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Stocks Fall as Investors Try To Make Sense of Retail Sector, Fed Officials Speak Out
• Stocks fell as investors studied mixed data from the retail sector. October’s retail sales rose 1.3% month-over-month, suggesting resilient consumer spending. This could factor into the Fed’s thinking about future rate hikes. Meanwhile, industrial production was lower in October, suggesting capital-intensive businesses are struggling with higher interest rates.
• Federal Reserve officials have sent mixed signals in recent days. Kansas City Fed President Esther George said the labor market is so tight, it may be unable to effectively fight inflation without causing a recession. Meanwhile, Federal Reserve Governor Christopher Waller indicated that he was open to a 50-basis-point hike at next month’s meeting, following four straight 75-basis-point hikes.
What to Be on the Lookout for Today
• The Labor Department will publish initial and continuing jobless claims. With an increasing number of major US companies announcing layoffs, investors will be looking to see how the job market has been impacted overall.
• The Philadelphia Fed manufacturing index for November is also due, as well as October’s building permits and housing starts. Amid higher mortgage rates, construction activity has fallen, as homebuilders anticipate lower profits due to falling demand.
• Alibaba (BABA) is scheduled to share its most recent earnings data. Considering it is China’s biggest ecommerce company, Alibaba’s results will provide the market with a snapshot view of commercial activity from a global perspective. BJ’s Wholesale Club (BJ) and Gap (GPS) are also scheduled to report.
6 Ways You Can Prepare For & Protect Against Inflation
In basic terms, inflation means prices are rising and your purchasing power is declining. Rates are hitting the highest numbers the US has seen since the early 1980’s, which could mean it’s the first time you’re experiencing inflation at this level. There are several ways to prepare for and protect yourself from inflation. Here are a few:
1. Buying vs. renting a home. Though the market is hot and prices are high, the benefit of a fixed monthly payment and potential increase in property value offsets the possible increased cost, if you can afford it.
2. Financing your home. The value of money, including debt, declines as the inflation rate rises. So the inflation-adjusted value of your mortgage payments goes down as inflation and your property value go up.
3. Buying Durable Products for the Long Term. If choosing between two new cars to purchase, for example, it may make more sense to spend more for the option that will require fewer future repairs.
4. Revisiting Your Budget. You may want to reevaluate your spending in categories that are or could be vulnerable to inflation, such as food, transportation, healthcare, and utilities.
5. Investing Your Money. Once you’ve established a savings account for your emergency fund and short-term expenses, you may want to look at investing as a long-term strategy for hedging against inflation.
6. Staying Informed. Knowledge is power. Keep a close eye on news and trends related to the economy. Seek guidance from industry experts and use this information to make proactive, empowered money moves. We recommend using SoFi’s free education and news resource, On the Money, to stay in the loop.
Today’s Top Stories
Are you currently carrying credit card balances? If so, you could be paying as much as .08% per day in interest. Many credit card companies have raised their APRs to over 30%, which makes using a card more expensive than ever. But don’t panic. Here are a few tips on how you can tackle this debt ASAP. Read more >> This season’s retail spending is likely to be one of the most talked about indicators in the ongoing recession debate. But can retail health really tell us much about the direction of the market? SoFi’s Head of Investment Strategy weighs in. Read more >> In this year’s second quarter, the number of people who took out a home equity line of credit jumped 40%, year-over-year. But, amid historical economic uncertainty, are HELOCs a good idea? Financial advisors warn not to treat your home like an ATM. Some borrowers see HELOC as a source of financial security, while others have specific expenses in mind. We examine the pros and cons. Read more >> Want to earn cash online without selling anything? Here’s 11 essential ideas to help you start bringing in more money. Read more >>Not-So-Breaking News
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Target’s (TGT) profit dropped by around 50% during the third quarter. The massive retailer blamed higher prices, saying that families now need to choose between products they want and products they need.
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Toyota (TM) revealed new versions of its flagship Prius model, opting to continue producing hybrid models, rather than pivoting to EVs. The legacy automaker believes hybrid cars remain a viable path to its goal of carbon neutrality by 2050.
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Lowe’s (LOW) topped analysts expectations for both sales and profit in the third quarter. CEO Marvin Ellison said that the DIY hardware store is not feeling the negative effects of inflation.
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Budget airliner JetBlue (JBLU) announced plans to schedule flights from NYC to Paris by next summer. The future owner of Spirit Airlines (SAVE) is aiming to bring down transatlantic flight prices, which are currently dominated by larger carriers.
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Walmart-owned Sam’s Club (WMT) lowered the price of its hot dog and drink deal to $1.38. This is a direct shot at Costco (COST), who offers the same combo for $1.50.
Financial Planner Tip of the Day
"Whether it’s in a wallet or bank account, cash money means something. It’s liquid, which means a person can get to it whenever they need to and the returns don’t fluctuate. That stability comes with the drawback of purchasing power. Cash investments don’t keep up with inflation."
Brian Walsh, CFP® at SoFi