Thursday,
October 20, 2022
Market recap
Dow Jones
30,423.81
-99.99 (-0.33%)
S&P 500
3,695.16
-24.82 (-0.67%)
Nasdaq
10,680.51
-91.89 (-0.85%)
Top Story
Stocks Fall Despite Another Round of Strong Earnings Reports as Yields Rise
• US stocks fell Wednesday as surging bond yields put pressure on equities, despite another round of solid earnings reports. The benchmark US 10-year Treasury saw its yield spike to 4.12%. Because bonds are less risky than stocks, this creates competition for investment dollars.
• The United Kingdom reported a 10.1% inflation rate in September. This underscores that nation’s financial turmoil and indicates how rampant inflation is throughout the Eurozone. The UK bond market also experienced surging yields recently.
• Oil prices rose, despite President Biden saying he’s considering the authorization of more releases from the Strategic Petroleum Reserve. The White House decision was at least partially motivated by planned production cuts from OPEC+.
• The US Census Bureau said September’s single-family home starts fell to their lowest level in two years. As mortgage rates continue to rise, demand among would-be homebuyers has plummeted.
What to Be on the Lookout for Today
• The Labor Department will publish last week’s jobless claims. For the week ending on October 8, jobless claims rose to their highest level since August.
• September’s leading economic indicators are due. The Conference Board’s Leading Economic Index declined 0.3% in August. This marked the sixth consecutive month of declines, which one could argue signals the US is entering a recession. An increase for September could be a sign of relief. A decline would mean that the US is slipping further into recession territory.
• The Philadelphia Fed will release its regional manufacturing index for October. September’s report showed that activity declined.
• September's existing home sales will be released by the National Association of Realtors®. The figure slipped by 0.4% in August, as rising mortgage rates weighed on demand.
• Telecommunications giant AT&T (T) will share its third-quarter earnings. This dividend stock is typically one of the more reliable companies in the US, but its sales have dipped so far in 2022. If AT&T decides to slash its dividend payment, it could be a negative sign for the overall economy.
What Biden’s Student Loan Forgiveness Means for Current Students
Students currently enrolled in college and graduate school are eligible to apply for forgiveness of up to $20,000 of the federal student loans they’ve received if they meet certain family income requirements, according to information posted by Federal Student Aid (FSA), an office of the U.S. Department of Education (DOE).
When President Joe Biden’s plan for one-time loan cancellation was announced in August, it was clear that college graduates with federal loans were eligible, as were those who had dropped out of college but still needed to pay back their federal loans. Find out if you qualify and how to apply.
A Few Headlines That Should Be on Your Radar
Nestlé, one of the world’s biggest food companies, has a difficult task of balancing cost inflation, higher prices, and consumer demand. If it raises prices too quickly then it risks consumers switching to cheaper alternatives. Europe’s pending energy crisis is making this balancing act even more difficult. Learn what Nestlé plans to do and how it will affect the aisles in US grocery stores. Read more >> With inflation at its highest level in 40 years, the IRS is taking steps aimed at avoiding “bracket creep.” Tax brackets are being adjusted higher, and standard deductions are also going up. When employees receive cost of living increases they sometimes get bumped up into a higher tax bracket, offsetting the original intention. Here’s what you need to know about the announcement. Read more >> Advances by the S&P 500 this month may have some investors wondering if we’re out of the woods on this bear market. SoFi’s Head of Investment Strategy looks at breadth indicators for the recent market rally and gives her take on the rally’s staying power. Read more >> Scammers are actively looking to exploit President Biden’s student loan forgiveness program to access consumers’ private financial information and collect payment for unnecessary services. Keep reading to better understand how these scams work and how to avoid getting duped. Read more >>Not-So-Breaking News
-
United Airlines (UAL) stock popped after it announced that air travel isn’t slowing down just yet. CEO Scott Kirby credited hybrid work environments for the strong travel numbers.
-
Spirit Airlines’ (SAVE) shareholders gave the go-ahead to merge with JetBlu (JBLU). But the acquisition still needs to get approval from regulators, and a conclusion could still be several months away.
-
Procter & Gamble (PG) released its Q3 earnings report. Sales were down, but higher prices allowed it to beat investor expectations. The consumer products firm also indicated unfavorable foreign exchange rates will drain on profits in fiscal 2023.
-
Winnebago’s (WGO) revenue for its fiscal fourth quarter exceeded the expectations of analysts. The motorhome manufacturer said that its products are resonating with consumers, while acknowledging macroeconomic uncertainty.
-
Netflix (NFLX) put its growth back on track by adding 2.41 million new subscribers during the last quarter, which was 1.41 million higher than expected. Looking forward, the streaming giant is releasing an ad-supporter tier and also wants to crack down on password sharing.
Financial Planner Tip of the Day
“One survey found that Americans underestimate their spending on subscription services by a whopping 84%. Putting all your monthly subscriptions on one card can simplify the way you keep track of your spending.”
Brian Walsh, CFP® at SoFi