Monday,
October 24, 2022
Market recap
Dow Jones
31,083.02
+749.43 (+2.47%)
S&P 500
3,753.15
+87.37 (+2.38%)
Nasdaq
10,859.72
+244.87 (+2.31%)
Top Story
Stocks Stay Choppy, but Yields Fall, Boosting Equities – Fed’s Williams Discusses Hiring Difficulty
• US stocks rose Friday as investors studied more corporate earnings reports and considered future rate hikes from the Fed. US Government bond rates have been spiking recently, putting pressure on stocks, but Treasury yields fell from their highs to close out the week, following a report that suggested some Fed officials are worried about over tightening while attempting to fight inflation.
• The UK bond market remains in turmoil following the resignation of PM Liz Truss. It’s unclear who will replace her as prime minister, and the market dislikes uncertainty. Yields rose and the British pound slipped.
• It was a quiet end to the week in terms of economic data, although New York Fed President John Williams delivered comments. He said companies are continuing to face difficulty filling jobs, especially when hiring ​​entry-level workers in construction, nursing, and manufacturing.He said companies are continuing to face difficulty filling jobs, especially when hiring ​​entry-level workers in construction, nursing, and manufacturing.
What to Be on the Lookout for Today
• The Chicago Fed releases its National Activity Index – or CFNAI – for September, a gauge of economic activity and inflationary pressure. In August, this metric showed that economic growth slowed compared to July’s growth.
• The S&P US Manufacturing PMI – or Purchasing Managers’ Index – is also due. In September, the index came in at 52%. In general, a PMI reading of over 50% indicates growth in the manufacturing sector.
Debt Payoff Strategy: The Avalanche Method
The avalanche method puts any excess money in your budget toward the debt with the highest interest rate. Here’s how it works:
• Disregard minimum payment amounts and balances, and instead list debts in order by interest rate.
• Make the minimum payment on all debts and pay as much as you can each month to get rid of the bill with the highest interest rate. (So, for example, if you have three credit cards with interest rates of 21%, 18%, and 22%, and a student loan with 6% interest, you’d pay as much extra as you could toward the card with the 22% rate first and keep at it until the balance is zero.)
• When the first balance is paid off, you’d move on to the debt with the next-highest interest rate. (The 21% card, in this example, then the 18% card, then the lower-interest student loan.)
Pros: Since this method focuses on the most expensive debt first, it helps bring down the amount of interest paid while working toward debt repayment. If you need a reminder of how impactful interest can be, check your credit card bill: The minimum payment warning explains just how long it will take you to get rid of that debt if you pay only what you have to every month.
Cons: This method could take more commitment and discipline. If you’re the type who needs to experience little “wins” along the way, you might lose interest before you wrap up this plan.
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
With a jam-packed week of reports ahead of us, earnings season is officially in full swing. Most major technology and Dow Jones companies will report this week. Investors are very eager to hear from the FAANG companies, which could report their first negative quarters in years. Additionally, Spirit Airlines (SAVE), Boeing (BA), and Ford (F) will let us know which direction American transportation is headed in. Read more >> Medicare’s open enrollment period is now underway and lasts through December 7. There are changes on the way that beneficiaries should be aware of. It’s important to look into whether you are utilizing the most cost-effective plan in order to free up cash for other expenses. We’ve got a comprehensive breakdown of the relevant information. Read more >> Interest rates are currently hovering around 7%, the highest that they’ve been in decades. Thanks to this, existing home sales have fallen for eight straight months. To keep business going, realtors are coming up with creative incentives to lure buyers. This includes adjustable rates, pilates classes, or even free beer for a year. Read more >> Paying down debt directly impacts your credit score, but it may not provide the immediate results you might expect. Numerous factors are used to determine a credit score, and whether it will increase when debt is paid down is more complex than a simple yes or no. Read more >>Not-So-Breaking News
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Snap Inc (SNAP) posted a surprise profit during its third-quarter earnings report, but also fell short of revenue expectations. Executives said Apple’s (AAPL) new privacy policy is hurting the photo-sending app’s core advertising business.
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Apple’s latest iPhone update will include access to Apple Fitness+ without an Apple watch, clean energy charging, and iCloud shared photo libraries. Anyone with an iPhone 8 or newer model can download this update.
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Instacart has announced that it most likely won’t be going public in 2022. Hiring freezes, layoffs, and the cooling tech IPO market are likely to blame.
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On its latest earnings call, American Express (AXP) raised its guidance through the end of the year. CEO Stephen Squeri said they haven’t noticed any changes in consumer spending but are still prepared for a recession.
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In the third quarter, Verizon’s (VZ) profit fell 23% and it reportedly lost 189,000 subscribers. Analysts think that Verizon’s high prices are encouraging customers to leave for cheaper providers.
Financial Planner Tip of the Day
"Anyone who wants to flex good financial habits may find it worthwhile to come up with a debt repayment plan. In an ideal world, this might mean paying off credit card balances in full and making all other necessary debt payments on time, such as mortgage installments and student loan payments."
Brian Walsh, CFP® at SoFi