Wednesday,
October 19, 2022
Market recap
Dow Jones
30,523.80
+337.98 (+1.12%)
S&P 500
3,719.98
+42.03 (+1.14%)
Nasdaq
10,772.40
+96.60 (+0.90%)
Top Story
Choppy Session Ends with Stocks in the Green, Boosted by Strong Earnings Data
• US stocks rose Tuesday in a volatile session that saw the major averages briefly give up gains as Treasury yields rose. Strong earnings from Goldman Sachs (GS) helped boost sentiment, continuing a strong start to the third-quarter earnings season for the banking sector.
• The market also received a boost from overseas, as the Bank of England confirmed it will begin selling bond holdings at the end of the month. The UK bond market has been in turmoil but the situation has improved after government officials agreed to abandon some planned tax cuts.
• The NAHB home builders' index declined in October, and has now fallen for 10 straight months. Going back one year the index is down by a half.
• Industrial production rebounded in October, exceeding expectations. This was largely due to increased manufacturing output, especially within the auto sector, as supply chain disruptions eased.
What to Be on the Lookout for Today
• Tesla (TSLA) and its controversial CEO Elon Musk will report the company’s third-quarter earnings. This will offer insight into the EV sector. The company may also discuss plans for its AI-powered humanoid robot.
• Procter & Gamble (PG), one of the world’s largest consumer-packaged goods companies, will post its most recent quarterly results. Executives will explain how inflation has impacted the firm’s bottom line.
Smart Investing Might Minimize Inflation’s Impact On Your Money
Though it carries more risk than keeping your money in a high-yield savings account, investing in stocks, mutual funds, or exchange-traded funds (ETFs) can help you grow your money for the future.
Let’s go back 30 years to get some perspective. According to Officialdata.org’s S&P 500 data calculator, if you had invested $100 in the S&P 500 at the beginning of 1992, you’d come out with about $1,974.20 at the end of 2022 (assuming you reinvested all dividends). That’s a return on investment of 1,874.20%, or 10.42% per year.
Even after adjusting for inflation, you’d be looking at a 7.87% return per year — which is better than most alternatives. Which all goes to say that investing may be a very good hedge against inflation. You can read more about how to invest during inflation on SoFi Learn.
If you’re ready to build a portfolio, a great place to start is via the SoFi Invest brokerage platform. You can use it to purchase stocks and exchange-traded funds that you either select yourself or let the platform’s algorithm choose on your behalf. Start trading!
A Few Headlines That Should Be on Your Radar
Livestream shopping events, which are immensely popular in China, could be coming to the US. Livestream shopping is projected to bring in $512 billion in revenue to Chinese companies, and US companies are eager to get in on the action. Here’s what that means for you. Read more >> A UK regulator is forcing Facebook-owner Meta to reverse its acquisition of the gif-sending app Giphy. This marks the first time that a global regulator has nixed an acquisition involving a major technology company. In the short-term, this means that you won’t be able to send Giphy gifs through Facebook, WhatsApp, or Insta anymore. But, the long-term implications for Big Tech could be much bigger. Read more >> The latest source of supply chain headaches (and inflationary pressure) is a well known American waterway. With spots along the Mississippi River at record-low water levels, shipping is being disrupted. Barges have had to reduce their capacity in order to avoid getting stuck in the sand and mud. Here’s how a drought impacting the mighty Mississippi will impact your wallet. Read more >> It didn’t take long after President Biden announced his student loan forgiveness program in August for the scammers to get up and running. Keep reading to learn how student loan forgiveness program scams try to fool you, and how you can avoid getting duped. Read more >>Not-So-Breaking News
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Daniel Loeb, the activist hedge fund manager behind Third Point, is building up a large position in the consumer goods conglomerate Colgate-Palmolive (CL). He is pushing for the company to spin off its pet food brand Hill’s Pet Nutrition in a bid to help it grow faster.
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As revenue slows, Microsoft (MSFT) confirmed it will be cutting its workforce to cut costs. This move matches up with what other major tech companies have been doing.
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Hasbro’s (HAS) profit fell short of expectations during its third quarter. The toy maker’s management claimed that high inflation and tough year-over-year comparisons are to blame for the downbeat performance.
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Goldman Sachs (GS) reported a decline in profits but still managed to beat expectations in its most recent quarter. The banking giant’s stock rose slightly on the news that it will be reorganized into three operating sections to streamline efficiency.
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Amid the Russia-Ukraine war, defense contractor Lockheed Martin (LMT) reported better-than-expected results for the third quarter. In particular, sales were up in its aeronautics unit, which makes the F-35 fighter jet. The company also upheld its 2022 revenue guidance.
Financial Planner Tip of the Day
“Your Debt-to-Income Ratio, or DTI, tells lenders how much of your monthly income is being used to pay your debts. In general, lenders prefer to see less than about 30% of an applicant’s income going toward debt payments each month. Paying off debts can improve your DTI to a more creditworthy percentage for lenders to consider when assessing your mortgage loan application.”
Brian Walsh, CFP® at SoFi