Friday,
October 21, 2022
Market recap
Dow Jones
30,333.59
-90.22 (-0.30%)
S&P 500
3,665.78
-29.38 (-0.80%)
Nasdaq
10,614.84
-65.66 (-0.61%)
Top Story
Stocks Slip as Bond Yields Remain in Focus, Existing Home Sales Hit 10-Year Low
• US stocks fell Thursday as rising bond yields continued to put pressure on stocks. It was a choppy session that included an upbeat earnings report from AT&T (T). During the early stages of this third-quarter earnings season, results have been fairly robust, keeping losses in check.
• Turmoil in the UK bond markets contributed to the resignation of outgoing PM Liz Truss. Despite rolling back planned tax cuts, Truss was unable to save her job and will step down, holding office on an interim basis.
• The National Association of Realtors® reported existing home sales hit a 10-year low in September. This is the result of rising mortgage rates, which have cratered demand among would-be homebuyers.
• Initial jobless claims fell to a three-week low. Hurricane Ian’s impact on the labor market appears to be fading.
What to Be on the Lookout for Today
• There are no major economic reports due. That said, New York Fed President John Williams is scheduled to give a speech as the market continues to look for clues concerning the central bank’s plans for the immediate future.
• American Express (AXP) will publish its most recent earnings. Given that it’s one of the last financial institutions to report this week, it will be interesting to see how AmEx’s data stacks up against Bank of America, Goldman Sachs, and others. It’s been a largely strong opening to the earnings season for the banking sector as a whole.
Debt Payoff Strategy: The Snowball Method
Once you’ve compiled your monthly budget and have a good idea of how much money you’ll have left each month after paying all your bills, the snowball method directs any excess funds to the debt with the smallest outstanding balance. Here are the basic steps:
• Disregard interest rates and start by listing your debts based on how much you owe, from the smallest balance to the largest.
• Make the minimum payment on all other debts and pay as much as you can each month to eliminate the smallest one.
• After you pay off the smallest debt, you’d turn your attention to the next-lowest balance.
• Keep going until you are debt-free. (And, of course, avoid the temptation to use the credit cards you’ve paid off.)
Pros: This approach is all about motivation. Instead of slogging away, trying to knock down your biggest debt, you’re picking off the little guys as quickly as possible. Depending on your personality, snowballing could provide the psychological boost you need to keep going.
Cons: It’s more about behavior modification than math. By focusing on the smallest account balance instead of the highest interest rate, you could be missing out on an opportunity to make a more significant dent in your debt. The sooner you get your debts paid, the sooner you can adjust your focus to saving and investing to reach other financial goals.
Ready to tackle your debt head on? A personal loan from SoFi can help you consolidate your debt into one easy-to-manage monthly payment.
A Few Headlines That Should Be on Your Radar
All eyes are on Big Tech next week as almost every single major technology company reports earnings. After months of cutting costs and enacting layoffs, investors don’t have high hopes. This could be the first time in years where the nation’s largest tech companies report declining revenue. Due to their reach and influence, this could have an outsized impact on the economy. Here’s what you need to know. Read more >> Most American workers estimate, on average, they’ll need $1.7 million saved up for retirement. But per a recent survey, less than half are on pace to meet that goal. Making contributions early is key, as is strategically adjusting the amount you invest over time. We’re looking at how to check your progress, and some of the ways to get there. Read more >> Kevin Durant joins a growing list of sports stars who are buying Major League Pickleball teams. LeBron James, Tom Brady, and Drew Brees are others on the list. Pickleball surged in popularity during the pandemic and the league is committed to expanding and building new courts around the country. For viewers, there is one major reason why pickleball could be the next big sport’s league. Read more >> If you are considering paying off a debt, it’s natural to wonder how that financial move may affect your credit score. Paying off a debt can either raise or reduce your credit score, depending on your personal circumstances and overall credit profile. Learn more about the factors involved. Read more >>Not-So-Breaking News
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Tesla (TSLA) beat analyst expectations for earnings per share, but missed on revenue. The EV maker’s report seems to have disappointed investors, as tech analyst Toni Sacconaghi of Bernstein argued Musk was dismissive and overly bold about Tesla’s future.
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American Airlines (AAL) posted a beat-and-raise earnings report. The major airline also echoed several of its competitors by predicting a strong travel season in the fourth quarter.
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IBM (IBM) announced a solid earnings report, beating analysts expectations for both earnings per share and revenue. Management also raised its full-year guidance, despite concerns the strengthening US dollar may lead to unfavorable exchange rates.
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Blackstone’s (BX) revenue and net income both fell sharply in the third quarter. But, on a positive note, the private equity firm disclosed that it now manages close to $1 trillion.
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Union Pacific (UNP) beat on revenue, but missed on earnings per share. During a call with analysts, the transportation company’s CEO Lance Fritz stated that he plans to maintain pricing discipline to capitalize on demand throughout the remainder of the year.
Financial Planner Tip of the Day
"It may be difficult to tackle your debt efficiently if you don’t actually know how much you currently owe and what the terms are. The first recommended step is to track exactly what you need to pay back. You can start with a simple spreadsheet, or try a budgeting app like SoFi Relay to help track your spending."
Brian Walsh, CFP® at SoFi