights into the performance and outlook of specific companies, the stock market, and the economy as a whole. It presents an opportunity to track a company’s or industry’s performance and better understand its overall financial health.
Earnings season takes place multiple times a year. Knowing when earnings season is can help investors stay up to date in order to make more informed investment decisions.
A Few Headlines That Should Be on Your Radar
Delta (DAL) and Stabucks (SBUX) are combining loyalty programs to bring more value to consumers. Like the sound of free coffee and airline miles? If so, you may want to hear what this new rewards program has to offer. Read more >> Foot traffic at discount grocery stores like Aldi and Grocery Outlet (GO) has surged as some price-conscious consumers have changed their buying habits. Record inflation and rising grocery prices are likely factors. Shopping at discount grocers is one way to reduce your grocery bill. But, while you’re there, choosing the right products can help you double down on those savings. Read more >> Semiconductors touch nearly every sector of the economy in some way, and have come to be regarded as an indicator of stock market direction and the health of business conditions. SoFi’s Head of Investment Strategy explains the recent volatility of semiconductor stocks, what this year’s price action in semis suggests, and what could be in store in the weeks to come. Read more >> A growing list of businesses accept cryptocurrencies like Dogecoin as a form of payment, especially as crypto itself becomes more widespread and commonplace. Twitch, Newegg, and Gamestop are among the businesses that can accept Dogecoin as payment. Learn more about which companies take DOGE. Read more >>Not-So-Breaking News
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United Airlines (UAL) is adding new trans-Atlantic flights, such as San Francisco to Rome and Newark to Dubai. These will launch next summer. United also noted European travel was up 20% this past summer, compared to 2019 levels.
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Lucid (LCID) says its on track to reach its 2022 production targets. The luxury EV maker upheld its guidance for between 6,000 and 7,000 vehicles to be manufactured by the end of the year. Lucid cut its target twice previously, blaming logistics and supply chain issues.
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Snack food and beverage giant PepsiCo (PEP) raised its forecast for the year with executives saying increased pricing helped boost revenue. Quarterly revenue rose 9% from the same period a year ago even though sales volume declined in some units, particularly Frito-Lay North America.
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Blackstone (BX) and Resolution Life plan to jointly raise $3 billion of new equity capital. Blackstone will invest $500 million as part of the deal. The two firms are looking to advance their global life insurance and annuity consolidation business.
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Pharmaceutical giants Merck (MRK) and Moderna (MRNA) announced they plan to jointly develop a personalized cancer vaccine that will eventually be commercialized. An investigational version is currently being tested in a Phase 2 clinical trial. The treatment aims to assist patients who are considered high-risk for melanoma.
Financial Planner Tip of the Day
“Buying crypto isn’t a taxable event, but selling crypto and purchasing goods and services with crypto is. For federal tax purposes, virtual currency (crypto) is treated as property, with the same tax rules as other property transactions like stocks.”
Brian Walsh, CFP® at SoFi