Friday,
October 14, 2022
Market recap
Dow Jones
30,038.72
+827.87 (+2.83%)
S&P 500
3,669.91
+92.88 (+2.60%)
Nasdaq
10,649.15
+232.05 (+2.23%)
Top Story
Stocks Rally After Initially Being Down Following Hotter-Than-Expected Inflation Report
• US stocks rose Thursday after initially being in the negative for most of the morning. Around an hour shy of noon, investors seemed to decide the selling had gone too far, sparking a rally that finished with all three major averages in the green.
• Stocks had originally started selling off in response to September’s CPI, which came in higher than what analysts had predicted. Month-over-month prices rose 0.4%, while on an annual basis they rose 8.2%. In August, year-over-year inflation checked in at 8.3%.
• Jobless claims hit their highest level since August, potentially impacted by Hurricane Ian. Still, many economists argue the labor market remains tight.
What to Be on the Lookout for Today
• September retail sales are due. Since consumption is such a major factor to overall GDP, this is a figure that many investors watch very carefully. September sits right between the back-to-school shopping period and fall holiday months, so it will be interesting to see how retail sales held up after summer's end.
• The University of Michigan's 5-year inflation expectations report for October is also due. The US Census Bureau will also publish August’s business inventories as well.
• The third quarter earnings season kicks into high gear with a handful of reports from big banks. This includes JPMorgan Chase & Co (JPM), Wells Fargo & Co (WFC), Morgan Stanley, and Citigroup (C). Investors will be curious to hear how rising rates are impacting the entire sector. Traditionally, when rates rise, this increases what's called the Net Interest Margin for banks, or how much they can make from the spread between rates on the savings and lending products.
• Slightly smaller players including PNC Financial Services Group (PNC), US Bancorp (USB), and First Republic Bank (FRC) are also scheduled to report. All of these banks, spanning various sizes, will also share their outlook for the economy as a whole.
Quick FAFSA Tips and Mistakes To Avoid
If you’re applying to college or graduate school, figuring out how to pay for your education should be top of mind. The first step for many prospective students is to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA®.
This form is your gateway not only for federal loans, but also for federal grants, work-study funds, and even scholarships and grants available through your state or school. Filling out the FAFSA is key, since it’s how your eligibility for student aid is determined.
You might be tempted to put off filling out the application or have no idea where to start, but submitting your application as close to October 1 as possible could improve your chances of earning more aid. Check out these FAFSA tips and tricks to help make sure everything goes smoothly.
A Few Headlines That Should Be on Your Radar
ByteDance, TikTok’s parent company, announces plans to expand its music streaming business called Resso globally. Resso is already live in India, Brazil, and Indonesia. Resso’s first wave of expansion won’t include the US. But, there are still a few reasons why major streaming companies should be nervous about this news. Read more >> At the start of every earnings season there are various narratives that develop concerning different companies and entire sectors. So during a bear market, what do you watch for when banks report? There are two competing factors to consider: rising rates and demand for loans. We have a detailed breakdown explaining how you can confidently study earnings reports from major banks. Read more >> Puttshack, a high-tech mini golf course from the creators of Topgolf, raises $150 million from BlackRock (BLK). BlackRock becomes the second investor, along with Promethean Investments, who invested $60 million in a seed round. Puttshack is currently only available in Atlanta and Chicago. But, it plans to open in Miami, Boston, and St. Louis by the end of the year, as well as these 8 cities in 2023. Read more >> According to the Department of Education, an online form will be made available in October on the Federal Student Aid website for people who meet the income requirements to apply for up to $20,000 in federal student loan forgiveness. Find out how to apply and learn the requirements and the deadlines you need to know. Read more >>Not-So-Breaking News
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Walgreens (WBA) beat analyst expectations on the top and bottom lines in its fiscal fourth quarter. As the drugstore retailer looks to transform into a more healthcare focused company, executives noted current macroeconomic conditions are challenging, but not devastating for Walgreens, given it’s not overly reliant on the sale of big ticket items.
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Delta Air Lines (DAL) reported record revenue and profit of $695 million for the company’s third quarter. Executives say this is the result of a surge in summer travel, all while fares were elevated. Delta went on to forecast a profitable fourth quarter, stating it’s focused on restoring capacity to pre-pandemic levels by next summer.
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Electric heavy truck maker Nikola (NKLA) says it can proceed with its acquisition of Romeo Power (RMO). The deal had been contingent on a tender offer to Romeo shareholders. Nikola acquired the California-based battery-pack maker for $144 million in stock.
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After coming under additional pressure this month, bitcoin (BTC) saw its price rise above $19,000. This is considered a key threshold among industry observers. The Fed’s rate hike campaign puts assets like crypto under pressure given the market’s diminished appetite for risk, so yesterday’s CPI report could factor into pricing for bitcoin and ether (ETH).
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The Social Security Administration announced beneficiaries will receive an 8.7% increase to their benefits next year, in response to soaring inflation. This cost of living increase, also known as COLA, is the highest bump in 40 years. Retirees will receive an additional $146 per month, on average.
Financial Planner Tip of the Day
“If you have savings that is not currently earmarked for a specific financial goal, take some time to think about what goal you’d like to apply it to. A great first saving goal is to have three to six months of living expenses in an emergency fund. After that, it might be good to turn your attention toward retirement savings and investing.”
Brian Walsh, CFP® at SoFi